Since the mid 1980’s the argyle mine in Kimberly, Western Australia, has been steadily supplying a range of fancy coloured diamonds into the jewellery market. Natural fancy coloured diamonds produced from the mine include white, champagne, cognac, red, blue and sought after rare pink diamonds. Each diamond has a chain of custody to verify its provenance and is laser inscribed at the argyle mine to verify its origin.
Known as the Argyle Pipe, the mine exposes diamonds which were created by an igneous extrusion of magma from the earth’s surface which formed under excessive pressure. Having produced over 750 million carats over its lifetime, it’s estimated that there are still approximately 93 million carats left in the argyle pipe. Following 30 years of opencast mining, the mine has now been a fully operational underground mine since 2014 following significant investment from Rio Tinto. Production rates for 2016 came to only 16.8 million carats a fall of approximately 7 million carats. According to the latest news from Diamond expert Ehud Arye Laniado, the argyle mine’s “eventual closure will no doubt have a significant impact on the diamond industry, and change the face of global diamond supply.”
Inevitably the demise of the argyle mine in the coming years will drive prices of fancy coloured and pink diamonds sky high. Where demand is high and supply is low, rarity increases as does price. The jewellery market has been accustomed to a steady supply of fancy coloured diamonds which has enabled the price of fancy coloured diamonds to steadily rise in a controlled manner. However, with lack of supply, prices of fancy coloured diamonds will spiral out of control as investors and diamond experts realise their increased rarity.
To have a high-quality mine supply such exquisite gems over a period of 35 years is unprecedented in diamond mining history. Therefore, the value that the Argyle mine has brought to the market has been dramatic. A range of intense fancy coloured stones from pink, red, blue, violet, champagne, brown and yellow has revolutionised the jewellery and indeed the investment industry. Thus, it’s reduction in supply and indeed any mine closure will have an even greater impact on the diamond industry.
This points to a very limited window of opportunity to obtain further fancy coloured diamonds from the argyle mine. With no other mines being discovered, this supply will simply cease causing the price of pink diamonds and other fancy coloured gems to go through the ceiling. Demand for fancy coloured and pink diamonds is already at an all-time high and is set to rocket in the next 2-5 years as the argyle mine offers up its last few carats of exquisite diamonds.
As much as it changed the diamond industry’s course when it opened, the argyle mine is set to do so once more when it closes. As the only lamproite mine formed over 1.178 billion years ago, it’s such a rare occurrence that its’ unlikely that such a mine will ever be found again. Moreover, even if such a discovery were to be made, it would take many decades before a mine would ever be viable to the degree of the Argyle mine. So, from an investment perspective, those who wish to own, or already possess a fine example of argyle pink diamond, understand how dramatically the value of such diamonds will increase in the following years.