- Bid of $61 million didn’t meet minimum price set for auction
- 1,109-carat diamond was unearthed at Lucara mine in Botswana
The price tag for the biggest diamond found in more than 100 years proved too rich for even the deepest wallets at an auction in London.
The 1,109-carat diamond that’s called Lesedi la Rona, or “our light” in the Tswana language spoken in Botswana where it was found, was expected to sell for about $86 million, based on a diamond sale in May. That would have made it the most expensive rough gem on record. Instead, the highest bid of $61 million didn’t clear the so-called reserve price at a Sotheby’s auction on Wednesday night, leaving it unsold.
“Sotheby’s orchestrated a worldwide marketing campaign that garnered huge levels of interest, but the auction just seemed to stall,” Edward Sterck, an analyst with BMO Capital Markets in London, said in a research note Wednesday. It’s unclear what happens next, he said. “We would see the potential for a private sale,” possibly with an agreement where Lucara retains some interest in the upside from the polished stones, Sterck said.
The massive diamond was unearthed at Lucara Diamond Corp.’s Karowe mine in Botswana. The Vancouver-based company is gaining a reputation for producing the world’s biggest and best stones and sold an 813-carat diamond for $63 million in May, a record, to Nemesis International DMCC, a Dubai-based rough-diamond trading company.
Lucara’s sale of The Constellation in May was worth about $77,500 a carat, based on the final price. Applying the same dollar per carat implied a floor price of $86 million for the Lesedi la Rona.
“The company will be retaining the exceptional 1,109 carat Type IIa Lesedi La Rona diamond as bidding did not meet the reserve price,” Lucara Chief Executive Officer William Lamb said Wednesday in a statement.
Lucara fell as much as 18 percent in Toronto after the failed sale, the biggest intraday decline since September 2013. The shares were down 15 percent to C$3.35 by the close.
The Lesedi la Rona, just smaller than a tennis ball, is second in size only to the Cullinan, a 3,106-carat gem found near Pretoria in South Africa in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels of Britain.
The world’s biggest and rarest diamonds had proven more resilient than smaller rough stones -- what mined gems are called before they’re cut and polished. Prices for rough diamonds slumped 18 percent last year, the most since the financial crisis in 2008, amid lower demand and an industrywide credit crunch.
The diamond auction took place during a week of contemporary art sales in the U.K. On Tuesday, Sotheby’s sold 52.2 million pounds ($70 million) of art as Asian and U.S. collectors went shopping, taking advantage of the drop in sterling after Britain voted to exit the European Union.