The mine, owned by the firm since 2008, was also where the Cullinan Diamond was found in 1905 - described as the largest rough gem diamond ever recovered and weighing 3,106 carats.As someone who's a bit of a rockhound/rock collector, and at least known some people around the gem trade, I have some observations that I hope are worthwhile.
Other notable diamonds found in the mine include a 25.5 carat Cullinan blue diamond, found in 2013 and sold for $16.9 million, and a diamond found in 2008, known as the Star of Josephine, which was sold for $9.49 million.
First, it will be impossible to explain the allure of a stone like this to some people. Some people appreciate gems, some don't, and of the ones who do, some don't think much of diamonds. You will have to recognize, though, that it will an extremely rare, beautiful thing. It won't just be the only one on earth, it will be the only one in the history of earth. Someone will value that rare, beautiful thing enough to pay that $2 Million per carat for it. That someone will likely be an oil sheik, or perhaps a Russian oligarch, maybe even a Chinese billionaire.
Second, many people will say that with synthetic, gem quality diamonds entering the market, the price is overdue to collapse. I will simply point out that rubies have been synthesized since the late 1800s, and have been available in any quantity you want since then, but that really hasn't affected the price of rubies out of the ground. The highest quality synthetic rubies are hundreds of dollars per gram; the bulk synthetics - like the kind class rings are made from (Verneuil process) - are under a dollar per gram (eBay link). A high quality natural ruby can hit ten thousand dollars per carat (five carats in one gram).
Third, look at the role that final weight plays in the value of the stone. Faceting, even of diamonds, is a process of grinding away portions of the stone to create the flat facets that shape the stone. I find that many people are aware that diamonds can be cleaved, and just think that's how the facets are put on a stone. Nope, they're ground on. A common rule of thumb would be that a faceter will recover about 20-25% of the weight of the rough. A well-shaped diamond crystal, a natural octahedron, can give 50% recovered weight, but this sure isn't an octahedron. There will be study of the optimum way to cleave the crystal into smaller stones (very little stone is lost during cleaving) and then only very experienced diamond cutters will touch it. They will want one stone as big as they can get good optical performance from, and settle for a group of smaller stones. I think.
I can hardly imagine the pressure to get that decision right. Literally millions of dollars riding on grinding away just the right amount of stone. A carat is 1/5 of a gram; that can be ground away fairly quickly. $2 Million turned into diamond dust worth essentially nothing.
There's a saying that "diamonds are where you find them". How much would you spend to find a single stone worth $40 or $50 Million?
I suspect that the price of diamonds has more to do with the cartel than with the technical rarity of them. There is also a subjective, but real, value to the idea that an object is a unique product of nature rather than the result of an industrial process. (I understand this value, but I do not really share it in this case.)
ReplyDeleteFWIW, I think the Cartel has almost nothing to do with the price of stones like this. They're more influential at the 1 to 2 carat level, and smaller, where the supply is managed to equal expected marriage rates in Japan and the US. The Canadian and Russian diamonds have been cutting into the cartel there. Not that the new sellers don't have an incentive to keep prices where they are, rather than flood the market all at once with cheaper diamonds.
DeleteStones like this are the "unique product of nature" and the people with the money will always be attracted to buying things like that. It's like the Crown Jewels of England, the Hope Diamond or the big rock Richard Burton gave Elizabeth Taylor - the royalty always decorate themselves with things like this that the common people can never have.
The cartel's best accomplishment (IMO, of course) is the tennis bracelet. They had a commodity they had lots of without a market to match: the 1/4 carat or so diamond was considered too small for most engagement rings, and the ear ring market wasn't big enough. So they came out with the bracelet they made fashionable and kept a large segment of the stones they had from becoming abrasive/cutting tools. That market has been ruled by synthetics since the 50s.
Oh, you're certainly right about curiosities like this one. These are as prestige as it gets with respect to gemstones. I guess you could say that I'm glad someone owns them but I have no interest in doing so. I was talking about the general market sort of jewelry diamonds.
DeleteDiamonds are usually found in/near some very specific geological formations. Gold on the other hand is found associated with certain volcanic and tectonic formations BUT is often broken away and distributed by earth movements and water thus the expression "gold is where you find it". But even with gold it tends to be distributed to very specific and visually identifiable locations.
ReplyDeleteI think the " 'X' is where you find it" stories are supposed to be allegories for kids.
DeleteDiamond, of course, is associated with Kimberlite pipes - volcanic cores - and is considered unstable in the crust at low pressures. In that sense, diamonds must come from the mantle and direct connections to it. Unlike gold, though, diamonds are exceptionally hard and don't erode in streams, so they carry long distances (they can be broken, however). The density of diamonds is a tiny fraction of gold, so they carry farther in streams. Diamonds have been found in Ohio, Wisconsin, Montana, and other unlikely places. They are thought to have been carried there during the ice ages. (for example)
Gold is very dense, so it tends to drop out of streams and fall to the bottom unless the current it very strong. It stays closer to the rocks it came from. The deposition conditions are completely different, though, so they come from geologically different places.