This Week’s Diamond News
Poly Auction Sells Two Diamonds for $10.6M
Hong Kong-based Poly Auction sold two diamonds for $5.3 million (HKD 41.3 million) each at its Important Jewels sale. The loose diamonds, one weighing 30.19 carats and the other 30.53 carats, both had D color and flawless clarity with excellent cut, polish and symmetry. They fetched $176,199 per carat and $174,236 per carat, respectively. The pair of polished stones originated from a 160.21-carat rough diamond mined from Gem Diamonds’ Letšeng mine in Lesotho.
SMSFs invest in rare Argyle pink diamonds
Australia’s army of self-managed super funds are increasingly turning to rare Argyle pink diamonds as an investment as prices for the stones continue to rise.
Luxury jewellery maker Linneys is displaying a collection of 15 pink diamonds at its stores in Perth and Sydney over the next week in one of the largest packages of pink diamonds assembled for sale in Australia outside Argyle’s own tenders.
Linneys CEO David Fardon told The Australian it was likely that at least some of the collection would wind up inside Australian super funds. “We have clients who are buying them in their super funds and there are certainly people who are looking at them as part of their asset mix,” Mr Fardon said.
The healthy appreciation in pink diamond prices — they have gained an average of 15 per cent a year over the past 10 years — means more and more people are looking to invest in the stones through their self-managed super funds. Those funds are able to invest in pink diamonds under the provisions around “collectables”, which also govern asset classes such as art works and vintage cars.
Self-managed super funds investing in diamonds must be able to pass several conditions including the “sole purpose test”, which requires investors to demonstrate that the gems are not stored at home or at the private residence of a related party and that they are not deriving any “personal enjoyment” from the stones.
“There are many, many people who buy pink diamonds because of the aspirational factors and the fact they want to have a beautiful piece of jewellery that has a very small piece of Australia in it, but there are others — and we’ve certainly seen it become more pronounced in the last five years — who have been looking at them as an investment because they have continually appreciated in value over time,” Mr Fardon said.
The most valuable item in the Linneys collection is the $3 million Blossom ring, which includes five pink gems and a rare grey violet diamond. While prices for typical diamonds have generally remained flat over the past decade, pink diamond prices have been boosted by their rarity and concerns about future supply. Rio Tinto’s Argyle mine in Western Australia’s Kimberley accounts for the bulk of the world’s pink diamonds, and is currently expected to operate until at least 2020.
“What has become more apparent in recent years is there is an understanding they are highly collectable and the mine is not going to continue forever and a day,” Mr Fardon said.
“You have this situation where there is increasing consumer awareness, both locally and internationally, at a time when the outlook for the supply is that it is eventually going to come to an end.”
“More information is always better than less. When people know the reason things are happening, be it good or bad news, they can adjust their expectations and react accordingly.”