Wednesday, June 7, 2023

Who will finally own Botswana’s newly discovered exceptional diamond?

South Africa’s celebrated Cullinan Diamond is the largest diamond ever found. Weighing 3,106 metric carats in its rough state and measuring over 10cm in length, it is notable for its size, its extraordinary blue-white colour and exceptional purity.

After the historic finding, the huge carat diamond, found near Pretoria in South Africa, made its way into the British Royal palace after a rare and eventful journey through Europe. The Cullinan was discovered in January, 1905 at the Premier Mine in South Africa and named after the chairman of the mining company, Thomas Cullinan. In November 1907 it was formally presented to King Edward VII as a token of loyalty.

Historical records show that the gift did not include the cost of cutting the stone and it was decided that this huge task should be entrusted to the celebrated diamond cutting firm of I.J. Asscher of Amsterdam. A painstaking eight months of work on the diamond began in February 1908, when it was split by Joseph Asscher, and then cut, ground and polished by three polishers working 14 hour days. The result was nine principal numbered stones, 96 small brilliants and nine carats of unpolished fragments.

British newspaper, The Telegraph recalled in its  19 November 2015 edition that after Winston Churchill finally managed to persuade King Edward VII to accept the stone, in what was a very tense period following the end of the Second Boer War, authorities were faced with the dilemma of how to get it to London.

It is said that London policemen took a steamboat to South Africa to bring back the huge diamond. However, aware of criminal plots to stage an audacious robbery, they used the steamer as a diversion. They carried a fake stone in the steam boat and sent the actual diamond in a plain box via registered parcel post. The Cullinan was cut to form the Great Star of Africa and the Lesser Star of Africa, which are set in the Crown Jewels. Churchill was given a replica for his efforts, which he displayed proudly.


This past week, Botswana made a similar recovery joining countries such as South Africa, Lesotho and Sierra Lone which are renowned for their ‘large diamond’ discoveries. Lucara’s Karowe mine in Botswana has now cemented itself as an arch rival of Gem Diamonds’ Letseng operations in Lesotho in being a source of the world’s biggest and best stones.


On Friday, Lucara executives in Gaborone said it had discovered a 1,111 carat gem at its Karowe mine in Botswana, the largest found in more than a century. The stone, which measures 65mm x 56mm x 40mm, is second in size only to the Cullinan.

Already, Lucara executives are inundated with inquiries from potential high profile buyers who are asking about the price of the stone. However, Lucara executives said it was impossible to price the diamond at this stage as the stone is yet to be valued.

Lucara’s Chief Operational Officer, Paul Day said Friday that the diamond is so big that they cannot use the local scanner to check its colour and clarity; and will have to be taken to Antwerp for proper assessment. Antwerp and New York are the leading cutting centres for exceptional gems.


Given the value, and issues of security surrounding the precious stone, Lucara executives in Gaborone told Sunday Standard that the company has since stepped up security and has even relocated the stone, almost a size of a tennis ball from the mine to a more secure place. The company remains confident that the 1,111 carat diamond will safely make its way to Antwerp for valuation. As such, given the need to first value the stone, the cutting, polishing and eventual sale to a final owner may not happen as quickly as many may think. Another delay could be brought by the fact that on Thursday, Lucara recovered two other “exceptional” white diamonds – an 813-carat stone and a 374-carat stone. Experts therefore argue that it is unlikely that Lucara will put all the three gem stones on the auction market. The projection is that the latest two recoveries will be sold first.


But even before the valuation of Botswana’s largest stone, speculation is rife as to who will ultimately buy this new recovery.

Martin Potts, a London-based mining analyst at FinnCap Ltd, suggest that the end-buyer will likely be an ultra-ultra high-net-worth diamond collector. His argument is supported by a notion that there is huge prestige in owning the largest diamond that’s not part of a royal collection. The concerned diamond was recovered at Karowe mine near Letlhakane in Boteti District. Construction of the said mine commenced in November 2010 and reached full production in the third quarter (Q2) 2012. In 2014, the mine produced 430,293 carats of diamonds. Three years into production the mine continues to produce exceptional stones that have brought smiles to the faces of shareholders. 


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