The Canadian mining firm, Lucara (LUC), must be celebrating its string of good fortune. The company unearthed not just one but two incredible diamonds from the Karowe mine it operates in Botswana. Clocking in at 813 carats and 1,109 carats, these are two of the largest raw diamonds ever found.
Record Auction Prices
Although there have been quite a few major diamond discoveries lately, Lucara’s haul ranks as the most impressive in modern memory. The smaller of the two gems, known as “The Constellation,” was recently sold—uncut—at auction for a whopping $63 million. This sets a new record price for a rough gem of any kind sold at auction. The buyer, Nemesis International, is based in Dubai (part of the United Arab Emirates, or UAE).
Wisely, Lucara retained a 10% stake in The Constellation, thereby guaranteeing it will continue to profit from future sales when the diamond is cut and polished. It ranks as the sixth-largest gem quality diamond ever mined. On top of this, another 374-carat white diamond was extracted from the same site.
Not to be outdone, the Lesedi la Rona diamond that was also pulled from the Karowe mine is expected to sell for another record-setting total when Sotheby’s features it in an auction taking place at the end of June. Interestingly, this diamond received its name (meaning “Our Light” in Botswana’s native language) from a national naming contest.
General estimates are that the Lesedi la Rona will realize at least $70 million at auction. However, if it matches the same per-carat price of its counterpart The Constellation (over $77,000 per carat), it will actually sell for $86 million. Unbelievably, this 1,100-carat diamond is the size of a tennis ball, making it the second-largest ever known behind the famous Cullinan diamond of South Africa. This massive gem was over 3,000 carats and produced several of the largest polished gems ever once it was cut. The biggest cut, known as the “Star of Africa,” is part of the Crown Jewels of British monarchy.
Market Turnaround for Diamonds?
Due to weaker demand around the globe (probably not surprising, given stagnant wages and the economic situation around the world), diamond prices fell an eye-popping 18% last year. This represented the biggest price drop for the prized commodity in any single year since 2008—the heart of the financial crisis. The drop was so big that Botswana, which relies heavily on the diamond mining industry, had to cut its outlook for 2016.
However, some are hoping that the pair of record-setting diamond sales from Lucara could revitalize the diamond market. A lift in diamond prices would match the surge in investor interest in Lucara: the company’s shares have surged over 70% since the discovery of these diamonds late last year.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.