On the cusp of Christie’s Foxfire diamond auction in New York City, a Canadian diamond dealer is bullish on the value of real stones, even with the emergence of De Beers’ lab-grown diamonds.
“This is another example of Christie’s taking highly desirable diamond from a Canadian mine and putting it to auction – I think it’s going to sell extremely well,” said Canadian Diamond Exchange president Shaun Baumbach, of next month’s sale. “Diamonds used to be hard to sell at auction, now investors are seeing them sold at record breaking prices and the Foxfire ones could sell at record breaking prices too.”
The Foxfire diamond in the rough was 187.66carats, it has been cut and polished into two earrings at 36 and 37 carats and could bring in $3-million at auction.
Cleaved, cut and polished from the record-breaking 187.7 carat Diavik mine Foxfire stone – the largest known gem-quality diamond unearthed in North America – the pair of teardrop earrings (37 and 38 carats respectively) could fetch more than $3 million.
Both Baumback and De Beers’ CEO Bruce Cleaver agree on the relative value of lab-grown diamonds; the latter in a May interview with Bloomberg described them as “not special, they’re not real, they’re not unique. You can make exactly the same one again and again.” This despite the price points advertised by major retailers declaring 20 or 30 percent “savings” compared to the real thing.
“I saw a commercial on television advertising lab-made diamonds as ‘the rarest in the world’ and I thought ‘whoa,’ they could end up getting sued on this,” said Baumbach. “If I was buying a lab-grown diamond, I’d be extremely careful. Diamonds are rare. The fact is, lab-grown diamonds are not.”
To protect yourself from inadvertently purchasing a lab-grown or other synthetic diamond like a cubic zirconia, Baumbach said to “do what I’ve been telling my customers for 16 years: only buy GIA certified diamonds.”
Last week, De Beers posted figures on its latest sale of Mountain Ice diamonds from the Gahcho Kue mine: US$17.7 million (CDN$23.3 million) from 245,751 carats at an average realized value of US$72 per carat. But, Baumbach said the $200 to $300 price point typical in lab-grown diamond jewelry should not be confused with rough diamond bulk values.
“It takes about 10,000 carats’ worth of white diamonds to be mined in order to get one rough diamond that is going to polish to one-carat engagement ring quality,” he said. “Now to get a fancy intense yellow diamond polished to one carat, the equivalent of 10,000 one carat whites have to be mined.”
The average price of a quality one carat white diamond can run between $4,000 to $6,000 while the yellow fancy would fetch somewhere in the $10,000 to $15,000 range, Baumbach estimated.
“So when people say diamonds aren’t rare, it’s true that rough diamonds of low quality aren’t, but an engagement quality diamond is extremely rare,” he added.
Hau Huynh, proprietor of Arctic Jewellers in Yellowknife told News/North that he only deals in Canadian diamonds from the Northwest Territories.
“I heard about (De Beers lab-grown diamonds), but I never stocked them in my store and I don’t have any customers asking me,” Huynh said. “And I don’t want to sell any synthetic diamonds.”
In Baumbach’s case, “I can get lab-grown diamonds, if a customer wants them. But nobody has asked yet. In fact, I have had customers asking me not to deal in lab-grown diamonds.”