Australian Pink Diamond Jewelry: The Most Expensive Diamond?

Call it either grace or irony. But scattered throughout western Australia's mammoth but so far mediocre diamond output, comprised mostly of industrials selling for under $10 per carat, are a few fancy pink stones that have commanded up to $400,000 per carat at auction. "We're talking pink with a capital 'P,' " says a New York fancy color diamond specialist.

Before 1985, few pink diamonds deserved even a small "p" so dealers settled for faintly colored stones, believing darker hues too much to expect from nature any more than once or twice in a century. The discovery of diamonds in Australia gave diamond dealers new hopes. Although hearty pink diamonds from Australia probably don't add up to more than a few thousand carats (in the rough!) of its 30-million-carat-plus annual production, this trickle is a flood when compared to output from Australia's past and present rival sources for fancy pink diamonds such as India, Brazil and South Africa. Indeed, some diamond people act like Australia is the first meaningful producer of true pinks.

This explains why the company that since 1982 has marketed the vast majority of Australia's diamonds, Argyle Diamond Sales Ltd., combs through its caratage with fine-tooth thoroughness, singling out the pinks for preferential treatment. As a result, few of these precious roughs wind up in the production Argyle sells to De Beers, its biggest customer, or even on the open market. Instead, the company cuts them in its own factory in Perth, then sells the very best of them at annual invitation only auctions (called "tenders") in Geneva. At the third of these sales in November 1987, London jeweler Laurence Graf paid $3.5 million for all 30 lots-nearly double the $2 million aggregate of all the second highest bids!

Given the dramatic sums that Argyle's pinks bring in behind-closed door sales to dealers, it seems safe to conclude that trade professionals are convinced these covetables are likely to remain needles in huge haystacks- at best once-in-a-while rather than once-in-a-blue-moon affairs. What is it about Australian pinks that stirred up such a commotion in the first place?

Beyond "Pastel" Color: Fancy Pink Diamond

Argyle pinks possess sterling attributes, chief among them, deep body color. This attribute is no accident. Gemologist Stephen Hofer, Colored Diamond Laboratory Services, New York, one of the first to study Australian pink diamonds in depth, noted unique concentrations of minute pink grain lines inside Australian stones that were so dense they could not be told apart unless observed under extremely high magnification. While fancy color pinks from other localities also had pink grain lines, they were invariably fainter and sparser. Hofer therefore concluded that these grain-line congestions imparted very saturate color to Australian pinks. No wonder, then, that a high percentage of Argyle pinks merit the distinction of being called "fancy" color. This is the Gemological Institute of America's highest grade for natural-color diamonds. Most non-Australian pinks submitted to GIA for grading rarely earned ratings above GIA's lower and bottom rung diamond color designations of "light" or "faint' A few managed to earn a second-best designation of "fancy light'. Yet during the first quarter of 1985, when dealers sent a total of 152 Australian pinks for GIA grading reports, nearly all earned the lab's top pink-color grade of "fancy'. That's pretty astounding, considering the fact that those 152 pink diamonds represented more pinks, regardless of grade, than GIA ordinarily sees in a year.

Australian pink diamonds  color is indisputably "fancy'. Never before had we seen such saturation of color in pink diamonds. One did not have to squint to see pink or use charitable euphemisms like "pastel pink" when talking about them. That's because many of these stones veer as much into the purple part of the spectrum as they do into what we call pink (a very desaturated form of red).

Along with the purple, however, often comes a large amount of brown and gray-resulting in a less-than-pure-pink color Hofer aptly describes as "smoky purplish pink'. Use of the adjective "smoky" is meant to convey the impact of the color modifiers gray or brown, almost always present in Australian pinks. For some traditionalists used to fine pinks with color more reminiscent of raspberry, the presence of such modifiers is a drawback. Most dealers, however, think Australian pinks set their own, far superior standard of color excellence.

The Value of Fancy Colored Diamonds

Diamonds that enter the Gemological Institute of America's scale are valued according to their clarity and color. For example, a "D" or "E" rated diamond (both grades are considered colorless) is much more valuable than an "R" or "Y" rated diamond (light yellow or brown). This is due to two effects: high-color diamonds are rarer, limiting supply; and the bright white appearance of high-color diamonds is more desired by consumers, increasing demand. Poor color is usually not enough to eliminate the use of diamond as a gemstone. If other gemological characteristics of a stone are good, a low-color diamond can remain more valuable as a gem diamond than an industrial-use diamond, and can see use in diamond jewelry.

