Finding a huge diamond is dreamy, but selling a huge diamond is tricky
Debswana has discovered the world’s third-largest gem-quality diamond. Now all it has to do is find a buyer. Finding a huge diamond is just dreamy – like winning the lottery but only crazier. But it’s trickier to sell huge diamonds than you might imagine.
De Beer’s subsidiary Debswana announced on 17 June that it had unearthed a 1,098 carat stone in Botswana at the beginning of June.
It said cautiously that “preliminary analysis suggests the stone is the world’s third-largest gem-quality diamond after the Cullinan Diamond that was discovered in South Africa in 1905 and the Lesedi La Rona that was found in Botswana in 2015”.
According to Debswana’s acting managing director, Lynette Armstrong, it’s the largest diamond recovered by Debswana in its history of 50 years of operations. The diamond hasn’t been named yet.
It’s a lot smaller than the 3,106-carat Cullinan found in South Africa in 1905 but just a little smaller than the 1,109-carat Lesedi La Rona.
The Lesedi La Rona was discovered at Canadian company Lucara Diamond’s Karowe Mine, which is about 500km north of Gaborone. A year after the discovery, the stone was put up for auction by Sotheby’s in London and bidding stopped at $61-million but failed to surpass the house’s $70-million reserve.
The following year, 2017, it was bought by British jeweller Gaff for $53-million. Two years later, Graff had cut it into one large emerald-cut diamond, the Graff Lesedi La Rona, and 66 smaller stones. The Graff Lesedi La Rona weighs 302.37 carats. It is the largest, highest clarity, highest colour diamond ever graded, and the largest emerald-cut diamond in the world.
It’s also still for sale. It’s so expensive, the price hasn’t been mentioned. If you have to ask, etc.
Nor was the world’s largest diamond sold in its cut form – it was given away, famously after a suggestion by the then Transvaal prime minister Louis Botha. He proposed buying the diamond for the then king of Britain, Edward VII, as “a token of the loyalty and attachment of the people of the Transvaal to His Majesty’s throne and person”.
At that stage, two years after the stone was discovered, nobody had stepped up to buy it.
The diamond was essentially used as part of a diplomatic exercise because South Africa was building towards union, and was warming up the British to grant the new union home rule. As a consequence, at the vote all the representatives of the Boer republics voted in favour of giving it to Edward VII and all the representatives of the former British colonies voted against.
Whatever the case, it worked. The Union of South Africa was formed, and soon afterwards it was granted home rule.
The Transvaal Colony government bought the diamond on 17 October 1907 for £150,000, which adjusted for pound-sterling inflation is equivalent to $25-million in today’s money. It produced nine major stones of 1,055.89 carats, including Cullinan 1, or what is now known as the Great Star of Africa at the centre of the sovereign’s sceptre, and Cullinan II, or the Second Star of Africa, which is part of the regent’s crown.
There is another problem too. Recently, huge strides have been made in diamond mining technology, including something called the “roll crusher”, which reduces the number of large stones that get damaged in the process of extraction from the rock. Diamonds are fabulously hard, but they do have facets, so they can be damaged if struck at a certain angle.
As a result of the innovation, larger numbers of very large stones have been coming on to the market.
Assuming the stone can be sold, the discovery comes at a great time for Botswana and Debswana.
Production at Debswana fell by 29% in 2020 to 16.6 million carats and sales fell by 30% to $2.1-billion as the pandemic devastated production and demand.
Debswana hopes to increase output by a thumping 38% to pre-pandemic levels of 23 million carats in 2021 as jewellers reopen and the market normalises. Certainly, the sale of a great thumping diamond would help.