Soon to come – Investing in Colored Diamonds through Stocks
June 6th, 2013 by Noam Flint
On our diamond investment guide we explored the major options to invest in diamonds:
- Buying loose diamonds directly – investment grade diamonds
- Buying an ETF such as GEMS by FactorShares
- Buying stocks related to the diamond industry, whether through retailers such as Tiffany and BlueNile or mining companies such as Rio Tinto, BHP Billiton and Petra (which recently discovered and sell a 25 carat rough blue diamond for $17,000,000).
We have also elaborated on the great advantages we find to specifically invest in colored diamonds. However, the only way to invest in colored diamonds is to buy the diamonds themselves – or is it…?
Economy runs in cycles. During blooming years businesses tend to expand.
However at difficult times they tend to shrink to their core activities.
Same goes for the largest companies. Companies such as the 120 Billion Dollars Rio Tinto mining group.
Rio Tinto is one of the largest mining companies on earth. Second to BHP Billiton.
Back in March of 2012, Rio announced that they consider selling their diamond mining activity. This giant division which is worth billions of dollars and includes some of the world most famous diamond mines is like a needle in the haystack for this huge company.
A year has gone by since the announcement and it seems that Rio couldn’t find a suitable buyer for this division and now, according to Bloomberg, they consider an IPO.
For those who are unaware, the meaning of this step is to sell a portion of the company to the public – thus allowing the public to invest directly in their diamond mining businesses.
What makes this IPO special for colored diamonds lovers out there is the fact that among the diamond mines that Rio owns there is the amazing Argyle Diamond Mine.
A mine that is responsible for a huge portion of the colored diamonds that are discovered each year, especially for the rare pink diamonds that are available on the market.
A collection of pink diamonds from the Argyle Diamond mine.
From left to right: Intense Pink, Intense Orangy Pink and Intense Purplish Pink
While we do not know how much of the 2 Billion Dollars diamond activity the Argyle mine and its colored diamonds take, at the moment, it seems like it is the closest way to buy stocks related to color diamonds.
But on the other hand…
What would you prefer, a stock or one of the beautiful pinks above???
