Tomorrow, Sotheby’s plans on auctioning off the ‘Lesedi La Rona’, the 1,109 carat rough diamond that was discovered by Canada-based Lucara Diamond Corporation in their Botswana diamond mine this past  year, in London. The 1,109 carat diamond is the largest diamond in history after the Cullinan diamond that was discovered in the early 1900s, whose resulting polished diamonds were gifted to the British crown jewels by their owner Sir Thomas Cullinan.  The diamond, now known as the ‘Lesedi La Rona’, is the largest gem quality rough diamond to be discovered in more than a century and is the largest diamond in existence today. Interestingly, it was originally published as a 1,111 carat diamond. Where did those 2 carats go? Perhaps it was polished up a bit to help buyers see its potential? Sotheby’s is expecting the diamond to fetch at least $70 million at auction next week, although according to our estimates it could earn even more.

The 1,109 carat rough ‘Lesedi La Rona’ diamond     Image credit: Lucara Diamond Corp.

Seeing as how this is the largest diamond to be discovered in over a century, it is exceedingly difficult to put a price estimate on it. In order to fully comprehend its impact on the world stage, we will have to look at how other large rough diamonds have behaved in the market lately. From other such diamonds’ prices we will be able to extrapolate. In the same week in November 2015 that Lucara discovered the 1,109 carat diamond, they also discovered an 813 carat and a 374 carat diamond. On May 9, Lucara sold the 813 carat diamond for $63 million to a company called Nemesis International DMCC. Lucara has retained a 10% stake in the diamond and will earn a share of the polished diamond’s final sale as well.

We looked into Nemesis International, considering that the company has a very interesting name and apparently considerable funds available. It seems that this company, based in Dubai, was only established in 2015. How can a company that was just established buy such a large diamond? We strongly suspect that this company is actually a front for a buyer or a group of buyers, possibly including a large brand name diamond company. This is not an uncommon practice as brand name companies try to keep themselves low key when making a diamond purchase so that prices are not artificially inflated due to any assumptions on the part of the sellers as to fund availability by such a large brand. The 813 carat diamond will most likely be cut into 2 major diamonds, both above 100 carats, at least. The fact is that without a brand name behind the diamond, the expensive purchase will not yield big enough returns for the buyers-turned-sellers. There needs to be a ‘story’, a ‘brand’ behind this diamond, in order to create real value. Maybe the unknown brand is De Grisigono?

Let’s discuss why.

In February of this year, Lucapa Diamond Company discovered a 404 carat rough diamond. In May, Swiss jeweler De Grisigono acquired the diamond for $16 million. They will be polishing the diamond, setting and selling it under their brand name, which they consider a huge privilege.

The 404 carat rough diamond     Image credit: Lucapa Diamond Company

The video by De Grisigono promoting the 404 carat rough stone

  De Grisigono revealed this information at this year’s Cannes Film Festival in May, inviting celebrity noise maker Kim Kardashian West to view the diamond in person, which she posted about on Instagram.

Kim Kardashion West and Fawaz Gruosi, the founder of De Grisigono, with the 404 carat diamond

It stands to reason that De Grisigono, who made such a big deal about a ‘mere’ 404 carat diamond, would also be set on acquiring the 813 carat diamond, the next largest diamond in existence on the market, or at least be the major brand behind its upcoming polishing and sale. The last time a brand created a ‘story’ behind a massive diamond was Graff Diamonds’ purchase in 2006 of the Lesotho Promise, a 603 carat rough diamond from the Letseng mine in the country of Lesotho. He purchased the diamond for $12.4 million and polished it into 26 diamonds, all of which he joined together on one spectacular diamond necklace.

The Lesotho Promise as a rough diamond and its 26 polished diamonds     Image credit: Graff Diamonds

The 813 carat ‘Constellation’ sold last month for $63 million, about $77,000 per carat. According to this calculation, the 1,109 carat diamond would be worth over $86 million. The only way that the polished diamond or diamonds will earn a premium over their price as a rough would be for the buyer to keep them together, much like Graff did with the Lesotho Promise or like what Sir Thomas Cullinan did with the Cullinan diamond. We don’t think the buyer of the Lesedi La Rona will wait years for it to appreciate in value, which is the usual tactic for colorless diamonds, but rather polish it and sell it as quickly as possible. Once the Lesedi La Rona is polished, its story will need to be continued as soon as possible, not lay dormant. Quite a few questions come to mind: why has the sale for the 813 carat rough done so quietly, when in reality its sale price of $63 million is the highest ever paid for any diamond or gem? maybe it is being used to further promote the 1109 carat rough, so its price will be much higher? why has it been announced recently that Lucara purchased an insurance for the diamond worth $120 million? what are we not being told?

The 1,109 carat Lesedi La Rona     Image credit: Lucara Diamond Corp.

Only 8 diamonds in existence are greater than 250 carats, and only 2 are greater than 500 carats. If the Lesedi La Rona is polished into a 500 carat diamond or greater, it will be the first diamond of such a size in a century.

Perhaps its new owner may decide to keep it in its rough form and decide to display it in museums around the world to be appreciated by all?

How much will the largest diamond in over a century earn at auction? How will the buyers treat it once it is bought? Will it be Nemesis International DMCC who will be the victorious buyer again? Speculate with us in the comments section below!