【Western Aust】Approaching Argyle, the Hometown of Pink Diamonds: The Mine is Closed, but the Hype Remains!

The discovery of the Argyle diamond mine stemmed from a beautiful misunderstanding. In 1895, gold prospectors entered the western region of Australia for exploration and discovered small diamond deposits. Later, in 1972, scholars began geological surveys, but initially only found tiny diamond rough, which was not economically viable for mining. It wasn’t until 1983 when Rio Tinto began mining in sedimentary deposits, and in December 1985, obtained open-pit mining authorization, that this mine became known to the world.

Argyle’s output dwarfs global diamond mines, averaging around 35 million carats of diamond rough annually, accounting for one-third of the world’s rough diamond production. However, only 5% of the rough diamonds are of gem quality. Within this 5%, it is further divided into 80% brown diamonds, 16% yellow diamonds, 2% white diamonds, 2% gray diamonds, and less than 1% pink diamonds. It is these pink diamonds, whose total combined size is less than a palm, that have captured the attention and even driven collectors worldwide to frenzy.

The most famous aspect of Argyle pink diamonds is their rich body color. When it comes to diamonds, one must understand the 4Cs. For colored diamonds, the most critical factor affecting price is Color. The color displayed by Argyle pink diamonds is typically exceptionally saturated and vibrant, captivating collectors.

It employs a unique color grading standard. While the Gemological Institute of America (GIA) grades colored diamonds from Faint to Fancy Vivid across 9 levels, Argyle’s color rating system uses a scale from 9 to 1, with color intensity increasing as the number decreases. Comparing the two, it can be found that within Argyle’s 9-level system, a color rated 5 by Argyle might receive a Fancy Vivid grade from GIA, and there are examples where an Argyle color rated 7 receives a Fancy Intense grade from GIA.

To distinguish Argyle pink diamonds from those of other origins, Rio Tinto has, since 2005, laser-inscribed a unique number on the girdle of every diamond over 0.20 carats produced at the Argyle mine. Today, even diamonds over 0.08 carats receive this laser-inscribed identity proof and come with an Argyle certificate of origin. Pink diamonds over 0.05 carats also come with a small card as proof of Argyle origin. Collectors can verify origin information online officially, providing greater assurance when purchasing Argyle pink diamonds.

Besides pink diamonds, the brown diamonds produced by the Argyle mine are also highly favored by the collector’s market. They similarly come with Argyle certificates of origin and laser inscriptions, offering greater investment potential compared to brown diamonds from unknown mines.

Since most diamonds produced by the Argyle mine were industrial-grade or brown diamonds, initially following De Beers’ DTC sales model encountered significant difficulties. Coupled with the influx of Russian diamonds into the market in the 1990s, the sales of brown diamonds worsened, forcing Rio Tinto to plan its own sales channels to overcome the challenge.

Since 1984, an annual private tender, the “Argyle Pink Diamonds Tender,” has been held, gathering the year’s best selection of 50-60 diamonds from the mine. From these, 5-6 exceptional diamonds, known as “Argyle Tender Heroes,” are selected and individually named. According to Kimberley Process data, Australia’s total diamond production in 2017 was 17,134,730 carats. That year, 63 “Tender Stones” were selected, with a total carat weight of 51.48 carats, accounting for only 1/330,000 of Australia’s annual production, highlighting their rarity.

Because the Argyle mine’s rock formation is a “lamproite pipe,” the diamonds it produces are relatively younger compared to those from the “kimberlite pipes” of other world diamond mines. This results in diamonds that are often fractured, irregularly shaped, and rich in inclusions as small-carat rough. Consequently, only about 10% of Argyle pink diamonds reach or exceed 0.20 carats.

Referring to recent international market quotes, compared to white diamonds, yellow diamonds of the same weight and quality are generally 25% to 50% more expensive. Pink diamond prices are typically 65% to even double that of white diamonds of the same grade. According to a Christie’s report, if a pink diamond is not from Argyle, its selling price is usually 50% cheaper than a corresponding Argyle pink diamond.

From the perspective of the 4Cs, which most influence diamond price, within a budget, purchasing an Argyle pink diamond with a higher color grade, a clarity grade not lower than I3, and a carat weight over 0.20 carats can be expected to yield a higher return on investment.

Additionally, when purchasing an Argyle pink diamond, it is essential to verify the presence of a laser inscription on the diamond’s girdle and whether it comes with the corresponding certificate of origin.

The Argyle mine conducted a feasibility assessment for transitioning from open-pit to underground mining as early as 2001, began planning in 2005, and completed it in 2013. Within just seven years, Rio Tinto announced that Argyle would close in 2020, prompting collectors from all sides to invest.

According to Rio Tinto’s official statements, the price of high-quality pink diamonds has increased by a staggering five times since 2000. Over the past five years, prices have risen at an annual rate of 10%-15%, and it is also predicted that prices will continue to rise after the mine’s closure.

Now, nearly three years have passed since the formal end of mining operations at the Argyle diamond mine. From international auction houses during this period, it can be seen that the value of pink diamonds continues to skyrocket.

The dazzling color and extreme rarity of pink diamonds have made owning one a goal for many collectors. Under conditions of high demand and limited supply, prices have repeatedly climbed. The appearance of each pink diamond in the market attracts collectors, who eagerly compete to acquire them.