The price of pink diamonds has risen significantly in the past 12 months, delivering an average return on investment of 30 per cent, the inaugural Australian Diamond Portfolio Pink Diamond Index (ADPPDI) shows.
This sharp increase has accelerated since Rio Tinto closed the Argyle mine in Western Australia in late 2020.
Rio Tinto delivered record-breaking results from its 2021 Argyle Pink Diamonds Tender and Once in a Blue Moon Tender, which took place this week.
The 70 rare pink and red diamonds that comprised Rio Tinto’s Argyle Pink Diamonds Tender delivered alarming price performances across the board, while Hong Kong fancy coloured diamond specialist Kunming Diamonds made a history-making bid to acquire the company’s entire 2021 Once in a Blue Moon Tender collection of Argyle blue and violet diamonds.
With 37 years of Argyle pink diamond production in global markets, Rio Tinto has made the decision to maintain and manage the Argyle Pink Diamonds brand through secondary market platforms, certification processes and creative collaborations with its trusted partners going forward.
Australian Diamond Portfolio executive director Anna Cisecki said collectors are running out of time to get their hands on the diamonds, hence the booming price.
“As the Argyle mine produced 90-95 per cent of the world’s pink diamonds and with no future pipeline identified, prices have since skyrocketed,” Australian Diamond Portfolio executive director Anna Cisecki said.
“Prior to the closure of the mine, pink diamonds have been a consistently strong investment too; the ADPPDI shows that over the last 15 years, they have appreciated in value by 10-12 per cent per annum.
“This is substantially better than most other asset classes including silver (US dollars), cash and Australian shares, which by contrast have only gone up by 3.5-6.5 per cent per annum.”
Pink diamonds have always been incredibly rare, making up less than one per cent of all the diamonds produced at the Argyle mine.
The three main categories of pink diamonds have all seen rapid price growth, with the increase in demand set to continue in years to come.
“In the face of low-interest rates and increased financial literacy, people are looking to diversify their portfolios,” Cisecki said.
“Pink diamonds are a relatively undiscovered asset class for everyday investors, SMSF holders and high-net-worth individuals looking to capitalise on the investment opportunities they provide, including a lasting legacy and a discreet transfer of wealth.”
If a new mine were to be discovered in the near future, it would still take a minimum 10-15 years to reach the actual stage of producing diamonds to sell.
“We have seen a 600 per cent increase in pink diamond certifications over the last five years, due to the excitement in their growth,” Diamond Certification Laboratory Of Australia’s Roy Cohen said.
Investing in a pink diamond starts from $20,000.