Argyle Pink Diamonds - a News Compilation from Mercantile Diamond Group
(EMAILWIRE.COM, May 28, 2013 ) Ontario, Canada -- Rarity is one of the most powerful factors in the gemstone market. It has always played its part, of course, dictating the balance of supply and demand and therefore price, but in the case of Argyle pink diamonds, rarity takes on a new dimension.
The Argyle mine, in Western Australia, owned by Rio Tinto, has less than 10 years production left in it. Dwindling supplies are swelling demand from collectors and investors, especially in the Middle East and China, where the combination of the stones natural beauty and glittering investment potential is proving irresistible.
Philip Baldwin, of the Sciens Colored Diamond Fund, says demand is phenomenal. Its all about collectables. Buyers today are more educated, developing the taste and discernment needed to appreciate colored demands.
Argyle stones are not big or gaudy the biggest are about two carats but their specific color, very different from pink diamonds from say Brazil or Africa, is both desirable and immediately recognizable.
The Argyle mine was discovered in the late 1970s, in rugged terrain 3,000 kilometers from Perth, and came on stream in 1984.
The mine yielded colored diamonds of an extraordinary purplish pink never seen before, in a palette ranging from delicate cherry blossom to bubblegum, orange brown diamonds from burnt orange to cognac, veering into the occasional blue, and the rarest of the rare, the red diamond.
The new Argyle diamonds captured the 1980s mood of glitz and glam, spearheading the colored diamond craze, leading to todays near-obsessive quest for this ultimate natural rarity.
There is no sign of another mine in the world that consistently produces rare pinks in the same way as Argyle, and the near-exhaustion of the mine can only strengthen demand and prices.
Even now, pinks represent less than 1/10th of 1% of the mines production, and pink diamonds comprise just 3/10ths of 1% of global diamond production.
The Argyle mine has been the largest single source of the worlds supply of pink diamonds, creating a desire and a market that is separate from that for white diamonds, less commoditized, with no price list, since value depends on subtle nuances of color, balanced with other variables such as clarity and cut.
High-quality pink diamonds can reach 20 or even 50 times the price of a white diamond equivalent, and per carat prices at auction have increased exponentially, in the past 10 years, defying economic crises, peaking in 2009, when the average sale price reached just under $2m per carat, and is now regaining momentum.
Mr. Baldwin talks of a red phenomenon, the elitist race for the staggeringly rare red diamonds, but emphasizes that, while the red or pink diamond is viewed, for example, by Chinese buyers as an investment, it is first and foremost an object of great beauty.
Josephine Johnson, manager of Argyle Pink Diamonds, part of Rio Tinto, says: Many hard-nosed investors are surprised by the emotional connection they make with these remarkable gems, once they see them up close and fully appreciate their complex depth of color and their ancient mystique.
CHINESE, INDIANS BUY PINK DIAMONDS, RIO SAYS
Quoted from (By Michelle Yun http://www.bloomberg.com)
Customers from emerging markets are buying more pink diamonds from Rio Tinto Group, the worlds third-largest producer of rough diamonds, as the colored gems begin to be appreciated for their rarity.
Five years ago, we may have had one or two diamonds go to China and India, but now well have more than 20 percent of the diamonds going to the developing markets, said Josephine Johnson, business manager at Rio Tintos Argyle Pink Diamonds, at a private sale of 75 colored diamonds in Hong Kong. China is particularly interesting because of the rapid growth in the appreciation and understanding of pink diamonds.
The U.S. accounted for about 38 percent of the global diamond market in 2011, while China had an 11 percent share followed by Japan and India with 10 percent each, according to De Beers (AAL), the worlds biggest producer of the gems. China may overtake the U.S. as the biggest consumer of diamonds by 2015, according to Antwerp World Diamond Center.
Over the next 10 years, with plateauing stock and increasing demand, you can only be bullish on diamonds, said Dylan Dix, a Vancouver-based executive at HRA Group and a customer at the diamond sale in Hong Kong.
Rio Tinto, the worlds second-biggest mining company, is planning to cut jobs at the Argyle mine to reduce costs and improve efficiency, the company said earlier this month. The miner said in March its considering selling its diamond mines because they no longer fit its strategy.
This report is based on information available to the public. The information and any statistical data contained herein has been obtained from sources we believe reliable, but we do not represent that they are accurate or complete and should not be relied upon as such. The material contained herein is for information purposes only.
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Mercantile Diamond Group is the publisher of The Mercantile Diamond Analyst -- a quarterly report written by some of the best technical people involved in the science of Natural Colored Diamonds. It includes major auction and private sale results worldwide, as well as topics of interest to anyone contemplating an investment in Colored Diamonds.
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