After 40 years of operations, the Argyle Diamond Mine in East Kimberley, Australia is finally set to close by the end of 2020.
The mine is responsible for over 90% of the worldwide output of pink diamonds, the most coveted and rarest type of coloured diamonds, and its closure will thus dramatically reduce global supply of this already scarce product.
In addition, due to their ever-increasing allure and new status as collector’s items, there is no doubt that demand will rise as a response to the imminent zero-supply. This is illustrated by the recent auction prices paid for pink diamonds, such as the $ 7.5 million paid for the 3.43ct fancy vivid purplish pink “Bubble Gum Pink” diamond at a Christie’s auction.
Needless to say, these two key drivers combined will result in a dramatic increase in market value for fancy pinks.
From an investment point of view, historic performance already outpaced equity markets by quite a distance. According to Rio Tinto's proprietary data, they have consistently registered a yield of over 10% per annum, or 500% over the past 20 years. And if we look at the speed of the price increases over the last 10 years, it has indeed been a very rewarding investment.
Recent auctions further underline this point, as pink diamonds are consistently overachieving and breaking sales records.
This upward trajectory is expected to be maintained, and now with the closure of their main source, these precious stones are set to be even higher on the list of investors looking at alternative asset classes.
So if ever there was a time to start your journey in diamond investing, now would certainly be it.
Contact BNT Diamonds for expert advice and assistance in finding the perfect pink diamond, as our global connections allow us to procure these special diamonds at the source at unmatched prices.