Earlier this year a diamond the size of a tennis ball went up for sale at Sotheby’s. At 1,109 carats, the Lesedi La Rona is not just 500 times bigger than even the ritziest of engagement rings, it is the largest diamond found since the discovery of the Cullinan (3,106.75 carats) in 1905. More remarkable still is the streak of large-diamond discoveries over the past few decades: by one reckoning about as many supersize diamonds (those that weigh 200 carats or more) have been unearthed in the past two decades as were found in the rest of the 20th century. Moreover, this streak seems to be growing hotter. Half of the 20 biggest diamonds discovered since 2000 have been quarried in the past three years, and most of them come from two mines: Letšeng in Lesotho and Karowe in Botswana. Once, these finds would have beautified further the reputation of De Beers, the world’s most famous diamond company; but it had divested itself of both mines – a telling sign of how it has stumbled recently. It sold Karowe in 2009 for $49m, less than the price it received for a single diamond, the 813-carat Constellation that it sold earlier this year.
Until the early 2000s, De Beers was synonymous with diamonds. The firm kept demand rising by spending hundreds of millions of dollars a year on advertising with snappy slogans such as “a diamond is forever” (first wheeled out in 1947). It also tightly restricted supply to keep prices high, even as millions of carats were being dug up from mines in Russia and across Africa. At the peak of its power, De Beers controlled more than 80% of the world’s rough diamonds. Yet its heavy hand also stifled innovation, particularly in mining and diamond-recovery techniques. Although the firm invested in and pioneered many cutting-edge methods to find tiny nubs of value within the tons of grey rock that encase them, its sheer bulk squeezed out research into new technologies elsewhere. “If De Beers didn’t invent it, it didn’t happen,” says a long-time mining engineer and former employee. The massive marketing operation, which was geared to selling hundreds of thousands of small- and medium-sized gems, led the company to focus on mines that were richest in these, and on extraction techniques that maximised their recovery, even if that meant crushing rarer, bigger diamonds in the process.
In the early 2000s, pressure from regulators forced De Beers to loosen its monopoly, and it now accounts for only about a third of diamond sales. New entrants in the business, with different priorities, have been investing in new recovery technologies. The remarkable run of recent discoveries may be, in part, the consequence of this change in the structure of the diamond market.
Miners are getting better at locating and preserving big diamonds. Johnny Velloza, the chief operating officer of Gem Diamonds, which owns Letšeng, reckons that Moore’s law – the principle that computer processing power doubles every two years – has played a key role in making such finds more commonplace. For years, miners have used X-ray machines to help identify diamonds hidden within masses of rock, because they fluoresce when bombarded with rays. But until recently such machines were employed only at the very end of the process, to pinpoint small gems within rock that had already been crushed into pebbles. Now, with the aid of faster computers, sorting machines can use X-rays to scan tons of rock being carried on conveyor belts towards the crushers and instantly analyse the molecular composition of each boulder. When a diamond is spotted, the machine immediately diverts it and saves it from oblivion.
Even so, most of the big diamonds found in recent years have been chipped – for, despite their remarkable strength, diamonds are also very brittle. “It is surprising to most people, but if you drop a diamond and it lands at the right angle it can break,” says Velloza. Miners are now working far harder at understanding the precise dynamics of how they should move and crack open diamond-bearing rock (in a word, gently). Whereas once the ore might have been fed into huge metal crushers or violently tumbled, slabs are now very carefully compressed against each other with just enough force to split them open without damaging their precious cargo.
These efforts are worthwhile because the prices of bigger, and therefore rarer, diamonds rise dramatically. A top-quality one-carat cut diamond might sell for at least $30,000, but a much rarer 100-carat stone will sell for $20m (a price per carat of $200,000).
Yet although the prices are much higher at the top end of the market, the risks are too. “How many buyers are there for a pink diamond worth $10m?” asks Martin Rapaport, an industry veteran. “Maybe 20, so you find one and she wants a blue not a pink.” There is only a handful of jewellers with the capital, appetite for risk and skill to buy diamonds worth tens of millions of dollars each. It can take more than six months of study before they even begin to polish such stones, and months more to complete the work. A single mistake may leave little more than a spatter of fragments beneath the polishing wheel.
Pre-eminent among these jewellers is Laurence Graff, the chairman of Graff Diamonds, which in the past year has polished four stones of more than 100 carats each: “It’s unprecedented,” says Graff, of its recent record. “We’re the only house that could achieve such a miracle.” The powerful role played by such houses was underscored when Lucara Diamond, the Canadian owner of the Karowe mine, upset convention and put up the Lesedi diamond for sale at auction, instead of discretely offering it to high-end jewellers. Lucara hoped to sell the stone for as much as $150m to a private buyer, but the auction bombed and the diamond was withdrawn after bidding stopped at $61m.
“Diamonds have been traded in the same way for many decades,” says Graff. “To attempt to sell a rough stone of this size at auction is unprecedented, it’s just not how things are done within the industry. It was a step into the unknown, and…it proved to be a step too far.”