Industry Analysis

Spring 2016 Auction Update: Big Checks – Mega Diamonds


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Christie’s sold the 14.62 ct. Fancy Vivid blue Oppenheimer Blue diamond – the largest Fancy Vivid blue ever to come up for sale – for $57.5 million on May 18. Courtesy of Christie’s

Big diamonds – really big ones– dominated the news in May. Christie’s sold the 14.62 carat (ct.) Oppenheimer Blue for the highest price ever paid for any gemstone at auction: $57.5 million. Also, mining company Lucara Diamond Corp. auctioned one of its major finds − a 812.77 ct. rough − for over $63 million and will sell its 1,109 ct. rough diamond named Lesedi La Rona at the end of next month.

Lucara auctioned the 812.7 ct. diamond May 8 with the winning bid going to a Dubai-based firm, Nemesis International. It was a record price for a rough diamond and unlike most diamond tenders, which are outright sales, it was for a 90% share in the stone, with the remainder held by Lucara.

The record price will certainly buoy expectations for Sotheby’s June 29 auction of Lucara’s 1,109 ct. stone – the second largest rough diamond ever found. That auction will be very public, conducted at Sotheby’s in London. Lucara had said it expected to sell for more than $70 million, a safe assumption after the smaller of the two fetched 90% of that price.

As if the Lesedi La Rona’s 1,109 carats (originally reported at 1,111 cts.) were not large enough, the company announced that a 374 ct. rough found the day before had once been part of it. The company said it did not know if the piece broke off naturally or during the mining process.

This 1,111 carat rough unearthed in Botswana last year will be sold by Sotheby’s later this year. Courtesy of Lucara Diamond This 1,109 carat rough Type IIa diamond, named Lesedi La Rona, was unearthed in Botswana last year – the second largest ever found − will be sold by Sotheby’s later this year. Courtesy of Lucara Diamond

Both Lucara diamonds came from the Kerowe Mine in Botswana; Lucara, based in Vancouver, is a full owner. Lucara, which found these two large diamonds last fall, said Kerowe had yielded eight stones larger than 100 carats during the first quarter of this year. The mine produces about 100,000 carats yearly with an average price of $649 per carat, according to the company’s annual report.

The Dubai dealer, Nemesis, purchased a 404 ct. rough mined in Angola by Lucapa Diamond Co. earlier this year for a reported $16 million. The diamond will be sold through De Grisogono, a Swiss-based luxury jeweler headed by Fawaz Gruosi.

Another group of significant diamonds – smaller but more colorful – are set to post price records in the final round of spring auctions.

Christie’s sold the GIA-graded 14.62 ct. Fancy Vivid blue Oppenheimer Blue diamond in Geneva on May 18 – the largest Fancy Vivid blue ever to come up for sale. Not to be outdone, Sotheby’s Geneva sold the 15.38 ct. GIA-graded Fancy Vivid pink Unique Pink diamond, the largest diamond of that grade ever to go under the hammer. The $31.6 million price came in at the lower end of the pre-sale estimate for the diamond mined in the old Kimberley deposits in South Africa. A 5.09 ct. GIA-graded Fancy Vivid green diamond will provide the finale for the 2016 spring season. The diamond, tracked from rough to rectangle cut and mounted in a ring surrounded by Fancy pink melee, is expected to sell for $16 to $20 million.

The Aurora Green Fancy Vivid green diamond is rectangle cut and mounted in a ring surrounded by Fancy pink melee diamonds. This 5.03 ct. Fancy Vivid green diamond, named the Aurora Green, is the largest Fancy Vivid green graded by GIA as of this year. It will be auctioned May 31 at Christie’s Hong Kong where it is expected to sell for $16-$20 million. Photo courtesy of Christie’s

ROUGH DIAMONDS

De Beers’ chairman Philippe Mellier has noted that the company is “adopting a prudent mindset” for its rough diamond sales through the middle of the year. The company sold $660 million at its April sight (now called cycle) on top of about $1.2 billion at its two previous cycles in 2016. The company, however, announced its production for the year will be down about 10% – 26 to 28 million carats – for the year.

De Beers remained profitable through a difficult 2015, earning $571 million (half of its 2014 profits, however), but its parent company Anglo American continues to struggle with high debts incurred by other projects that commenced when Chinese demand for resources seemed insatiable. Anglo is hoping to realize some $150 million from the sale of De Beer’s long-time Charterhouse Street headquarters.

Alrosa, the world’s largest producer by volume, estimated its yearly production will be 37 to 39 million carats, equal, to or slightly lower than 2015 levels. The company withheld 22 millions carats from the market last year as demand collapsed in the second half. The company stated that it wants to sell down the stocks it accumulated last year, while also selling new production, but keeping prices stable.

Russell Shor is senior industry analyst at GIA in Carlsbad.