How could something so rare — it is said that one in a million carats of diamonds mined is a pink — become so common as to be given away by the thousands during the Oprah Winfrey television show taped in Australia in December 2011? Did this one event, organized with the necessary cooperation of Rio Tinto’s Argyle mine, take a luxury item and turn it into something akin to a product sold on the Home Shopping Network? Or did the “Oprah effect,” as it is called, make pink diamonds even more sought after? Headlines, after all, often drive jewelry-making decisions, for good or ill.
When did all this pink excitement begin? Possibly with recent auctions. After all, four pink diamonds have been sold at auction for more than $1 million per carat since late 2009. The world auction record price per carat for a diamond and the world auction record price for a pink diamond were both set by the 5.00-carat, vivid pink, cushion-shaped stone sold at Christie’s Hong Kong on December 1, 2009. That stone, set in a ring by Graff, fetched $10,830,719 or $2,166,143 per carat. Talk about increase in value: Just four and a half years earlier, the stone was sold in Graff’s New York store for $3 million. Where else can you triple your money — legitimately, not Madoff-Ponzi style — in that time period?
Way back in 1995 — so last century, marketwise — a world-record price per carat for a pink diamond was set at Sotheby’s Geneva in a November sale, when a 7.37-carat fancy intense purplish pink diamond was sold for $6,011,894 or $815,725 a carat. Compare that with pink’s performance at auction just 15 years later. On November 16, 2010, a 24.78-carat fancy intense pink brought an astounding $46,158,674, or $1,862,739 per carat, at Sotheby’s Geneva. The enormous gem was sold 60 years earlier by Harry Winston and had not been on the market since. Thirteen days later, on November 29, 2010, a 14.23-carat fancy intense pink diamond sold at Christie’s Hong Kong for $23,165,968, or a cool $1,627,966 per carat, double the per-carat price of the 1995 stone. This pink was the most expensive jewel of any kind ever sold at auction in Asia. It came from the aborted Christie’s New York April 15, 2008, sale that offered jewels from Ralph Esmerian’s collection. At that time, the estimate on the stone was $10 million to $15 million. The sale was canceled at the eleventh hour because of a dispute over the ownership of the goods.
The jaw-dropping prices these stones garnered represent the top of the market both in terms of weight and value — at least until something even more expensive comes along. Records, after all, are made to be broken.
Pinks became the stuff of red-carpet legend when basketball player Kobe Bryant reportedly sought to repair his sex-scandal-tinged marriage by giving a purplish pink $4 million diamond to his wife, Vanessa. More romantically, Ben Affleck sealed his 2002 proposal to Jennifer Lopez with a 6.1-carat pink diamond purchased from Harry Winston for a reported $1.2 million. The romance cooled and a few years later, J-Lo moved on to marry Marc Anthony. The pink diamond was reacquired by Harry Winston in 2005.
Until the discovery of diamonds in Australia, with the concomitant unearthing of a reliable supply of pinks, finding a pink diamond was among the rarest of rare discoveries. Large pink diamonds remain extremely rare and are found occasionally in Brazil and in South Africa. Offered, but not sold, at Christie’s New York April 2011 sale was a newly mined Brazilian vivid purplish pink cushion cut weighing 10.09 carats (see High Expectations, page 130). According to Rahul Kadakia, head of Christie’s Americas jewelry department, “The color is outstanding. When you find a really pretty colored diamond, you can look at it anywhere, under any light. You don’t have to stand just this way, under this kind of lighting condition.” That’s a clear reference to the grading system of the Gemological Institute of America (GIA), which rates stones within a box, under a specific type of light. The GIA system has led to some puzzling color grades, particularly when two stones are viewed together under daylight or more open lighting conditions than the GIA box.
The words “scarcity” and “pink” took on new meaning with the discovery of the Argyle mine in Australia. After more than a decade of exploration, mining began in 1985. During its peak years, the mine produced 34 million carats annually, peaking at nearly 43 million carats. In recent years, it has stabilized at 20 million carats, as the mining has been moving underground.
Although pink diamonds comprise less than one-tenth of 1 percent of Argyle’s annual production, the mine supplies more than 90 percent of the world’s pink diamonds. Only 5 percent is gem quality and an infinitesimal part of that is gem-quality pinks.
But even that tiny quantity has made Argyle a leader in the rarified world of pink diamonds. At the top of the chart are the 40 carats to 60 carats offered at private, invitation-only tenders each year. Those stones, averaging 1 carat each, are sold at prices ranging from $100,000 per carat to more than $1,000,000 per carat. In 2010, the tender offer comprised 55 stones.
EARNING A GRADE
One of the problems with color grading is the subjective quality of the descriptive. While GIA can give technical reasons for assigning a “vivid” grade to two stones that to the observer may seem to be worlds apart in intensity, Argyle’s enormous production — some 20,000 to 30,000 carats of rough classified as “pink”each year — allows the firm to refine the grading process into 30 categories of hue and depth of color. It assigns both a letter and a number rating to the wide range of pinks it mines, and then adds another layer of complexity by assigning the stones to groups called purplish pink, pink, pink rosé and pink champagne. Two other color groups — blue-violet and red — stand apart from the pinks. It is possible that the specific, distinctive look of Argyle’s production may stem from its origin within lamproite, rather than kimberlite, the usual bedrock of diamonds.
Origin, however, is knowable only when stones are tracked directly from the mine to the cutting wheel. Once they’re polished, no one can say where they originated. According to John King, head of quality for GIA and an authority on fancy color diamonds, the lab’s approach to grading fancy color diamonds began to change with the appearance of more colored diamonds coming in for certification. “We were seeing colors we hadn’t seen before,” he says. “We looked hard to see what to do about our existing color grading system. The Argyle stones were on our mind. In 1995, we added ‘fancy vivid’ and ‘fancy deep’ as terms for all the grades and hues.” Back in the 1980s, he added, GIA began acquiring smaller natural pinks. These were supplemented by diamonds that had been color treated, for visual comparison.
As always, the cutter is the final word when it comes to the production of a beautiful, richly colored pink diamond. The elusive quality of a pink diamond’s color stems from its internal structure. King explains, “Color seems to form along the slip planes. There’s a deformation of the structure. We often see this occur in the pink-to-brown range. The orientation of the rough during polishing can make a difference in the internal reflections and refractions and you can lose some of that color.”
So, pink diamonds are not only rare, they are also difficult to transform into richly hued polished goods. Of the apparent abundance of pinks on the market today, King concludes, “We have to be careful not to confuse awareness or marketing with quantities. When Argyle goes underground, who knows what will happen?” King says, in reference to Argyle’s ongoing construction of an underground mine below the existing open pit mine. “There really aren’t that many that come out of other locations around the world.”
Article from the Rapaport Magazine May 2011