A Look at the History and Milestones of the Famed Argyle Diamond Mine



The famed Argyle Diamond Mine has been publicly announced to be closing in 2020. So will a chapter in the geological record books. And the rare fancy colored diamonds for which it’s renowned may well become even more prized in the face of diminished supply.


When mining began at the Rio Tinto-owned Argyle mine in 1985, it marked the fruition of efforts to rethink diamonds and where they can be found.


Located on 124 acres in the remote Kimberly region in Australia’s state of Western Australia, it was discovered by geologist Ewen Tyler. Tyler’s explorations, beginning in 1972 were inspired by a professor who pointed out the similarity of lamproitic minerals found in Kimberly to those accompanying diamond discoveries in South Africa.


Most diamond mines exploit kimberlite volcanic pipe; lamproitic pipes had not proven to be commercially viable. By 1974, the explorations of Tyler’s joint venture team had uncovered indicator minerals in samples around Kimberly. Enlisting new investors, the group continued its explorations, determined to meet three key objectives to justify commercially viable mining: A diamond larger than a quarter of a carat; a diamond-bearing pipe; and a pipe with a high grade of diamond.


By the early 1980s, those objectives were largely met. Forty-nine lamproite pipes were discovered. A treatment plant recovered 92,000 diamonds. But their grade didn’t meet the venture’s standards. Exploration continued at eastern Kimberly’s Smoke Creek. And it wasn’t just indicator minerals for diamonds that were found, but whole diamonds – up to 15 per pan in certain areas of the creek. Full evaluation of the pipe signaled commercial viability.


By late 1985, open pit mining began and the Argyle mine skyrocketed into influence within the diamond industry and investment market. “What’s always set the Argyle apart has been the immense volumes it produced and the very rich grades,” explains Michael King, Director of Trading for Paragon International Wealth Management, which is a leader in acquiring and managing hard investment assets, with a specialty in fancy colored diamonds, particularly pink diamonds.


Even more notable, King added, is how it has become the world’s largest supplier of fancy colored diamonds – white, champagne, cognac, blue and the very rare and highly coveted pink diamonds. In fact, while Argyle’s production volume of pink and red diamonds is low, it’s the world’s only reliable source, producing 90 percent to 95 percent of the total.


The Argyle’s limited but consistent supply of unusual colored diamonds has helped drive the diamond market ever since. Also helping have been high profile auctions drawing attention to its most stunning diamonds through the years. King said that the auction of the Argyle’s Hancock Red in 1987 presaged the ongoing upward trend in the market when it garnered a record eight times its pre-sale estimate of almost $1 million per carat.


Leveraging its growing standing, the Argyle created innovative advertising and marketing campaigns. Its Tenders also added to its cachet. Launched in 1985, these invitation-only events have showcased the Argyle’s rarest colored diamonds, each offered up for sealed bids, with the highest bidder taking the prize. The number of diamonds in each year’s collection varies from year to year and the site of each viewing is kept secret until the very last minute. Over the last 15 years, the Argyle Pink diamonds sold at tender have appreciated by over 300 percent.


After over 30 years of producing some of the world’s most stunning colored diamonds, however, the Argyle is nearly played out. Its owner, Rio Tinto Mining plans to shut the mine in 2020. This leads to questions over the impact on the diamond market.


“There’s been some speculation that the closing, already moved back once, is a marketing ploy to keep prices stable, and there is potential of the mine closing earlier than Rio Tinto has announced.” said Paragon International Wealth Management’s King. “I don’t know about that, but I do know that no new mine has been found to fill the gap in the market that the Argyle closing would leave.”


He further noted that the Argyle Tender would also be discontinued, which would affect the investment market. “The closing of the Argyle will do more than just close an important chapter in geological record books,” King said. “It likely will trigger the law of supply and demand. Investors should think about this now as the upward pressure on values is only likely to grow in the coming.”