‘The new Faberge egg’: Pink diamond prices set to soar as Australian mine producing 95% of the world’s supply prepares to close forever

This article originally appeared on the Daily Mail and can be accessed here.

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The price of pink diamonds is expected to soar after the Argyle Diamond Mine which produced nearly the entire world supply closes this week.

The world’s largest pink diamond mine began when a group of geologists stumbled across a stone in the Kimberley region of Western Australia in the 1970s.

Since owner Rio Tinto began production in 1983 the mine has produced 95 per cent of the world supply of the rare diamonds.

Twinkling from rose through magenta to purple, the stones have commanded some of the diamond market’s highest prices.

Some diamond colours are caused by trace elements such as nitrogen (yellow) or boron (blue), but pink diamonds have not been found to have trace elements.

Instead, scientists believe the pink hue comes from a distortion in the crystal lattice caused by intense heat and pressure.

The pink stones have accounted for less than 0.01 per cent of Argyle’s total output, with the mine producing more than 865 million carats of rough diamonds over its life.

In 2019, Argyle employed 373 people and produced 12.9 million carats of gems.

Most of the diamonds mined at Argyle are browns of which only 5 per cent are gem quality, however it has consistently produced high-quality pink diamonds making it a unique deposit.

But Rio Tinto has decided to close the mine as the supply of pinks is running out and the it is now too deep to excavate beneath and extract them.

‘The drilling costs are growing, and profits deriving from the diamonds produced are not enough to cover operation costs,’ subsidiary retailer Argyle Diamond Investments said on its website.

The company only had enough reserves to mine to the end of the year.

When Argyle closes it will take 75 per cent of Rio TInto’s diamond output down, but the impact on the mining giant’s earnings will be less than 2 per cent as diamonds are a small part of their overall business.

Rio Tinto estimates it will take five years to decommission the mine and to start rehabilitation works, followed by rehabilitation and monitoring.

Kimberley Fine Diamonds proprietor Frauke Bolten-Boshammer, based Kununurra, 200km north of the mine told Bloomberg in July that pink diamond prices had quadrupled in the last 10 years already.

Jewellery historian Vivienne Becker told news.com.au that Argyle pink diamonds would ’emerge as the new Faberge egg, the thing jewellery myths are made of’ in the next decade.

Rio Tinto managing director for operations, copper and diamonds, Sinead Kaufman told the ABC that over the past 20 years, Argyle pinks had risen in value five-fold.

‘Demand for Argyle pink diamonds has continued unabated,’ she said.

‘Rarity, uniqueness and a finite supply has driven the strong value appreciation we have seen, and continue to see.’

The last Argyle pink diamonds are being sold to specialists round the world this month in a trade sale known as a ‘rough tender’, Rio Tinto said on its website.

The ‘Specials’ tender will sell off diamonds larger than 10.8 carats.

A total of 28,399 carats of rough stones will be shown before November 9, both online and in the global diamond hubs of Antwerp, Belgium, and Tel Aviv, Israel.

It will include Argyle’s famous coloureds together with an enormous 26-carat white diamond plus a 74.5 carat fancy yellow named ‘Diavik Helios’ from Rio Tinto’s Diavik mine in Canada.

A separate sale tender is offering pink, violet and blue diamonds to collectors and jewellers including Argyle Eternity, a 2.24 carat vivid purplish/pink diamond.