The world's largest uncut diamond is about to be sold in a most uncommon way.
The tennis ball-size gem -- a 1,109-carat white diamond discovered last fall in the Lucara mine in South Africa -- will be up for bid Wednesday evening in a public auction at Sotheby's in London.
Normally such stones are offered to a handful of sophisticated dealers in the diamond industry, who study the diamond for weeks to determine how many cut stones the rough will yield. After figuring how much those stones will be worth, they submit a sealed bid to the mining company.
The Sotheby's auction represents a break with tradition that aims to take advantage of wealthy individuals' desire for trophy objects, whether homes, art or jewels. Often they buy in ways that allow them to make the purchases anonymously.
The auction comes at a time when large cut diamonds have fetched record prices on the block: In May, the Oppenheimer Blue, a 14.62-carat stone that was said to have been the favorite of diamond millionaire Philip Oppenheimer -- whose family once owned the diamond mining company De Beers -- fetched a record $57.5 million at auction. That sale came a day after a 15.38-carat pink cut diamond fetched a price of $31.6 million.
"So why not stick with that strategy?" said William Lamb, chief executive of the Lucara Diamond Corp., explaining the decision to sell a rough stone under an auctioneer's hammer.
Underscoring the appeal of large stones, Lucara sold a rough diamond weighing 813 carats privately in May for $63 million, or a record of about $77,500 a carat.
But the diamond boom is a high-end phenomenon. Per-carat prices for smaller stones have been declining.
Prices for 1-carat polished stones have declined 4 percent in the last year because of a strengthening dollar and economic challenges faced by some of the pivotal consuming economies, noted Anish Aggarwal, a partner at Gemdax, a strategic consulting firm in the diamond industry.
To get the broadest possible exposure for Lucara's record-setting find, while still promising buyers anonymity if they desire it, Lamb has been working with Sotheby's and Julius Baer, a Swiss bank that has many wealthy private clients around the world.
The investment firm has invited some of its clients to view the stone. Lamb has also traveled to Dubai, Hong Kong and Singapore, as well as London, Paris and Antwerp, Belgium. Stopping in Asia is a logical choice, considering that last year Hong Kong tycoon Joseph Lau paid more than $48 million for a 12.03-carat stone for his 7-year-old daughter.
This is not the first time Sotheby's has put a rough stone up for sale. In 2000, it put a purple-pink rough 12.49-carat diamond up for auction, but it failed to sell, according to Sotheby's.
The Lucara diamond -- named the Lesedi La Rona, or "our light" in Setswana, in a contest in which 11,000 people submitted entries -- is not the biggest diamond ever found. That distinction goes to the 3,106-carat Cullinan diamond, discovered at a mine in Pretoria, South Africa, in 1905. It was named for Thomas Cullinan, the chairman of the mining company.
It was ultimately cut into nine discrete stones, of which the largest was the 530-carat Cullinan I, or Great Star of Africa.
Business on 06/28/2016