Blue $25.6 Million Diamond Hints at Earth’s Origins: Commodities

Aug 13, 2014 10:14 am ET

Aug. 13 (Bloomberg) -- At the New York headquarters of Cora International LLC, Suzette Gomes is spellbound by a sight of rare beauty.

“You can’t describe that blue,” said Gomes, chief executive officer of the diamond-cutting company. “You just drown in it.”

“That blue” refers to the Blue Moon diamond. Cora paid $25.6 million for the uncut, 29.6-carat stone in February.

Colored diamonds are the world’s most expensive stones. A 14.82-carat orange diamond sold for $36 million at Christie’s International in Geneva in November, setting a record $2.4 million a carat. The same month, Sotheby’s sold the Pink Dream, a 59.6-carat pink stone, for $83 million.

Colored stones have become more popular in the past decade, according to Alan Bronstein, vice president of the New York- based Natural Color Diamond Association. He’s been buying, selling and analyzing the stones for 35 years. There’s no price index for them, in part because they’re so rare.

The Blue Moon may also provide clues about the forces at play deep within the Earth when the diamond was created at least a billion years ago, according to Jeffrey Post, curator of the National Gem and Mineral Collection at the Smithsonian Institution in Washington.

Ancient History

The blue is the result of boron traces that lodged inside blue diamonds as they formed about 100 miles (161 kilometers) underground. A geologist by trade, Post studies colored diamonds for clues about what contributes to the various shades, and where they come from. He’s examined about 25 to 30 blue diamonds, including the famed 45.52-carat Hope Diamond. Most offer few clues because they weigh less than a half-carat and their origins are unclear. The Blue Moon may yield better data.

“This will be one of the very few diamonds that are actually sizable, and that we know where it comes from,” he said in a phone interview.

Petra Diamonds Ltd. recovered the Blue Moon in January at the Cullinan mine in South Africa. The company also found a 26.6 carat rough blue diamond that yielded an internally flawless 7- carat polished stone that sold for $9.49 million in 2009. It unearthed a 122.5-carat blue diamond in June that will go on display next week for prospective buyers.

Coming in at 12 carats, Blue Moon is big, but no heavyweight in the world of luxury stones. It’s turning heads for its clarity, cut and kaleidoscopic hues of blue.

The family of colored diamonds -- technically known as fancy -- also includes reds, greens, yellows and other shades.

Museum Showcase

Rio Tinto Group, the world’s second-largest mining company, yesterday announced a tender for pink diamonds from its Argyle mine in Australia. Viewings will take place in Sydney, New York, Hong Kong and Perth.

“We have seen and continue to see sustained demand and price growth for Argyle pink diamonds,” Jean-Marc Lieberherr, Rio’s managing director for diamonds, said in a statement.

After six months of intricate cutting and polishing, closely held Cora will showcase the Blue Moon at the Natural History Museum of Los Angeles County starting Sept. 12.

After the exhibit closes in January, the stone may sell for “tens and tens and tens of millions of dollars,” said Gomes. The company has already received unsolicited calls from potential buyers.

“This stone, I would say, is the highlight of my career,” she said.

--With assistance from Thomas Biesheuvel in London.