The Argyle mine is in the East Kimberley region of Western Australia, 500 km (340 mi) southwest of Darwin and more than 2,200 km (1,400 mi) northeast of Perth. Systematic exploration began in 1969, following the discovery of a few alluvial diamonds in the area, but another decade of careful fieldwork passed before geologists recognized the host rock as a diamond-bearing lamproite pipe. Several more years were required to develop the site, and the mine became fully operational in late 1985. Over the next 25 years, mining was carried out from a large open pit. In the early years of the 21st century, recognition of the finite economic lifetime of this open pit led to feasibility studies of underground mining operations, which began in 2013.

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This decision has been made to end the life of the mine in 2020, with expected production of up to 20 million carats per year over the life of the underground mine. The output is dominated by near-colorless to brown diamonds, but from the beginning there has been a small but consistent supply of pinks, comprising less than 0.001% of the mine’s total annual production. This deposit supplies the best and most highly sought after pink diamonds in the marketplace, and no other source is known to produce pink diamonds of anywhere near the quality of Argyle.

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Potential Repercussions

 

Currently there is no other mine in existence that can replace the level of output the Argyle Mine has achieved over the last few years. This means that when the mine eventually does close, it will significantly affect the supply of coloured diamonds. No other mine on earth can boast a tender like the famous annual Argyle tender and the quality of their investment grade pink, red and violet diamonds is unparalleled.

Whilst there are other mines currently producing coloured diamonds, the growing cost of mining exploration is making it difficult for them to increase their output. It is also highly unlikely that new mines will be discovered any time soon due to the increasing time and resources it costs to excavate.

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What does this mean for Investors?

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​If you’re thinking about investing in coloured diamonds, then now is the ideal time to do it. There is a limited window of opportunity before the Argyle Mine closes and coloured diamonds will likely become increasingly scarce thereafter. The value of coloured diamonds as a whole has appreciated by over 100% in the last decade and is continue to rise year on year. This means that the potential for large scale returns on investment is very good indeed.