The Impact of the Argyle Mine on the Diamond Investment Spectrum

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Every industry on the planet has its “all-stars” i.e. companies that have made incredible names for themselves, whether in a justifying manner, or not. In the world of diamonds, particularly that of Colored Diamonds, Rio Tinto’s Argyle Mine and its products is one of these fine examples. Located in the distance, in the east Kimberley region in the remote north of Western Australia, the Argyle Mine claims to produce over 90% of the world’s Pink diamonds, though it is only responsible for approximately 20% of the world’s overall rough diamond production.

 

The 17 Argyle Pink Diamond Tender Diamonds Leibish & Co. Won in the 2012 Tender

Image courtesy of: Leibish & Co.

 

As the sole producer of some of the finest natural colored diamonds in the world, how is it that the Argyle mine developed such a reputable name within the trade. What is Argyle’s secret and what is this mine’s impact on the global diamond industry in general, and on the Colored Diamond industry specifically? Here is a close look at the inner-workings of the Argyle Mine, their implications, and speculations regarding its future and that of its products.

Some Fantastic Examples of Argyle Pink Diamonds
Image courtesy of: Leibish & Co.

The Value of Argyle Diamonds

Although there are a number of major diamond mining companies, among the largest is Rio Tinto. The Argyle diamond mine, Rio Tinto’s most famous, is recognized for their production of some of the most valuable, and collectable stones that have proven the ability to retain long-term value. This not only makes them ultra-luxurious jewels, but also ideal for collecting and investing. Although the famous Pink diamonds from this mine are said to represent over 90% of the world’s collection, just to put it into perspective a whole year’s worth of production of stones over half a carat would fit in the palm of your hand.

Pink Diamond Price Performance

Nobody is trying to predict the future. However, we all possess the ability to analyze the information presently available. Over time, the prices of pink diamonds have consistently appreciated and there is an obvious presence of high market demand.

 

However, since we don’t expect you to take our word for it, we put together a number of publically available auction results comparing natural pink diamond prices paid over the last fifteen years. Also, in order to keep it relevant, we made sure to select natural pink diamonds that have similar attributes between one and another.

 

Year

Carat

Color

Shape

Total

Price Per Carat

JUL 2003 3.58ct Fancy Intense Pink Pear $412,322 115,000 p/c
DEC 2007 3.86ct Fancy Intense Pink Oval $1.5 million 388,000 p/c
NOV 2010 4.59ct Fancy Intense Pink Pear $2.8 million 613,000 p/c

 

These three diamonds demonstrate a 433% price appreciation for Fancy Intense Pink diamonds between 3.50-carats and 4.50-carats between 2003 and 2010.

 

Year

Carat

Color

Shape

Total

Price Per Carat

2000 7.34ct Fancy Intense Pink Oval $1.5 Million $204,000 p/c
2012 6.54ct Fancy Intense Pink Oval $8.5 Million $1,314,143 p/c

 

The two diamonds listed above demonstrate a 544% increase in the prices for Fancy Intense Pink Oval-shaped diamonds between 6.50-carats and 7.50-carats between 2000 and 2012.

 

Year

Carat

Color

Shape

Total

Price Per Carat

SEP 2000 1.60ct Fancy Vivid Pink Round $314,000 $196,250 p/c
FEB 2013 0.51ct Fancy Vivid Purplish Pink Round $338,500 $663,725 p/c

 

Although the 0.51ct round was more than three times smaller than the other, we still see an outstanding 238% increase in the prices. Especially with such a rare shape for colored diamonds, this was a very impressive price appreciation!

 

Year

Carat

Color

Shape

Total

Price Per Carat

JUN 2005 3.10ct Fancy Vivid Pink Oval $1.8 Million $592,000 p/c
APR 2012 3.28ct Fancy Vivid Pink Pear $3.2 Million $993,000 p/c

 

The two diamonds above demonstrate a 67% increase in the prices for Fancy Vivid Pink diamonds between 3.00-carats and 3.50-carats between 2005 and 2012.

 

Year

Carat

Color

Shape

Total

Price Per Carat

AUG 2006 10.04ct Fancy Vivid Pink Pear $6.2 Million $617,500 p/c
APR 2012 9.00ct Fancy Vivid Purplish Pink Cushion $15.7 Million $1.75 Million p/c

 

The two diamonds above demonstrate a 183% increase for Fancy Vivid Pink diamonds between 9.00-carats and 10.50-carats between 2006 and 2012.

 

Today, the diamonds sold in the world’s largest auction houses, Sotheby’s and Christie’s, basically define what people are willing to pay for these magnificent stones. The five tables above clearly demonstrate the trend of natural pink diamonds in today’s market.

 

As a result of the rarity of natural pink diamonds, there is good reason why these stones do so well auction. It is no surprise that 30% of the 16 price records broken at auction over the past few years belong to Pink Diamonds. Furthermore, it is quite understandable why the two most expensive diamonds ever sold at auction were pink as well.

Product Branding

Perhaps the most logical explanation to the success and powerful name of the Argyle Mine is the vivacious colors of the stones they find. None the less, the uncanny product branding and marketing techniques that this company uses can’t hurt either. By branding their Pink diamonds as rare, quality, and valuable diamonds, Argyle has made themselves a name as “the source” for the most concentrated form of wealth on the planet. This is the case despite the fact that there are many other quality sources for Pink diamond, sometimes that hold diamonds of equal quality. The Argyle Mine has its own certificate, grading system, and laser inscription that can be found along the girdle of their diamonds. This helps enforce their brand, and promote a significant amount of brand awareness.

What the Future Holds

People in general are constantly in pursuit of what the future holds for them. This is of a whole new meaning when it comes to substantial investments such as those in Colored Diamonds. For some time now it has been rumored that the Argyle Mine only has minimal years left for production. Many took this to mean that the prices would continue to soar, even more than ever before since the supply was dwindling. Now that the new underground project of $2.2 billion has begun, individuals are wondering if the prices of Colored Diamonds will drop as a result. Though this may seem like a logical conclusion, it is one without proper backing. The Argyle Mine itself is doubtful regarding its potential finds. Rio Tinto is still selling the mine, and the extension only added on three years of production until the diamond mine eventually comes to an end. The demand for Colored Diamonds is extremely high, and the supply is rather quickly dwindling away. At the moment, there are no other diamond mines that produce stones that possess the same quality that Argyle diamonds do, and if one was found it would take almost ten years until they are operational.

Argyle Diamonds of the Finest Bubble Gum Pink Color

Image courtesy of: Leibish & Co.

 

Investors and diamond buyers alike should continue as they have in the past with the knowledge that diamond prices are on the constant rise and these wondrous stones continue to see phenomenal appreciation. There is no question that the Argyle name has become a branch of its own in the diamond industry.

 

It is true that many near flawless and beautiful diamonds originate from the Argyle Mine, but that alone is not what has made this mine what it is today. Just like Gucci, Versace, Dolce & Gabbana, and other top fashion houses have come to rule in the fashion world, so Argyle has become an esteem player in the exhilarating diamond universe.

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About Leibish & Co.: With over 32 years in the industry, Leibish & Co., is among the world’s leading online sources for Natural Fancy Colored Diamonds, dealing in a wide range of sizes and colors. Their main line inventory is Argyle Pink diamonds and fine Canary Yellow diamonds in all sizes. They also manufacture fine, multicolor diamond jewelry, designing and producing unique, collection pieces.

 

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