The diamond industry found some sparkle in an otherwise gloomy scenario last week when diamond miner Lucara Diamond Corp reported that it had discovered a 1,111 carat rough diamond at its Karowe mine in Botswana.
And what a bright spot it was! The diamond was the 2nd largest diamond ever discovered, only behind the 3,106-carat Cullinan diamond found in South Africa in 1905, making it the largest found in over a hundred years!
Reportedly the stone was so large (65mm x 56mm x 40mm) that it could not be placed in even the largest computerised scanner used nowadays for doing a quick assessment of a diamond's quality, and so a more detailed analysis of its parameters, and its possible price, is awaited.
Within hours of the company's announcement, the story was being flashed across the media with news, business and lifetsyle channels and publications all quick to focus on this historic discovery.
Close on the heels of this massive find, Lucara also announced the recovery of "two more exceptional white stones" - one 813 carats and the other 374 carats, the former being ranked as the 6th largest diamond ever found!
Both would have been the stuff of headlines on any other occasion; now they faded into the background amidst the sparkle of the 1,111 ct stone.
Earlier this year, the Canada-based miner had already sold a 341.9-carat diamond for $20.6 million.
Botswana ranks second among diamond producing countries across the world, and the Karowe mine, which is owned and operated by Lucara, is now proving to be one yielding some of the most lucrative stones.
The news has certainly aroused some investor interest in the company itself as well as the diamond mining sector as a whole. Lucara shares shot up immediately by nearly 30 per cent.
Lucapa and Gem Diamonds are two other mining companies that have stayed in the limelight as a result of discovering big diamonds in the properties they are exploring in Angola and Lesotho respectively. While in just a couple of cases the diamonds have been really large, these rarer diamonds (of 10 carat and more) have found buyers at more attractive prices and far more easily than the smaller stones.
Diamonds are one of the rare commodities where there is no defined unit price. Stones of the same size may vary in quality, clarity, colour and other parameters. Also prices do not multiply alongside size; one two carat diamond, being rarer, is more valuable than two identical stones weighing a carat each.
In fact, much of the romance of diamonds, its unique USP that had made it one of the most aspired to possessions in the world, is the lore built around large stones.
The millions of carats that India exports every year make for good business, but it is the exceptional stones that garner all the consumer attention. The Koh-i-noor for example still arouses passion, and makes headlines, while stunning diamonds like the blue and pink diamonds purchased recently by Hong Kong tycoon Joseph Lau achieve record breaking prices at auctions.
This is a sort of a challenge to the diamond mining companies. On the one hand fewer and fewer headline making diamonds are being discovered; on the other hand, new age consumers want to go beyond the sparkle. They look for other stories associated with diamonds - are they mined in an eco-friendly manner; do they finance wars and conflicts or are they aiding development? Miners like De Beers and Rio Tinto have been attempting to tell such feel good stories as well, crafted around the progress that communities in the mining areas have made as a result of beneficiation.
Alongside stories of who wore what to the Oscars, or what was the size of the stone that Ben Affleck gifted to J Lo, are some of the stuff that continue to be talked about long after they are over.
For many years now, analysts have been seeing a plateauing out of diamond production. The actual quantity of diamonds mined over the last few years has declined to 134 mn carats in 2015 from a peak of 176.7 mn carats in 2005. While production swings in the past have mirrored the booms and dips in the global economy, analysts now believe that old mines are getting depleted at a faster rate than new mines are emerging.
The discovery of a few exceptional to very-exceptional stones in some mines may not do much to alter this reality. But, there's nothing like a good old mega diamond to really get the world excited!
Columnist
He has been a journalist since the mid-1980s, and has spent close to two decades tracking the gem and jewellery industry while holding different editorial positions in industry specific publications and websites
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