The most important mine for pink diamonds is closing its gates. In remote Western Australia, the Argyle mine is home to 90% of pink diamonds in the world. Also, it produces some of the rarest pink and red diamond gems. However, the Argyle mine is in big trouble. The mine is set to close at the end of the year. This announcement can be a threat to the main supply of economically viable pink and red diamonds.
The demand for pink diamonds is not decreasing
However, with the closing only a month away, the demand for pink diamonds only seems to grow. The mine produced diamonds for both ends of the price spectrum. Ever since the opening of the Argyle mine, it has produced more than 865 million carats of rough diamonds. Now, it's down to 150 carats of the last natural pink-colored diamonds.
Brown diamonds have more than three-quarters of the produced volume of the Argyle mine. They have a lower value, making the mine one of the biggest contributors to the global oversupply of “cheap” diamonds. It caused the erosion of profits for all parties involved. Other diamond suppliers have already reacted by cutting down on production volume. It helped them counteract the oversupply and stagnant consumer purchasing of diamonds.
However, the closing of the Argyle mine can kickstart diamond prices that have decreased since 2011. For real pink diamonds, the mine closure can have dramatic consequences.
Pink diamonds are among the rarest gems in the world
The prices of the pink diamond gems have risen by 300% in the last decade. It's because of the short supply of a limited number of mines producing them. Pink diamonds are more in demand because auction houses boost these rare stones.
Normal diamonds are formed from carbon that is heated and heavily compressed. In it's turn, a natural pink diamond has been exposed to even more intense heat, pressure, and time to transform crystals into grains. Then, they are compressed tightly to make only pink light capable of penetrating and shining through the diamond. This whole process is sporadic, and the suppliers are limited.
The Argyle mine was the only pink diamond mine with a constant supply. With no equitable source of natural pink diamonds, the diamond market will face a shortage. Recent reports show the prices for the Argyle-produced pink diamonds have risen an estimated staggering 500% since 2000. Experts and industry insiders now say that the pink diamond price will increase to a whopping $1M to $3M a carat. The increase in price is also the result of a coordinated effort of the Argyle mine to promote itself as the prime producer of pink diamonds, giving each gem a certificate of authenticity.
Therefore, the pink diamonds originating from this mine are valued higher than those of similar quality from smaller mines in Russia or South Africa.
Closing of the Argyle mine brings renewed attention to pink diamonds
The closing of the Argyle mine brings attention to the pink diamonds in the upcoming auctions, with buyers trying to snap up the limited supply. Early in 2002, Ben Affleck proposed to Jennifer Lopez with a 6.10 carat fancy intense pink diamond ring, setting off a trend in colored diamonds. Ever since world records of diamond prices have been broken with some of the largest and rarest pink diamond gems worth over $50M - $70M at auction. At the coming auction at Sotheby’s in New York on the 10th of December, the main items feature several of the rare and magnificent Argyle-mine pink diamonds.
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