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Pink diamonds are the rock of ages.

Pink diamonds are the rock of ages.

With limited supplies and demand at a premium, rare and mysterious pink diamonds are a shrewd investment, writes Julie Miller.

It’s the ultimate ‘rags to riches’ tale: a dirty lump of carbon, placed under extreme pressure and temperature deep in the Earth’s mantle, emerges at the surface billions of years later as a glittering diamond, the most valuable and alluring gemstone known to man.

 

On a rare occasion, however, this epic saga doesn’t go to plan. In perhaps one diamond in a million, the intense pressure results in the distortion of its distinctive lattice molecular structure, causing it to manifest in a shade of pink. The reasons behind this are still a scientific mystery; but what is clear is with these flaws comes a new standard of perfection, with pink diamonds (and their still scarcer cousins, violet and red diamonds) the most sought after in the market.

 

Pink diamonds are beautiful simply by virtue of their colour, but combine this with their rarity, they are, effectively, the collector’s item of the gem world.

 

Pink diamonds are as rare as they beautiful, accounting for less than 0.02 per cent of all of the diamonds produced in the world. Of these, 90 per cent are mined from Rio Tinto’s Argyle Mine in the Kimberley region of Western Australia, and even then they comprise less than one per cent of the mine’s production.

 

“In real terms, an entire year’s worth of pink diamonds over half a carat would fit in the palm of your hand,” says Josephine Johnson, the Perth-based Manager of Argyle Pink Diamonds. “The number of reds and violets would barely fill a teaspoon.”

 

“The discovery of the Argyle Diamond Mine in the late 1970s was a watershed moment in the history of diamonds. Prior to this, pink diamond finds – anywhere in the world – were sporadic. These few diamonds were destined for turbans and tiaras and were the preserve of the fortunate few to the extent that most people had never heard of, let alone seen, a pink diamond. This all changed with the advent of the Argyle Mine,” Johnson explains.

 

Julian Farren-Price, Director of J Farren-Price, an Argyle Select Atelier, believes it’s a privilege to work with these gems. “Pink diamonds are beautiful simply by virtue of their colour, but combine this with their rarity, and the fact that they are one of our country’s most famous natural resources, and it’s a pleasure to work with what is, effectively, the collector’s item of the gem world.”

 

 

 

 

Emerging markets

But with this source approaching the end of its mine-life (it is expected to close after 2021), the supply of pink diamonds remains extremely limited.

 

“With the understanding that the production won’t continue forever and a day, there’s now an increased consumer demand, particularly from some of the emerging markets like China and India,” David Fardon, CEO of leading atelier Linneys, says. “So what was already a competitive market has become even more competitive, and that’s been reflected in price appreciation over time.”

 

According to Fardon, pink diamonds are worth more than 25 to 30 times that of their white equivalent, with more saturated stones up to 50 times the price.

 

Since 1984, Rio Tinto has saved its finest and most valuable pink diamonds for an annual invitation-only tender, considered among the most exclusive diamond sales in the world. In 2016, this consisted of 63 pink, red and violet diamonds known as the Chroma Collection, with the dazzling centrepiece jewel – the 2.83-carat Argyle Violet – secured by a US-based diamond specialist for display in a museum exhibit, a fate not uncommon for as many as 65 of the finest Argyle diamonds, according to Johnson.

 

 

 

Images courtesy of Rio Tinto

 

Shrewd investment

Pink diamonds sold at tender have appreciated more than 300 per cent over the past 15 years, putting them more in the league of fine art than jewellery; but even pink diamonds secured at auction or via one of Argyle’s Select Ateliers remain a shrewd investment, increasing in value by approximately 15 per cent per annum.

 

“Most people who are looking at jewellery do so with the view of enjoying it, knowing they’ve got something special that gives them a lot of pleasure. It might be about a significant time in their life; and in many cases with pinks, they are pieces that will get handed down through the family,” David Fardon says. “But of recent years, some people simply buy them with the view of putting them in the back of the safe, looking at what the appreciation in price is at the time.”

 

“If you’re looking for a solid investment, look for items that are as collectable as possible; in pinks, the more intense the colour, the rarer they are and therefore the more valuable they are. It’s about getting a well-made diamond that meets certain critical weights and as strong a colour as you can afford.”

 

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