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For world's super-rich, a pink diamond is forever

Published 10/05/2017, 07:22 pm
Updated 10/05/2017, 07:30 pm
© Reuters.  For world's super-rich, a pink diamond is forever
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By Sara Hemrajani

LONDON, May 10 (Reuters) - For the world's super-rich, the investment of choice is increasingly a very rare naturally pink diamond, an asset class that this year has set records at auction.

Tobias Kormind, managing director of 77 Diamonds, which has a shop in London's Mayfair district and sells online, says the trend for coloured stones has gathered strength as the world emerged from financial crisis.

"Very savvy investors clocked on to the fact these coloured stones are so incredibly rare," Kormind told Reuters Television.

Naturally coloured diamonds occur because of a particular lattice structure, formed when they were created at great pressure in the earth's crust, that refracts light to produce coloured rather than white stones.

Depending on their exact structure, coloured diamonds can be blue, yellow, red and pink, but pink is both rare and aesthetically highly prized by collectors, analysts say.

"Pink diamonds are not a bubble. There is a market. People are not just buying, but selling. There is economic sense to this," Edahn Golan, of Edahn Golan Diamond Research & Data, said.

In April a huge 59.6-carat pink diamond, the "Pink Star", sold for a record $71.2 million in Hong Kong. source of an estimated 90 percent of the world's pink diamonds is Rio Tinto 's RIO.AX RIO.L Argyle mine in Western Australia, which has been operating since 1983, meaning its deposits are depleted. Rio says it is due to close in 2021.

Even at the Argyle mine, Rio says less than 0.01 percent of annual production (14 million carats in 2016) comprises pink diamonds.

It does not disclose how much the pink gems add to its balance sheet, but told Reuters in an email Rio Tinto's Argyle pink diamonds have averaged double-digit growth for the last decade.

Analysts say the Argyle pink diamonds tend to be relatively small but vividly coloured. Other mines scattered around the world produce occasional pink diamonds.

The Fancy Color Research Foundation, based in New York and Tel Aviv, publishes indexes that illustrate price changes.

The most expensive category, the vivid pink index, shows an average annual price rise of more than 14 percent since 2005. Other pink diamonds have risen more than 13 percent per year. (Additional reporting and writing by Barbara Lewis; Editing by Dale Hudson)

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