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Believed to be the largest uncut Diamond in the World, it fails to sell at a London Auction after Brexit

By 19.09 September 20th, 2018 No Comments

On Wednesday 29 June 2016 the world’s largest uncut diamond found in more than a hundred years, the Lesedi La Rona, went on auction at Sotheby’s Auction House in London. This choice of a public auction, instead of traditional invitations to enter sealed bids, was made by the owners, the Lucara Diamond Corporation, and was the first time that an uncut stone of this magnitude went on auction. Lucara wanted to capitalise on the boom in gem prices and hoped to sell the stone directly to a wealthy buyer for a private collection. To the amazement of Sotheby’s and the bidding audience, this 1.109 carat tennis-ball sized white diamond did not reach the unspecified minimum acceptable bid reserve price! The pre-sale estimate was at least $70 million, but the bidding ended when the highest bid reached was $61 million, $68.3 million with buyer’s premium, $68,300 per carat is a high price to pay for an uncut diamond!

The uncut stone was withdrawn from the auction, and is currently retained by the Lucara Diamond Corporation. The Corporation may partner on the stone or hold a regular tender or perhaps display it in a museum. They have yet to decide the best way forward.

The auction was a gamble for both Lucara and Sotheby’s and perhaps Britain’s vote to leave the European Union may have affected the bidding interest. Potential bidders had a chance to view the stone in advance, but evidently they did not think that the diamond justified such a high price, even if it was cut into smaller stones.

David Bennett, Sotheby’s chairman of jewelry, had called the diamond “the find of a lifetime.” In a statement on Wednesday evening after bidding ended, Sotheby’s said, “Every aspect of tonight’s auction was unprecedented. No one alive today has ever seen a gem-quality rough diamond of this incredible scale; no rough diamond of importance has ever before been offered before at public auction; and no diamond — polished or rough — has ever been estimated at this price level”.

This unique rare stone, thought to be more than 2.5 billion years old, was discovered in November 2015 at the Lucara Diamond Corporation’s mine at Karowe in Botswana. The rough stone, named the Lesedi La Rona, meaning ‘Our Light’ in Setswana, the language of Botswana, has the potential to be the largest high quality diamond to have ever been cut and polished. Previously, in 1905, a 3,106.75 carat diamond was found at the Cullinan mine near Pretoria in South Africa: this stone yielded nine polished diamonds, now found among the Crown Jewels of Great Britain, as well as many smaller stones.

What was the reason that this unique sale failed? We can only speculate on why this auction bet did not come to fruition. Wealthy buyers may have felt intimidated that diamantaires did not exhibit clear bidding leads, and another possibility is that stocks and financial assets had been volatile after the Brexit vote. David Bennett suggested that “the market instability with Brexit may have just caused this to be a case of bad luck or bad timing”, while Tobias Kormind of online retailer 77 Diamonds said “the bullish gem market may have reached a tipping point and demand for large rare stones might just be saturated”.

Diamond analyst Paul Zimnisky told the CBC that the recent Brexit vote likely affected the market for the stone. “I think it was definitely the referendum that passed in the U.K. When you look at the potential bidders of a stone that’s close to a hundred million dollars, you know these are wealthy individuals and investors who have a lot of exposure to financial assets that sold off last week with that news”.

Lucara’s CEO and President William Lamb said “We understand that it is not easy to see the true value in a diamond when the only mechanism is to value the polished. The historical significance of the stone seems to have been missed based on the bids offered”. When asked what role he thought Brexit or other global economic situations might have had on the outcome, he said, “We cannot say. In today’s volatile times, there is always some level of economic uncertainty. Saying this is the reason the auction did not conclude with the sale of the stone would be incorrect, although it may have in some way played a small part”.

The record price for a rough stone was set in May 2016 when Lucara sold an 813-carat diamond at a private auction for $63 million, which is approximately $77,500 a carat.

Clarity

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Color

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Carat

The international unit of weight, used for measuring diamonds and gemstones. 1 carat is equal to 200 milligrams, or 0.2 grams.

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Clarity

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Color

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Cut

Nothing is more impactful on a precious stone’s brilliance than its cut. The cut refers to the angles and proportions of a diamond. Known in the industry as ‘fire’, referring to the coloured light reflected, and ‘brilliance’ for the uncoloured light. The cut of a diamond – its form and finish, its depth and width, the uniformity of the facets – determines its beauty. The skill with which a diamond is cut determines how well it reflects and refracts light. A diamond should be cut proportionally, neither very shallow not very deep, given its dimensions. A diamond’s cut is its most important characteristics and a measure of its apparent beauty.

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Certificate

A diamond certificate or grading report provides an expert opinion on the quality of the diamond and is provided by an independent gemology lab. Trained gemologists with specialized equipment measure the weight and dimensions of the diamond and assess quality characteristics such as cut, color, and clarity. Brilliant Earth diamonds are certified by the world’s leading gem grading labs including GIA, IGI, and GCAL.

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Depth

The height of a diamond, from the culet to the table referred as a Depth of the diamond . Depth % is the height of the diamond as a percentage of the girdle diameter.

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Table

Table referred as the largest facet of a gemstone, located at the top. Table % is the table width as a percentage of the girdle diameter.

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Polish

Polish refers to the smoothness of the exterior of a diamond. Polish is graded from Ideal, Excellent, Very Good, Good, Fair, or Poor. Polish grades of Good or higher have the least effect on the brilliance of the diamond and recommended by us for the finest quality jewelry.

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Symmetry

Symmetry refers to the angles to which the facets are aligned. Basically exactness of the shape of a diamond, and the symmetrical arrangement and even placement of the facets. If facets are misaligned, the diamond may poorly reflect light. Symmetry is graded from Excellent, Very Good, Good, Fair, or Poor. We recommends diamonds with Good or higher symmetry grades.

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Fluorescence

Describes the diamond’s response to ultraviolet light. In diamonds with strong or very strong fluorescence, there may be some interference with the flow of light which causes a milky or oily appearance. Canadian diamonds almost always have none to slight fluorescence.

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Measurements

Diamonds with “fancy” shapes are measured according to their length, width and depth. These diamonds will have a longer axis (the biggest measurement) and a shorter one that represents their width. The depth indicates the measurement of the diamond from the bottom to the top. The relative proportions of a diamond ultimately affect its quality and value.

Round-shaped diamonds are never perfectly round even though they may seem to be that way when you look at them. There is a tiny variation between maximum and minimum diameter, so dimensions are reflected as measurements of maximum diameter, minimum diameter and depth.

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