The closure of Argyle Diamonds will knock 10% off the annual world diamond output.
This is expected to help keep diamond prices higher and encourage new exploration.
Among the contenders to develop a new diamond source in Australia is Lucapa’s Little Spring Creek in Western Australia’s West Kimberley.
Sometime in the next few years Argyle Diamonds, Australia’s biggest diamond mine and the source of rare and prized fancy pink gems, will come to the end of its life.
The shutdown, and the loss of Argyle’s output of 14 million carats of diamonds a year, will cut world production by around 10% and is expected to create upward pressure on prices.
Argyle has been in operation since 1983, first as an open pit and then from 2013 as an underground operation, producing more than 95% of Australia’s diamonds.
At the end of 2017, the estimated ore reserve was 16 million tonnes, down from 29 million tonnes, a drop of 45% from a year earlier. That translates to 38.5 million recoverable carats, at a grade of 2.4 carats per tonne of ore.
At what point the mine becomes unprofitable depends on prices and costs.
“Shut-off criteria will be reviewed regularly against price, cost performance and demonstrated operational performance,” says owner Rio Tinto in its latest report. “The remaining reserves underpin the operation until 2020.”
The coming shutdown, and the subsequent impact on world supply and prices, hasn’t gone unnoticed. Many prospectors are looking for a new source.
Mid-January. By now, some of us have stopped going to the Gym (or realised we’re never actually going to go!) or fallen off our diet wagon or decided ‘Veganuary’ was a big step too far! But if your New Year’s resolution was to find a better investment for your hard earned cash, or to expand your current portfolio in new and exciting ways, then look no further – Argyle Bonds could have just the opportunity you’re looking for.
Entrepreneur and CEO of the Argyle Group, Rav Dhillon, says: ‘Our Investment Bonds are perfect for experienced investors who want to earn more from their savings. We’re currently busy meeting people up and down the country who have decided to start their New Year with a review of what their portfolio is earning them.’
The ethos at Argyle Bonds is clear on talking to Rav. The company is excited by the opportunities available via their brand new fixed income bond, and that excitement clearly translates over to their new Clients. ‘This isn’t just any old investment opportunity’ Rav explains ‘You’re helping us to buy a piece of history, something that will never happen again.’
Rav Dhillon’s Argyle Group consists of a number of companies all producing stunning bespoke pieces using the natural coloured pink diamonds found only in the Argyle Mine in Australia: and it won’t be producing them for very much longer.
The mine’s owners recently announced that due to rising costs they would discontinue mining operations in 2020, meaning a massive fall in the number of natural coloured diamonds available to the world from that point onwards, and already leading to a spike in demand and prices which is of course what Argyle Bonds was developed to take advantage of.
Rav continues ‘We want to raise £3 million pounds via this innovative corporate bonds issue to buy some of the last naturally available pink diamonds in the world. Using the other companies within the group, we’ll turn those diamonds into bespoke pieces of jewellery or collectors items in our unique Argyle Coins.’
So this New Year, when you’re considering your investment portfolio, make it a part of your resolution to consider investing in something so unique it will quite literally never happen again – an investment in a finite natural resource that’s already continually rising in value as a response to that fixed end date of its availability. In so much as there’s no sure thing in investment terms, in this instance, like the rare gems themselves, you have perfect clarity of knowledge upfront about what the outcome is likely to be.