Canada’s Lucara Diamond mining corp will have to cut down the size of its tennis-ball shaped rough diamond to find a buyer, as per industry insiders. The diamond went unsold at an auction at a Sotheby’s auction in London to sell the world’s largest uncut stone, according to a Reuters report.The 1,109-carat stone nicknamed 'Lesedi La Rona', or 'Our Light' in the national language of Botswana where it was mined, was not expected to go unsold as per Lucara Diamonds CEO William Lamb.
— Lucara Diamond Corp (@LucaraDiamond) May 4, 2016
The Lucara Diamond Corp had hoped that the diamond only the second of its size ever discovered, would be snapped up by ultra-rich collectors but the bidding failed to surpass the USD 70 million reserve price.
As per a statement by Lucara’s chief executive, “It’s only the second stone recovered in the history of humanity over 1,000 carats. Why would you want to polish it?”
The 2.5 billion-year-old stone was auctioned for USD 61 million, which fell USD 9 million short of its reserve price.
The business of diamond trading is understood by very few, that has practically no spot market trading, lack of guarantee of rough diamonds yielding any value and a punishing grading system that can change values drastically.
Why is no one ready to buy big stones?
One of the primary reasons for the failed auction for the big diamond even after meticulous strategy by CEO William Lamb could be blamed on the general risks associated with big stones.
Stones in hundreds of carats come carrying not only heavy price tags but can also involve refining and cutting processes that can stretch for years and an unpredictable consumer demand.
Perhaps the lack of infrastructure and urge to invest into polishing the big piece of stone were also contributing factors as to why the expected price for the stone was not raised at the auction.
Meanwhile, the stone also “weighs” heavily on their stock according to Lamb, which is down more than 30 percent from last year now, hence investor patience is dwindling. Even then Lucara is not in a hurry to sell it.
Lucara's Large Diamond Recovery machine recovered the Lesedi, an 813- carat and a 374-carat stone over two days.Diamond experts are saying that with the advancement of technology more new stones are coming up, however, Lamb is not ready to bet on the same.