The largest diamond ever discovered was a 3,106-carat Cullinan stone found in South Africa in 1905. The stone was cut into several large polished gems, including the Great Star of Africa and the Lesser Star of Africa, both of which are housed in Britain’s crown jewels.
Botswana, along with African neighbors South Africa and Namibia, is one of the biggest producers of mined diamonds. Australia and Russia also are important suppliers.
Numis Securities analyst Phil Swinfen said it is hard to put a value on a diamond without more details about color or the ways it could be cut. Mr. Swinfen, a former diamond-mining geologist, said the Lucara diamond could fetch between $40 million to $60 million or more based on recent sales of large stones the company has found. Lucara sold a 342-carat type IIa diamond discovered in April for $20.55 million, equivalent to $60,087 a carat.
“Given this stone is likely to be historically significant, the value could take on a life of its own and achieve significantly more—all flowing straight to Lucara’s bottom line,” Mr. Swinfen said. “This is immensely good news for Lucara, perhaps the best week in the company’s history.”
The stone is a type IIa diamond, meaning it is a good-quality diamond nearly devoid of impurities. It is the largest type IIa diamond found in more than a century and the biggest dug up by machines, Lucara said. It was recovered from the south lobe of the Karowe Mine by using Large Diamond Recovery XRT machines.
Lucara is the sole owner and operator of the mine, which produced its first diamond in 2012.
The Karowe Mine joins Gem Diamonds Ltd.’s Letseng Mine in Lesotho, the landlocked southern Africa mountaintop kingdom, as the rockbed for the world’s biggest individual diamond discoveries in the 21st century. Before Lucara, Gem Diamonds held the previous record for this century’s largest recovered diamond: the 603-carat Lesotho Promise in 2006. That gem sold for $12.4 million.
When miners unearth the world’s biggest and rarest of diamonds — like the golf-ball-sized, 357-carat rock found this year in the southern African kingdom of Lesotho — figuring out what they are worth can prove almost as difficult.A 1,111 carat diamond has been recovered in Botswana by the mining company Lucara. The Type IIa diamond is the largest discovered in more than a century and second in size only to the diamond that was used to make the British crown jewels, according to Bloomberg. The diamond is almost as big as a tennis ball.Most diamonds found weigh just a few carats (1 carat is equivalent to 0.007055 oz). Two other huge rough diamonds were found in 2013, at the Karowe mine, both coming in at over 200 carats each (1.4 oz) — still dwarfed by the recent discovery.
The biggest gem-quality diamond ever found was the Cullinan diamond, a 3,106-carat stone found in the Premier mine in South Africa in 1905. The miner who found it was given 3,500 pounds, while the gem became world-famous.
It was given to Britain’s King Edward VII as a birthday gift, who was so worried about its security that he arranged for a decoy to be sent on a ship accompanied by detectives while the real thing was sent in a plain box. It was later cut up, with the largest parts being mounted onto a royal scepter and crown, part of Britain’s Crown Jewels.
Exceptional diamonds, however, are still fetching extremely high prices. South Africa’s Petra Diamonds Ltd. sold a rare 29.62-carat rough blue diamond for $25.6 million in February 2014 to a diamond cutter that fashioned it into a 12.03-carat polished diamond called the Blue Moon. The diamond was sold under the name Blue Moon of Josephine to a Hong Kong buyer for $48.5 million at a Sotheby’s auction last week.
Global diamond production is expected to peak in 2017, when 164 million carats of diamonds are forecast to be produced, according to McKinsey & Co. After that, production is expected to go into a long-term decline, unless significant new discoveries are made, McKinsey’s forecasts show.
Mining companies traditionally sell their discoveries directly to firms who cut the stones into smaller pieces that are polished and sold to wholesalers and jewelers. While the abundance of common varieties in the $80 billion global market provides enough benchmarks to price small gems, giant ones presents a challenge because mining companies don’t usually employ their own cutters and don’t know what it will cost to convert them into polished diamonds.
Gem Diamonds, which in the past decade has uncovered four of the 20 largest white gem-quality diamonds ever found, is seeking to change that dynamic. The company has been experimenting with cutting and polishing a small amount of its own output to better analyze the process of converting the gray, jagged rocks into flawless, jeweler-ready products. The experience helped determine the value of the 357-carat stone found at its Letseng mine in southernmost Africa earlier this year.
“Prior to Gem going into production, the world didn’t hear about these large stones,” said William Lamb, the chief executive officer of Vancouver-based Lucara, which unearthed the biggest diamond in more than a century. “Gem has paved the way for us in creating the market for these large stones.”
About 125 million carats were mined globally last year, according to data from the Kimberley Process, which records and certifies rough diamond shipments. The stones aren’t sold on any exchange and the market is much less liquid than most commodities.
A better idea of valuations would help set a benchmark others can adopt as the discovery of the largest stones accelerates. More than half of the biggest diamonds in the past decade have been found in the two years since Lucara opened its Karowe Mine in Botswana in 2012, which yielded the 1,111-carat diamond found last month. It was the largest since the 3,106-carat Cullinan gem was found in South Africa in 1905. That one was cut into pieces, which are set in the Crown Jewels of Britain.