Diamond in the rough fails to make the cut

4 Jul 2016

Selling off the biggest stone of the century proved harder than expected, when the golf-ball sized uncut Lesedi la Rona diamond failed to reach its reserve price at auction in London.

The highest bid fell $9m short of the reserve price of $70m, owners, Canadian mining company, Lucara Diamond Corporation, placed on the 1,111 carat stone.

Lesedi la Rona

Sale a bust

The way in which the diamond was offered to sale breaks with tradition. “Such stones are offered to a handful of sophisticated dealers in the diamond industry, who study the diamond for weeks to determine how many cut stones the rough one will yield. After figuring how much those stones will be worth, they submit a sealed bid to the mining company,” says a report in The New York Times

Lucara thought that selling the uncut gem at auction would tap into the market of extremely wealthy people who want to own rare or unique items, and are willing to pay vast amounts of money for them.

However the plan backfired in this instance. CEO, William Lamb told Reuters that the company had not yet decided what to do with the stone, but possibilities include loaning it to museums to increase its exposure and to help educate the public about diamonds.

Shares in Lucara ended down 14,5% on the Toronto Stock Exchange after news of the failed sale.

Second largest in the world

Recovered in November 2015 at the Karowe mine in Botswana, the diamond is the second largest gem-quality stone ever to be recovered, and the largest so far this century. Honours for the largest is still held by the famed Cullinan diamond, weighing 3,106.75 carats discovered at the Premier No. 2 mine outside Pretoria in 1905. Some of the gems produced from the Cullinan diamond adorn the Crown Jewels.

Lesedi la Rona, which means “Our light” in Setswana, measures 65mm x 56mm x 40mm in size. The Type IIa diamond is a rare and coveted subgroup which comprises less than 2% of all gem-quality diamonds. Stones in this group are the most chemically pure and often show extraordinary optical transparency.

It was named in a competition, where entrants were invited to submit their suggested name and their rationale for their choice.

In May, Lucara Diamond sold its 813 carat uncut diamond, The Constellation, which it found at the same Botswana mine as the Lesedi la Rona, for $63,1m.