When is a big diamond too big to sell?
The diamond industry is a funny one. For the most part, bigger diamonds are always better (in consumers eyes at least) and the stock price of mining companies generally increases upon the discovery of a new, large diamond.
It seems however, that there is an upper threshold, a size limit where a diamond can be considered “too big”. That’s the scenario facing Lucara Diamond Corporation right now.
Back in November 2015, over a record-breaking 2 days, Lucara recovered the Lesedi La Rona (1109cts), the Constellation (813cts) and a 374ct diamond (believed to have broken off the main Lesedi diamond) at their Botswana mine. Subsequently, a Dubai trading company paid a record $63 million for the ‘Constellation’, while Graff recently bought the 374-carat stone for $17.5 million.
But the Lesedi La Rona, in all her dazzling glory, has failed to sell. Sotheby’s put the stone on auction in London almost exactly a year ago, but the maximum bid of $61million fell well short of the stones $70million reserve price tag.
William Lamb, the chief executive of Lucara, had gambled that ultra-rich collectors would covet a 2.5 to 3 billion year old diamond and want to purchase it to keep it in it’s rough state. That bet failed and Lamb now needs to explore other options with regards to the future of the diamond.
Now, the Lesedi la Rona faces an uncertain future as diamond industry insiders believe that in order to sell the stone, the tennis-ball sized rough diamond will need to be cut.
There is a “very, very small universe” of companies with the skill, money and network to polish and sell the Lesedi, which will likely take two to four days for the first laser cut, says Lamb. He admits that it’s unlikely that Lucara can sell the stone for its desired price and polishing the Lesedi itself is risky.
Outside of Graff, other potential cutters of the stone could include Cora International, Diamcad, the so-called ‘King of Diamonds’ Lev Leviev, Mouawad, Tache Diamonds, Optimum Diamonds, the Angolan President’s daughter Isobel dos Santos, Swissdiam International and Rare Diamond House (RDH).
For the moment though, we have to wait and see what Lucara decides to do with the second biggest rough diamond ever discovered.