The Profit Margins of Pink Argyle Diamonds
Since mining ceased in 2020, the Argyle mine gems have received much attention. Western Australia's Argyle mine, known worldwide for its exceptional coloured diamonds, stopped production in November 2020. However, the pink diamonds from the mine stood out the most. At the very least, there's a chance of making money.
In its 37 years of operation, the Argyle mine has produced more than 865 million carats of rough diamonds. However, even two champagne flutes wouldn't be able to carry all the reported millions of carats in the famed pink diamonds. Pink diamonds account for only 1% of all diamonds mined.
It's easy to see why Argyle pink diamonds are in such high demand, given that the mine supplied more than 90% of the world's pink diamonds before it closed. Rio Tinto's tender for seventy rare pink and red diamonds, marketed as "the legacy gemstones of the future," received more offers than ever.
Better Investment Than Gold
The pink diamonds mined in Argyle are considered among the highest quality in the world because of their unique, warm colour. Due to their great rarity, pink diamonds can cost up to 50 times as much as white diamonds because no other source can compare to Argyle.
As a result, pink diamonds are no longer being purchased primarily for use in high-end jewellery but rather as an investment with a long-term horizon.
Moreover, according to a report released by the Australian Diamond Portfolio, Australian pink diamonds have outperformed gold, stocks, and cash as an asset class, increasing in value by an incredible 30% over the past 12 months. This is evidence of the growing interest in and investment in this distinctive asset.
William Gant, now the Managing Director of L.J. West Diamonds, has seen the increasing appreciation for pink diamonds on both sides of the business thanks to his experience pricing and arranging Argyle's pink diamond bids for Rio Tinto. Genuine pink diamonds from the Argyle mine are rare, but not all pink diamonds from Argyle are created equal.
He explained that Argyle-certified pink diamonds would be distinguishable by a laser inscription on the girdle and that the demand for these stones would be higher than for regular pink diamonds because of this distinction.
Pink diamonds certified by Argyle can be challenging because the company began making these inscriptions in 2005. However, Mr Gant stated that individuals are willing to spend more for the security provided by a description or an Argyle-origin authentication from the Gemological Institute of America.
Mr Gant compared the Argyle pink diamonds to "art," more particularly, "to a famous artist that has just passed away," when discussing the company's long-term prospects at L.J. West Diamonds.
Mr Gant stated that "L.J. West Diamonds will continue to draw from its substantial inventory of fancy coloured diamonds it has been building since the 1990s. While revitalising old stones, the value of these rare gems is expected to rise dramatically in the coming years, much like that of Monet and Picasso's paintings."
Due to their extraordinary beauty and scarcity, natural pink diamonds have a hefty price tag. These gems are extraordinarily uncommon and fetch astronomical prices on the open market. The value of genuine pink diamonds keeps rising due to their increasing rarity and widespread acclaim.
The price of fancy coloured diamonds follows the same pattern as that of conventional diamonds: it increases with carat weight, cut quality, colour saturation, and clarity. Pink diamonds, especially of the high-end variety, can cost a fortune. As a result, it rapidly exceeds every time it fetches a new higher price.
There has been a dramatic increase in the demand for these diamonds throughout the years. It was predicted in 2009 that open pit mining at the Argyle diamond mine would last for only ten more years until the mine closed permanently.
As a result of the practically complete depletion of items through open pit mining, considerable excavation beyond 2000 metres is required to collect the amounts required. Pink diamonds are becoming increasingly scarce as time goes on, and the effects of widespread mining are still being analysed.
The Argyle Pink Diamond Tender has been one of mine's most successful advertising initiatives for a long time. However, recent tender outcomes have shown that diamond quality is deteriorating with time, increasing value.
Since 1985, the Argyle diamond mine in Western Australia has produced over 90% of the world's supply of natural pink diamonds. Some of the most outstanding examples of coloured diamonds ever mined from the Argyle were pink, but only a select few were saved, polished, and authenticated.
Compared to the stringent criteria of the Australian pink diamond mine, the remaining stones were put to auction and sold in "seconds" since they were better suited for jewellery and had less investment potential.
Most of the other 10% of mined and marketed pink diamonds come from Africa, India, and Brazil, with some pink-purple diamonds from Canada and Russia.
The GIA has conducted significant research into the genetic composition of pink diamonds and has determined that there are only two distinct types, Type Ia and Type IIa. Argyle pink diamonds are nearly always Type Ia, while most other pink diamonds are often Type IIa.
Rarer Type Ia pink diamonds from the Western Australian pink diamond mine are the most incredible option when investing in a genuine pink diamond, as they possess the desirable features.
As a result of their scarcity, Australian pink diamonds fetch a high price. Purplish Pink (PP) and Pink (P) with a saturation of 1 to 6 are the best to consider, followed by Pink Rosé (PR) with a noticeable pink tint.
An emerald, oval, pear, marquise, radiant, cushion, heart, princess, or brilliant round diamond is the superior investment over a modified fancy shape diamond since it is more popular and likely to increase in value over time.
Examining the value of a natural pink diamond over time reveals that those without official Argyle certification have had only a 1% gain in value in the last five years, as reported by the Fancy Colour Research Foundation (FCRF).
The average annual growth in value for Argyle-certified pink diamonds from the Argyle mine is 18.6%, which is noteworthy. It's no secret that people who want to put their money into something tangible prefer Argyle-certified pink diamonds from the Argyle mine.
Moreover, the price appreciation of Argyle-certified pink diamonds has outpaced the Australian All Ordinaries Index and the tendencies in the Australian real estate market.
Since the Argyle mine stopped producing pink diamonds in 2020, a pink diamond from the Australian pink diamond mine is the ultimate limited edition investment due to its deficient supply.
1. Are Argyle pink diamonds a good investment?
As one of the most concentrated forms of wealth due to their size/value ratio, Argyle Pink Diamonds are a stunning fashion piece and a sound financial investment.
2. Do pink diamonds hold their value?
The value of genuine pink diamonds keeps rising due to their increasing rarity and widespread acclaim. The price of fancy coloured diamonds follows the same pattern as that of conventional diamonds: it increases with carat weight, cut quality, colour saturation, and clarity.
3. Is it worth buying Argyle Diamonds?
For a good reason, Argyle Pink Diamonds are among the most coveted jewels in the world. They are not only exceedingly lovely to look at and extremely rare, which naturally increases their worth.
4. How much is a 1-carat pink Argyle diamond worth?
High-intensity Argyle pink diamonds mined in Australia can fetch up to AU$1,428,571 per carat, making pink diamonds the most costly certified treasure.
5. How much is your Argyle diamond worth?
Certified Argyle pink diamonds are much more valuable than "ordinary" pink diamonds. Compared to the AU$200,000 – AU$257,143 range that a 1-carat fancy pink diamond may sell for, a comparable Argyle stone would get well over AU$285,714.