Pink diamond prices to SOAR after Australian mine that produces 95 per cent of world supply closes

The price of pink diamonds is expected to soar after the Argyle Diamond Mine which produced nearly the entire world supply closes this week.

The world’s largest pink diamond mine began when a group of geologists stumbled across a stone in the Kimberley region of Western Australia in the 1970s.

Since owner Rio Tinto began production in 1983 the mine has produced 95 per cent of the world supply of the rare diamonds.

Twinkling from rose through magenta to purple, the stones have commanded some of the diamond market’s highest prices.

The 12.76 carat Argyle Pink Jubilee pictured in 2012. This rough fancy pink gem is typical of the Argyle mine which has produced more than 90 per cent of world supply since 1983

A selection of beauties from last year’s Argyle Pink Diamond Tender. The last of the mine’s rough stones are now on sale in a trade tender 

Some diamond colours are caused by trace elements such as nitrogen (yellow) or boron (blue), but pink diamonds have not been found to have trace elements.

Instead, scientists believe the pink hue comes from a distortion in the crystal lattice caused by intense heat and pressure.  

The pink stones have accounted for less than 0.01 per cent of Argyle’s total output, with the mine producing more than 865 million carats of rough diamonds over its life.

In 2019, Argyle employed 373 people and produced 12.9 million carats of gems. 

Most of the diamonds mined at Argyle are browns of which only 5 per cent are gem quality, however it has consistently produced high-quality pink diamonds making it a unique deposit. 

But Rio Tinto has decided to close the mine as the supply of pinks is running out and the it is now too deep to excavate beneath and extract them. 

‘The drilling costs are growing, and profits deriving from the diamonds produced are not enough to cover operation costs,’ subsidiary retailer Argyle Diamond Investments said on its website.

Specialist jewellers are to be offered some of the mine’s last pink stones which are on show now in Antwerp, Belgium, and Tel Aviv, Israel. Pictured: a pave-diamond-set pendant

The Argyle mine employed 373 people last year. It will take five years to decommission

Argyle is the world’s biggest pink diamond mine but it produces many more browns, whites and diamonds of all hues

The company only had enough reserves to mine to the end of the year.

When Argyle closes it will take 75 per cent of Rio TInto’s diamond output down, but the impact on the mining giant’s earnings will be less than 2 per cent as diamonds are a small part of their overall business.

Rio Tinto estimates it will take five years to decommission the mine and to start rehabilitation works, followed by rehabilitation and monitoring. 

Kimberley Fine Diamonds proprietor Frauke Bolten-Boshammer, based Kununurra, 200km north of the mine told Bloomberg in July that pink diamond prices had quadrupled in the last 10 years already. 

The 28.8 carat Argyle Octavia, a colourless diamond produced at Argyle. The mine supplied more than 865 million carats since 1983, Rio Tinto said in a release on its website

After the Argyle Mine (pictured) is decommissioned, it will be rehabilitated

Jewellery historian Vivienne Becker told news.com.au that Argyle pink diamonds would ’emerge as the new Faberge egg, the thing jewellery myths are made of’ in the next decade.   

Rio Tinto managing director for operations, copper and diamonds, Sinead Kaufman told the ABC that over the past 20 years, Argyle pinks had risen in value five-fold.

‘Demand for Argyle pink diamonds has continued unabated,’ she said.

‘Rarity, uniqueness and a finite supply has driven the strong value appreciation we have seen, and continue to see.’

The last Argyle pink diamonds are being sold to specialists round the world this month in a trade sale known as a ‘rough tender’, Rio Tinto said on its website.

The ‘Specials’ tender will sell off diamonds larger than 10.8 carats.

A total of 28,399 carats of rough stones will be shown before November 9, both online and in the global diamond hubs of Antwerp, Belgium, and Tel Aviv, Israel.

It will include Argyle’s famous coloureds together with an enormous 26-carat white diamond plus a 74.5 carat fancy yellow named ‘Diavik Helios’ from Rio Tinto’s Diavik mine in Canada.

A separate sale tender is offering pink, violet and blue diamonds to collectors and jewellers including  Argyle Eternity, a 2.24 carat vivid purplish/pink diamond.