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A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Rio Tinto’s (ASX, LON: RIO) Argyle mine in Western Australia will play a key role in meeting China’s growing and changing demand for diamonds, thanks to the mine’s new underground section and its unique gems collection, said the firm Monday.
As the miner’s multi-million-dollar Argyle rare red, blue and pink gems debuted in Hong Kong, the chief executive of the company’s diamonds and minerals division, Alan Davies, said demand for diamond jewellery in China is expected to grow strongly into the next decade.
Currently, China is the world’s second-largest diamond market, according to consulting firm Bain & Co., but Rio says Chinese tastes in diamond jewellery are shifting from an emphasis on large white gems to more coloured rocks for everyday wear.
And to ensure the new demands are met, Rio has opened its doors to about 100 carefully selected gem enthusiasts in Hong Kong, who will be able to see —for the first time in the 30-year history of the Argyle diamonds exhibit— three “fancy red” rocks, including the famous 1.56-carat Argyle Phoenix.
Jewellery makers, connoisseurs, collectors and investors – by invitation only – will view the 64 diamonds of this year’s tender, which have a combined weight of 54.99 carats.
The company is hoping they will sell for more than $1 million per carat.
Due to their shortage, red diamonds are extremely hard to estimate in price. Earlier this year, a 1.92-carat red diamond sold for over $3.2 million, or $1.6 million per carat, at a Christie’s auction in Geneva. The sale set a record for a red diamond on a per-carat basis.
Other highlights at the tender include a 3.02 pink diamond named the Argyle Imperial. According to Rio Tinto, pink gems fetch on average 20 times the price of white diamonds of equivalent size.
Rio Tinto’s Argyle mine is home to 90% of the world’s new pink diamond production, said the company, even though pink diamonds account for less than 0.01% of its total production at the mine.
Image from Argyle Pink Diamonds