Fancy diamonds are valued using different criteria than those used for regular diamonds. When the color is rare, the more intensely colored a diamond is, the more valuable it becomes. Another factor that affects the value of fancy-colored diamonds is fashion trends. For example, pink diamonds fetched higher prices after Jennifer Lopez received a pink diamond engagement ring. Extremely low grade quality has not stopped creative merchants, such as Le Vian, from marketing Dark Brown diamonds as so-called "Chocolate Diamonds".

Fancy-colored diamonds such as the deep blue Hope Diamond are among the most valuable and sought-after diamonds in the world. In 2009 a 7-carat (1.4 g) blue diamond fetched the highest price per carat ever paid for a diamond when it was sold at auction for 10.5 million Swiss francs (US$9.5 million at the time) which is in excess of US$1.3 million per carat.

Low Recovery Rate

One of the only disappointments about Australia's big find of pink diamonds is their small size. Nearly all that we have seen are melee, averaging around 10 points. Yet, remarkably, the roughs from which these stones come are often fairly large. But due to their highly imperfect nature, as much as 90% must be cut away just to derive one decent polished stone. One dealer told us of a 2.5-carat rough that yielded only a 31-point diamond "And even this stone was still rejection;' he adds. Because most Australian pinks are small, and their color deep, their imperfections are generally more tolerable than if found in lighter color or white diamonds. Consumers with trained eyes might notice slight cracks or etching lines in some stones that impart a rough or pitted texture to small areas. Gemologists have taken to using the word "frosted" to describe the appearance of these areas.

Despite their size and clarity problems, Australian pinks have created a considerable commotion in a very short period. To us, they are truly admirable stones-so admirable, in fact, that the fuss made about them may encourage false expectations on the part of potential customers. Sad to say, the saturate color common in small sizes is hard to find in larger stones. There is one robust-pink diamond from Australia that weighed more than 3 carats, a 3.14-carat purplish-pink cushion-cut stone that sold for $1.3 million at Christie's New York in April 1989. Dealers worry that worldwide media attention paid to such a stone may result in a preference for dark pink-a preference that totally ignores the fact that this color is never found in larger stones.

But even if big pinks with deep color did come on the market with the regularity of small ones, few could afford to buy them. At the Christie's April auction, 16 Australian pinks were offered, ranging from 41 points to 3.14 carats. Of this group, 14 sold-10 of them to members of the public willing to pay tens of thousands of dollars for the privilege of owning pink diamonds with colors connoisseurs could only dream of a decade ago.

Where is the Largest Pink Diamond Mine on Earth?

The Argyle Diamond Mine is a diamond mine located in the East Kimberley region in the remote north of Western Australia. Argyle is the largest diamond producer in the world by volume, although due to the low proportion of gem-quality diamonds, is not the leader by value. It is the only known significant source of pink diamonds, producing over 90% of the world's supply. It additionally provides a large proportion of other naturally colored diamonds, including champagne, cognac and rare blue diamonds. Argyle is currently transitioning from an open pit mine to an underground mine.

In 2013, Argyle is estimated to produce 10.2 million carats with an average per carat price of $25/carat. The Argyle diamond mine is also notable for being the first successful commercial diamond mine exploiting a volcanic pipe of lamproite, rather than the more usual kimberlite pipe; much earlier attempts to mine diamonds from a lamproite pipe in Arkansas, USA were commercially unsuccessful. The Argyle mine is owned by the Rio Tinto Group, a diversified mining company which also owns the Diavik Diamond Mine in Canada and the Murowa Diamond Mine in Zimbabwe.

What are the Most Expensive Pink Diamonds?

1) Pink Start Diamond

In 2013 the Pink Star was auctioned by Sotheby's in Geneva on 13 November. The sale price was $83,187,381 (£52,000,000), a world record for a diamond of any color and, indeed, for any gemstone. Prior to the sale the record had been held by the Graff Pink. The diamond measures 2.69cm by 2.06cm (1.06 inches by 0.81 inches) and is set on a ring. The Pink Star was sold to Isaac Wolf, a well known New York diamond cutter who has renamed it the Pink Dream. The winning bid surpasses the $46.2m paid for the Graff Pink diamond three years ago, which was half the size of the Pink Star. The $83m includes Sotheby's commission.

