Why it’s hard to put a price on the world’s biggest diamonds

When miners unearth the world’s biggest and rarest of diamonds — like the golf-ball-sized, 357-carat rock found this year in the southern African kingdom of Lesotho — figuring out what they are worth can prove almost as difficult.

Gem Diamonds, which specializes in digging up stones that only a few billionaires are likely to buy, has been taking some unusual steps to confront that dilemma.

The London-based mine owner is replicating on a small scale what middlemen normally do. It cuts, polishes and re-sells some diamonds to get a better sense of what the market is for the world’s biggest ones.

In September, the company had its biggest sale ever when its prized discovery from Lesotho fetched $19.3 million.

Of the hundreds of millions of diamonds unearthed over the past decade, only about a dozen bigger than 250 carats were found, based on a Bloomberg review of company disclosures.

They are so rare that miners aren’t always sure they’re making the best deal.

Because large stones favored by the super-rich have held their value during a slump in prices for smaller, more-common ones, producers have an even bigger incentive to get the best price on their big discoveries. Lucara Diamond, which last month found the second-largest ever, hasn’t yet put a price tag on a 1,111-carat gem the size of a tennis ball, which analysts say could fetch $60 million.

MARKET TRADITION

Mining companies traditionally sell their discoveries directly to firms who cut the stones into smaller pieces that are polished and sold to wholesalers and jewellers after that.