The Argyle mine which is among the world’s biggest diamond producing mine and the primary source of pink diamonds shutdown mining operations in 2020 and this triggered a ripple within the diamond industry that is only being felt now – 3 Years later!
Located in a remote region of North Western Australia the Argyle mine was among the top producers of diamond on the planet in terms of volume and in 2018 the mine produced close to 14 million carats and despite the fact that a big percentage of the 14 million carats were not gem-quality diamonds did not change the fact that it still managed to produce a significant amount of rare pink and red diamonds.
The Argyle mine produces slightly more than 90% of the global supply of pink and red diamonds and also produced a significant percentage of other types of coloured diamonds such as champagne, rare blue diamonds and cognac.
Despite the mine holding the title of being amongst the world’s top diamond producer, mining operations came to a halt in November 2020, nearly after four decades of operations and nearly 900 million carats of rough diamonds.
The operators of the mine Rio Tinto are currently in the process of rehabilitating the site which will be complete in 2025.
The impact of the closure of the Argyle Mine to wholesale diamond shop supply across the globe has been significant as the total supply of coveted pink diamonds has shrunk by 90% which renders these types of diamonds even rarer than before.
Even prior to the closure and when demand for diamonds in general were stable, the announcement of the closure lead to a surge in demand for rare pink and red diamonds that were the most popular type of diamonds for wedding and engagement rings. The speculations that were triggered due to the closure of the mine were however slow to catch on.
The speculation that diamond prices will increase significantly in 2021 onwards due to the fact that global supply of diamonds will drop by an approximate 14 million carat did not happen. This speculation has only just taken root 3 years after the closure.
The reason behind this late increase in prices is also due to the lab grown diamonds that have grown in popularity because of the lower prices and in many ways higher quality of these synthetic diamonds.
The void created by the closure of the Argyle mine was quickly filled by lab grown diamonds which have kept prices stable within the realm of the natural diamond market.
However, the biggest impact that the mine’s closure has had on the market is in fact quite specific and revolves around the rare red and pink diamonds as supply has not been able to meet demand which has cause the surge in prices, especially for the pink stones that the mine has been popular for.
As for now, all indications points towards a substantial increase for the availability to buy Argyle pink diamonds in Melbourne within the next few years and in the event that no new sources of diamonds are found, prices will continue to climb.
