What is a Diamond Tender?
A diamond tender is an auction hosted by major mining companies as a way to sell their rough and polished diamonds, as opposed to diamonds sold through direct negotiations or sightholder systems (a sightholder is one of 93 companies on the De Beers Global Sightholder Sales (DBGSS) list of authorized bulk purchasers of rough diamonds).
Back when the diamond tenders first began, the diamond market worked on a trickle-down model through DBGSS. Some Sightholders cut and polished the diamonds to sell to retailers while others sold roughs to manufacturers, giving more companies access to rough diamonds. These were viewed as secondhand goods, better known as the secondary market. Over time, miners began to market and auction their own goods.
Today, tenders have become must-attend events in the diamond industry, but none compared to the Argyle tender. When the Argyle Mine was still operating, they were the largest producer in the world by volume and offered collections of the best pink diamonds year after year, known as the Argyle Pink Diamond Tender.
The annual Argyle Pink Diamonds Tender was an ultra-exclusive invite-only silent auction event for 100 or so lucky attendees. The Argyle tender offered the mine’s rarest polished pinks, which was an event the entire diamond industry looked forward to. To date, there are no other consistent sources of pink diamonds, and even if another deposit of pink diamond-bearing ore is discovered it would take on average 10 years for a mine to proceed from discovery to production. (Source: Financial Times)
Argyle pink diamonds were typically small but have an unrivaled color potency to them. The pink diamonds Argyle is famous for only made up 0.13% of the approximately 865M carats of rough diamonds mined since Argyle’s production began in 1983. The mine will be remembered for about 1,800 carats of cut fancy color diamonds — primarily pinks, but also reds, blues, and violets. To put that into perspective, an entire year’s worth of Argyle pink diamonds larger than half a carat would fit in the palm of your hand. The diamond industry will need to readjust to life after the Argyle tender, as the mine closed operations in November 2020.
Without Argyle's consistent supply, investors are bracing for prices to soar. According to auction data, prices have risen by 300% in the past decade and doubled in the past five years. It’s not something a future bridal couple or jewelry fan might notice for a year or two, but when dealers sell what remains of their Argyle stocks, pink diamonds are expected to become costlier, while lower-end jewelry made with natural diamonds may become more scarce.
Please email FCD Invest at email@example.com to discuss your personalized long-term investment strategy. For more information on Fancy Colored Diamonds as an investment, please visit our Fancy Colored Diamond informational page linked here.