The winning bid was for 68 million Swiss francs and reports say there was a long silence between that offer and the previous telephone bid of 67m Swiss francs. "Ladies and gentlemen, 68 million francs is the world record bid for a diamond ever bid and it's right here," Sotheby's David Bennett said as he brought down the hammer. Sotheby's played the theme tune from the "Pink Panther" movie after the winning bid was confirmed.

Origin of the Pink Star Diamond

The Pink Star, formerly known as the Steinmetz Pink, is a diamond weighing 59.60 carats (11.92 g), rated in color as Fancy Vivid Pink by the Gemological Institute of America. The Pink Star was mined by De Beers in 1999 in South Africa, and weighed 132.5 carats in the rough. The Pink Star is the largest known diamond having been rated Vivid Pink. As a result of this exceptional rarity, the Steinmetz Group took a cautious 20 months to cut the Pink. It was unveiled in Monaco on 29 May 2003 in a public ceremony.

The Pink Star was displayed (as the Steinmetz Pink) as part of the Smithsonian's "The Splendor of Diamonds" exhibit, alongside the De Beers Millennium Star, the world’s second largest (the Centenary Diamond is the largest) top colour (D) internally and externally flawless pear-shaped diamond at 203.04 carat (40.608 g), the Heart of Eternity Diamond, a 27.64 carat (5.582 g) heart-cut blue diamond and the Moussaieff Red Diamond, the world's largest known Fancy Red diamond at 5.11 carats (1.102 g).

The Pink Star was sold privately in 2007 but neither the identity of the buyer nor the price is on public record.

Former Names of "The Pink Star"

1999–2007: The Steinmetz Pink

2007–2013: The Pink Star

from 2013: The Pink Dream

Are you interested in fancy gemstone? Try... Burma Jadeite: How to Grade a Burmese Jadeite.

2) Graff Pink Diamond

Graff Pink (diamond) is a 24.78-carat emerald-cut stone classified by the Gemological Institute of America as "fancy intense pink"—a high colour rating for pink diamonds—and has been assessed as Diamond Type IIa, placing it in the top two per cent of the world's diamonds.

“What makes it so immensely rare is the combination of its exceptional color and purity with the classic emerald-cut,” David Bennett, chairman of Sotheby’s European and the Middle Eastern jewelry departments, said in a statement. “It’s a style of cutting normally associated with white diamonds and one that is so highly sought-after when found in rare colors such as pink and blue.”

The early history of the diamond is not clear. It was sold in the 1950s by American celebrity jeweler Harry Winston to a private collector, who owned it up until 2010, when it was sold at auction. Despite its rarity, the diamond was unnamed for all this time. The diamond is emerald cut with rounded corners, and is mounted on a platinum ring with two flanking shield-shaped diamonds.

Graff Pink Diamond 2010 Auction

The pre-sale estimate for the diamond was US $27 million to US $38 million (£17 million to £24 million). The diamond was shown around the world prior to the auction in Geneva. It sold for US $46 million (£29 million), making it the most expensive single jewel ever sold at auction. It was bought by diamond dealer Laurence Graff, of Graff Diamonds, who named it Graff Pink.

Have you heard of gemstone horse-tails? Please read to know more... Demantoid Garnet Gemstone Jewelry: What are Demantoid Horsetails?

References:

Renee Newman. 2008. Diamond Ring Buying Guide: How to Evaluate, Identify, and Select Diamonds & Diamond Jewelry, (Newman Gem & Jewelry Series). International Jewelry Pubs.; 7 Updated edition. ISBN-10: 0929975405

Renee Newman. 2010. Diamond Handbook: A Practical Guide to Diamond Evaluation, (Newman Gem & Jewelry Series) International Jewelry Pubs.; 2 edition. ISBN-10: 0929975391

Tamara Cohen (2010-10-26). "£24million pink panther: Rare diamond set to fetch record price | Mail Online". London: dailymail.co.uk.

"Pink diamond to sell for £24m". London: Telegraph. 2010-10-04.

"BBC News - Rare pink diamond sells for record-breaking £29m". bbc.co.uk. 2010-11-16.

Bennett, David (13 November 2013). "'The Pink Dream': An Auction Record for Any Jewel". Sotheby’s.

"Pink Star diamond fetches record $83m at auction". BBC News, Business. BBC.

Gemological Institute of America. "The Steinmetz Pink".

Smithsonian Museum of Natural History. "The Splendor of Diamonds".