5 of Australia’s Rarest and Most Valuable Diamonds

There are three famed diamond mines in Australia: Argyle, Ellendale and Merlin.

Combined, the mines have supplied millions of carats worth of gems to the global market, and individually they have produced some of the rarest, most exquisite stones ever recovered.

In previous years, Australia has ranked fourth in global diamond production with annual output of roughly 14.2 million carats. However, the country is unlikely to take a top spot in 2021.

That’s because 2020 was a transitional year for the nation’s diamond sector with the permanent closure of Argyle, its only operational diamond mine. As one of Australia’s most prolific mines, Argyle produced 865 million carats over 37 years, including 90 percent of the world’s rare pink diamonds.

The mine is now in rehabilitation after almost four decades of output, and its closure has left the national diamond sector in a state of flux. Home to some of the most distinctive kimberlite pipes in the world, there is ongoing exploration, as well as talk of restarting Merlin and Ellendale.

“I believe Australia is still quite speculative for diamond exploration,” said diamond analyst Paul Zimnisky. “There have been exploration efforts in recent years that have been somewhat disappointing, but I think the upside offered is still quite intriguing.”

Regardless of what’s ahead for the sector, Australia’s miners have a long history of finding unique and rare gems. Here’s a list of five of the most exquisite diamonds ever unearthed in the country.

1. 104.73 carat rough white diamond

Recovered in 2001 from the Merlin mine in the Northern Territory, Australia’s largest diamond discovery weighed in at a whopping 104.73 carats and was valued at US$500,000.

Despite the major diamond find, Merlin was never able to reach its full output potential and was sold to a number of companies, including Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and the now-defunct Ashton Mining and Merlin Diamonds (formerly North Australian Diamonds).

 Image courtesy of the Australian Museum.

The most recent owner, Merlin Diamonds, was delisted from the ASX in 2018. Deloitte was appointed as liquidator in 2019 after an investigation by the Australian Securities and Investment Commission (ASIC).

“In October, ASIC kicked off a probe into an AU$13 million-loan from the mining group to a private company associated to the diamond producer’s owner,” reads a report from Deloitte. “The owner of Merlin Diamonds, mining magnate Joseph Gutnick, had in recent years completed a number of such loans and has proven unwilling or incapable of repaying the loans.”

In late 2020, Africa-focused diamond miner Lucapa Diamond (ASX:LOM) expressed interest in acquiring the Merlin asset, adding the short-lived mine to its portfolio.

“Merlin is a multi-pit mine development opportunity with underground mining potential and is home to Australia’s largest recovered diamond of 104 carats,” notes a December company statement. “Lucapa is of the view that the tenements also have considerable exploration potential with a significant number of unresolved exploration targets.”

2. 35.26 carat rough brown diamond

Another memorable discovery from Merlin is a 35.26 rough brown/champagne diamond recovered in 2017. The stone is considered the fifth largest diamond ever found on the continent.

According to Geoscience Australia, the Merlin orebody produced more carats on average than Argyle even though Argyle is viewed as the country’s most notable diamond mine.

“A number of small diamond ‘pipes’ with a much higher proportion of gem-quality diamond than Argyle have been mined at Merlin in the Northern Territory and Ellendale in the west Kimberley region, both of which are currently not in operation,” states the government agency.

Known for its large, super-white, high-quality diamonds, a number of remarkable coloured stones have been unearthed at Merlin as well.

In addition to the 35 carat brown/champagne stone, a 14 carat champagne-hued stone was recovered, as well as a particularly uncommon blue diamond.

“Although only a small diamond at 0.124 carats (the blue diamond) does demonstrate the potential for valuable coloured diamonds at Merlin,” Merlin Diamonds said in a 2017 statement to the ASX. “Blue diamonds are one of the rarest diamond colours and high quality blue diamonds are known to command prices higher than pink diamonds.”

3. 28.84 carat white diamond

Despite being renowned for its pink and red diamonds, the Argyle mine has also produced some impressive white diamonds. One of them, a 28.84 carat white diamond, was recovered in 2019.

Dubbed the Argyle Octavia for its unique octahedral shape, the diamond is the largest white stone ever found at the Western Australian mine.

Image courtesy of Rio Tinto.

“We are delighted with this discovery which is a testament to the extraordinary Argyle orebody that continues to deliver these miracles of nature, even as it nears the end of mine life,” Arnaud Soirat, chief executive of Rio Tinto’s copper and diamonds portfolio, said at the time.

4. 12.8 carat light pink diamond

The largest pink diamond ever found in Australia is Rio Tinto’s Argyle Pink Jubilee. The 12.7 carat stone was recovered in 2012 and later cut and polished into a smaller 8.01 carat gem. The stone was then donated to Museums Victoria and put on display at the Melbourne Museum.

Argyle’s fame comes courtesy of the desirable pink diamonds it has produced. However, these extremely rare stones comprised less than 1 percent of its annual output (8 million carats on average).

Image courtesy of Museums Victoria.

Of the Argyle discoveries, diamond analyst Zimnisky’s most memorable is a red gem recovered in 2014.

“The 2.09 carat red that was cut into a heart shape and sold in 2014 comes to mind,” he said. “It’s such a unique diamond. It was sold to Moussaieff for 3.4 million pounds.”

5. 8.43 fancy yellow diamond

One of the country’s largest fancy yellow stones was recovered in 2017 by Gibb River Diamonds (ASX:GIB), which was examining the Blina project in the Ellendale diamond province.

The Ellendale mine’s unique composition has produced many rare stones, including three extraordinary green diamonds in 2007. The area was also once responsible for more than 50 percent of the world’s high-quality fancy yellow diamonds. The former owner, Kimberly Diamond Company, penned an exclusive offtake deal with Tiffany & Co (NYSE:TIF).

In 2015, the Ellendale mine was closed after producing roughly 1.3 million carats between 2002 and 2015. But exploration of the area has continued — a few years later, ahead of Argyle’s closure, the Australian government announced plans to give the once-abandoned Ellendale “a new lease on life.”

“It’s not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley,” said Bill Johnston, mines and petroleum minister. He also said that AU$230,000 would be spent to rehabilitate the site.

The plan paid off. In 2020, private explorer India Bore Diamond Holdings (IBDH) unearthed several small yellow diamonds with a special characteristic, fluorescence.

When exposed to ultraviolet light, the gems fluoresce purple. Glow-in-the-dark gems were once considered less desirable than other diamond classes due to their cloudiness and milkiness, but there has been a small shift in younger demographics who appreciate this unique quality.

Argyle’s 2019 pink diamond tender. Image courtesy of Rio Tinto.

“Violet or purple fluorescence is normally associated with blue diamonds, so the fluorescence of these IBDH diamonds is quite unusual,” said John Chapman of Delta Diamond Laboratory.

IBDH controls exploration leases for parts of Blina, while Gibb River held leases for the Ellendale mine site. The latter sold its Ellendale position to Burgundy Diamond Mines (ASX:BDM) in late March 2021. The deal will see Burgundy acquire ownership over the Ellendale mine and Blina project.

IBDH continues to hold mining leases for its L-channel deposit in the Ellendale diamond field, as well as exploration tenements.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.