Rio Tinto’s Argyle Diamond Mine is the world’s largest provider of champagne- and cognac-color diamonds. Since 1983, the mine has averaged 30 million cts. of rough per year. In 2005, it produced 30.5 million cts.
Each year, that huge volume of brown (and sometimes near-colorless) rough includes a handful of very rare intense, vivid, deep, dark saturated pinks. These stones make up the annual Argyle Tender, a silent-bid auction that takes place in six locations: Perth, Australia; Hong Kong; Tokyo; London; New York; and Geneva. This year’s tender comprised 65 stones totaling 61.43 cts., or 0.000002 percent of Argyle’s total production last year.
The New York event takes place in one of the city’s finest hotels, which, for security purposes, we can’t identify. Once upstairs, guests pass security guards and enter a living room with a round presentation table that holds 63 important Fancy Pink diamonds ranging in size from a half carat to 2.03 cts. There are two other very rare and collectible diamonds, a gray-blue and a gray-violet, weighing 0.49 cts. and 1.02 cts., respectively.
Joseph Casella, account manager for Rio Tinto Diamonds, arranged a 45-minute time slot for JCK and allowed us to bring a guest. So I called Stephen Hofer, author of Collecting and Classifying Coloured Diamonds and the world’s top expert on the subject. Hofer brought his colorimeter and, while measuring colors, pointed out some of the most important gems on the table.
As we looked over this year’s selection, we spotted a trend that Hofer thought provided an exciting opportunity for bidders: Many of the pinks were emerald cuts, which, if recut into radiants, might be regraded as purplish-reds.
“The fact the Argyle has given diamond manufacturers room to work with provides ample incentive for profit-driven individuals to recut certain stones and then resubmit them to GIA in hopes of getting a better grade (i.e., ‘red’ on the report),” writes Hofer.
That opinion was not shared by Aurora Gems’ Alan Bronstein, owner of the Aurora Collection. “The emerald cut is so much more elegant,” he says. “I wouldn’t think that recutting to a radiant cut would be an option.
“It’s not just about the shape preference of emerald cut over radiant,” Bronstein adds. “The line between deep purplish pink and purplish red is a very fine line, and darkening the face-up color to achieve red on a certificate doesn’t necessarily make the stone more beautiful or rare. The certificate is more rare and therefore perceived as more valuable. If the stone has life and is red, then it is a true gem. I like seeing that in any shape.”
“I agree with Alan Bronstein,” writes Jordan Fine, vice president of Amgad in New York, another bidder. “The elegance and beauty of an emerald-cut pink diamond is unrivaled, especially emerald cuts deep in color.”
But Fine doesn’t rule out recutting for additional profit potential, and he notes that Amgad is evaluating one of the stones it won for a possible recut into a Fancy Purplish-Red or Fancy Vivid Pink. “The possibility of recutting a deep pink to a purplish red (or even vivid pink) is very enticing, especially when one considers the additional $100,000-plus per carat that can be obtained in the market,” he says.
This year’s edition of the Argyle Pink Diamond Tender presented 65 stones: eight rounds, 21 emerald cuts, 19 radiant/princess cuts, eight ovals, one pear shape, and eight novelty cuts. Despite the focus on emerald cuts, Fine says the rounds were a personal favorite because supersaturated round pinks are so rare. “I suspect they went for a serious premium,” he says, noting that Amgad made strong bids on a number of rounds but didn’t win any. “Rounds are very desirable in Argyle pinks.”
There were 10 Fancy Intense Pinks, 18 Fancy Intense Purplish Pinks, three Fancy Vivid Pinks, nine Fancy Vivid Purplish Pinks, 15 Fancy Deep Pinks, and seven Fancy Deep Purplish Pinks. Four had Fancy Purplish Red grades (one graded red by the Gemological Institute of America, four graded red by AGT, the Association of Japan Gem Trust).
As for clarity, Hofer noted that there were six VS (9 percent), 35 SI (54 percent), and 24 I grades (37 percent). Most stones fell within the SI and I categories, but color is by far the most important consideration. “Pinks from other geographic regions often have less imperfections and are more available in sizes over 1.00 ct.,” writes Fine, but, as he points out, “the trade-off is with color.”
Hofer notes that better cutting makes a difference. “Their Perth cutting factory is trying real hard to get the most color, clarity, and beauty into these gems, and less attention to the weight. … They are making an effort to show their product in the best light, polishing fine gems, and not just putting ‘heavy’ or ‘lumpy’ gems in their customers’ hands.”
This year’s tender was held from late August to the beginning of October, and for the first time was conducted under the auspices of Rio Tinto Diamonds, the sales and marketing division representing the diamond mines of the Rio Tinto Group. The company has mines in multiple sectors—such as gold, copper, iron ore, aluminum and other minerals, and energy products—but its diamond- mining interests include the Argyle Mine, the Diavik Diamond Mine in Canada, and the new Murowa Diamond Mine in Zimbabwe.
Bidders can bid on individual stones, multiples stone, or the entire tender collection. Bids and names of successful bidders are confidential, but, based on our sources as well as Argyle press releases, we believe that tender pinks have been won, on average, for at least $100,000 per carat, with the larger stones sold for possibly as much as $400,000 per carat. Jean Marc Lieberherr, general manager of marketing for Rio Tinto, notes that this year’s tender was the most successful in its history. “Competition was fierce, and demand continues to be high, which, combined with the rarity of the stones, justifies the higher price each commands.”
Candidate stones for the annual Pink Tender—usually about 80 to 100—are prepared and polished by the diamond cutters at Rio Tinto’s polishing facility in Perth, and then sent for grading to three independent laboratories: GIA in New York; HRD in Antwerp, Belgium; and AGT in Tokyo. After the graded stones are sorted, the final tender collection is selected. To qualify, a stone should be at least 50 points, (although some 0.48 and 0.49 caraters have sneaked in on occasion), with good color and clarity. Other rare colored diamonds from the annual Argyle mine production, when found, are also added to the tender.
There were 26 winners this year, including Bronstein and Fine. As for price, Bronstein notes that bidders shouldn’t assume they can buy stones for the same price this year as they did last year. But that’s to be expected, considering how infrequently such stones come on the market. He was surprised that some strong offers failed but deemed his winning offers fair. “If you consider that only 1,200 stones have ever gone through the Argyle Tender, it’s not a lot of stones. … It’s a good investment even for gem dealers.”
“In the final analysis” writes Hofer, “the Argyle Tender stones are ‘super’ pinks. The level of color saturation and the provenance of coming from the Argyle mine make them one of the most sought- after collectible items in the colored diamond market.”