The world’s second-largest diamond has been unearthed in Botswana, providing some reprieve for a sector devastated by the rise of lab-grown stones.
The 2,492-carat stone, discovered by Canadian mining company Lucara Diamond, is the biggest known gem-quality find after the Cullinan diamond, discovered more than a century ago, which was cut up and incorporated into the British Crown Jewels.
“This is a once-in-hundreds-of-years event, and an absolute geological phenomenon,” said Clifford Elphick, a former executive of the world’s largest diamond company De Beers, who now runs his own mining companies in southern Africa. He added that the find was “the most significant of this century”.
People close to Lucara estimate the stone could be worth upwards of $40mn. The company’s share price jumped by about 40 per cent on Thursday.
William Lamb, Lucara’s chief executive, told the Financial Times the find was “a sparkle in a gloomy market” and vowed to use the stone to boost the profile of the diamond sector and Botswana.
Factory-made diamonds and the downturn in luxury spending have rocked the rough-diamond market, pushing Anglo American to sell De Beers, the world’s largest producer by value. But giant discoveries remain a vital source of income and marketing power.
“The challenge we sit with is a stone like this needs to be used to drive interest in the diamond market,” Lamb said.
Botswana’s president Mokgweetsi Masisi was presented with the stone on Thursday. Diamonds have formed the bedrock of the southern African country’s prosperity, with mining of the precious gems making up about a quarter of its GDP, according to the IMF.
The stone, which is two-thirds the size of a drinks can, came from Lucara’s Karowe mine, which has been the source of several other big finds including the 1,758 carat Sewelô and the 1,109 carat Lesedi La Rona.
It was found using X-ray transmission technology installed eight years ago after the Lesedi La Rona was damaged in the plant’s mill when it was found.
Diamonds are typically valued based on properties known as the 4Cs: colour, clarity, cut and carat weight.
The stone, which still needs to be examined for its quality, is so big that it cannot be analysed using conventional equipment.
Lucara sold the Lesedi La Rona, a tennis-ball sized white diamond, for $53mn in 2017, although the value that can be secured depends heavily on a gemstone’s colouring.
Lamb said that a sales agreement with Belgian diamond polisher HB Antwerp, which covers all gems above 10.8 carats, had an exemption for “legacy” stones worth above approximately $10mn.
Buyers could include private collectors or jewellery houses. Lamb ruled out Sotheby’s auctioning the stone and singled out luxury groups Louis Vuitton, Bulgari, Tiffany, Chopard and AndreMessika as potential buyers.
The most expensive diamond ever sold at auction was the Pink Star in 2017 for $71mn. Large stones can be difficult to sell because of their uniqueness, the limited number of buyers and difficulty valuing them.
Raj Ray, an analyst at the bank BMO, warned that marketing had to be handled carefully to maximise the stone’s value.
“The diamond sector is what it is. But for Lucara, this is a very positive outcome,” he said.