Yellow Diamonds - A Gap in the Diamond market.

Yellow Diamonds - A Gap in the Diamond market.

Almost 25 years ago, I fell in love with the Fancy Yellow Diamond.  A colleague introduced me to the hobby of selling diamonds in 1994, and I met some fascinating people in that part of my life.  There was this dealer in Melbourne (who later past away with cancer), who was a nice person, introduced me to these fancy yellow stones and I have never forgotten them.

The Vivid Yellow, a pear-shaped fancy vivid yellow diamond of 32.77cts with an estimated value of $US6 to 8 million, is coming up for auction. Photo: Christie’s Images

As you can see in the picture above, what is there not to like.  The colour is so enticing.  My fascination or obsession with yellow diamonds is the colour, the intense and consistent colouring that creates beauty over a colourless stone.  This fascination is more than cosmetic.  It is the fact that in nature, the act of having inclusion of nitrogen in the crystal structure created what we would call a defect. A defect in the crystal structure that was so consistent that it created a work of such beauty.

Some Samso fact on Diamonds?

To understand a Yellow diamond, one needs to follow some minor things. Diamonds are not stable at normal temperature and pressures. Normal as in on your finger.  On your finger, your diamond is technically turning to graphite/carbon.  It will take a long time to do that, but what you are wearing is technically a defect item :-).  There is no shortage of diamonds, but with a tight marketing system, prices are kept at enterprising values.  This system is a win-win system.

Natural diamonds come in all sort of shapes and sizes.  They also come in different chemistry. Clear white stones are traditionally the most sought after diamonds (Figure 1).  While there are differences in colour between D, E, and F diamonds, they can be detected only by a gemologist in side by side comparisons, and rarely by the untrained eye.  Remember this statement when you go and buy your diamond cause while they look similar, the pricing from a D to an F is dramatically different.

Figure 1:  Diamond colour grades from the Gemological Institute of America. (Source:  GIA)

Most retail diamond “experts” will tell you that when buying a good diamond, the clarity (Figure 2) is essential.  They are correct, but a stone that has an IF (Internally Flawless) Clarity with G Colour may be just as excellent but cheaper than a D and IF.  Those that tell you that you should buy it for investment need their head examined.  The only value diamond rings hold sentimental value.  I am sure all jewellers out there will disagree with me, but unfortunately, that is the truth, and those people that have tried to sell their rings will attest to that statement.

Figure 2:  Diamond Clarity Chart. (Source: Cologemlabs)

For me, the beauty of the stone, the setting and the story of the stone or the story of the occasion are what determines a buy.  The photo of the ring below was purchased because it was a stone from Blina, a known diamond project that has ceased operation.  In my opinion, that history of the stone set in a ring gives more added value that a stone that has no source history.

A rough diamond Blina yellow diamond and a ring that is set in an “antique in nature”.

Fancy Yellow Diamonds

Yellow diamonds are deemed “fancy” when a stone displays more colour than the “Z” colour grade based on the GIA D-Z colour grade scale. Why? Because it makes more sense, and really, all diamonds should be graded for their face up colour. But it is much harder to do.  It is when they are in the Fancy range where they gain their value. Fancy is the term that describes the intensity of the colour and the price for these stones will tend to rise rapidly.  The Fancy Yellows are “rare”, and consistent Fancy colour is hard to find. I mean a naturally sourced stone.

Figure 3: Colour Diamond Chart. (Source: Halloway Diamonds)

Yellow diamonds are the second most common colour after brown diamonds.  Argyle Diamond Mine was the first to market the brown diamonds as Cognac and Champagne diamonds.  This marketing strategy was very effective in that it created the market for unwanted brown diamonds or non-gem quality stones.  When I see some of these stones, they are bringing a new perspective to the market that is just traditionally one type, one colour and one style of appreciation.

 

Champaign and Cognac diamonds. (Source: Naturally Coloured Stones)

The Fancy Yellow diamond marketability is strong.  When Tiffany, the jeweller, did an off-take with Ellendale Diamond Mine (not closed), they were reported to have paid up to $3,000 per carat for the fancy yellows coming out from the mine.  That is an indication of the demand for these stones.  Stones such as the one described below, the 34.17-carat yellow diamond, that is sourced from the Yakutia Region of Siberia, Russia, would have been worth a lot of money.

Yellow Diamond Crystal: Almazy Anabara, an affiliate company of ALROSA, discovered this 34.17-carat yellow diamond crystal at its Ebelyakh alluvial deposit in the Yakutia Region of Siberia, Russia. It measures 20.17 x 19.65 x 15.1 millimetres in size. ALROSA is the world’s largest producer of diamonds based on weight.  Photograph by ALROSA (Sourced:  Geology.com)

 

Where do we find these Yellow diamonds?

As we mentioned earlier, yellows are not rare. They are plentiful.  I wished I had taken a photographed the stones that were shown to me by the dealer in Melbourne in the mid-1990s.  The internet tells me that yellow diamonds are found primarily in Africa, including Angola, Central Africa, Congo, and Sierra Leone, but has also been discovered in Brazil, Australia, and Borneo.

The Ellendale mine when it was operating supplied nearly 50% of the world supply.  The mine is no longer in operation.  My interest lies in the existing sources that are in Australia.  The Blina project and potentially looking at the Ellendale alluvials and pipes is exciting.  Companies such as Gibb River Diamonds (ASX: GIB) are active, but they are struggling to find funding.  The theory sounds great, and if proven to be accurate, you are going to see some exceptional stones.  A consistent supply of these yellow stones would be a valuable asset.  The old saying of One in a million, well finding a source of quality yellow stones in Australia would be one in a million.

There have been several companies in the last eight years that are floating in the space of chasing the Ellendale and Blina alluvials.  I have not heard much about them. However, I did recently hear that some private company has picked up the Smoke Creek Alluvials. I looked at buying that project from the vendors three to four years ago.  The Smoke Creek alluvials have a resource, and this project holds some potential bonuses.  The likely discovery of the Argyl pink diamonds.

Ellendale Diamond Mine. (Source DMP)

I am sure that within the package od stones, there will be an abundant amount of browns as well.  In all the potentials out there, I am most optimistic with those that are trying to develop projects within the Ellendale and Blina diamond projects.  These are where the potential for discovering Fancy Yellows are the greatest and has the most history.  As they say, where there is smoke, there must be a fire.  At least a fire that potentially can be started.

 

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