Earlier this year, the Argyle mine in the rugged outback of Western Australia held its annual Argyle pink diamond tender for 55 of the most precious pink stones to have emerged from the ground this year.

It followed a series of private views in Perth, Hong Kong, New York and, for the first time, Shanghai and Beijing.

An elite list of about 150 specialist coloured diamond jewellers were invited to private rooms in the various viewing locations and given a matter of hours to examine the stones.

They then had to submit a sealed envelope containing a price, in the knowledge the stones would be allocated to the highest bidder.

The Rio Tinto-owned Argyle mine claims to produce more than 90 per cent of the world’s pink diamonds and its supply is due to end in 2018.

Even if another mine was discovered, it would take a decade to get it up and running.

For every 1m carats of diamonds produced at the Argyle mine, only one carat is deemed suitable for sale at the pink diamond tender.

Titled Earth Magic, this year’s collection, showcased stones with a greater depth of colour than previously, including Argyle Mystra, a 2.02 carat stone with vivid purplish pink hues.

Accompanying the stones was an Argyle pink diamond tiara, designed by Asprey, mounted with 178 diamonds and valued at $1.5m.

“The experience of the Argyle tender is exhilarating and the highlight of our year,” says Australian John Calleija, a jeweller with boutiques in Sydney and Mayfair and clients who include Claudia Schiffer. “We know the success of our bids within 48 hours via a fax that starts with either a ‘congratulations’ or an ‘unfortunately’. To acquire one of these rare jewels is to acquire one of the most beautiful and rare gemstones in the whole world.”

This year, a book published by Argyle Pink Diamonds called Rare and Collectable, highlights both the preciousness and the proven investment potential of the stones.

“The book provides compelling metrics about an increasingly rare product in increasing demand,” says Josephine Archer, business manager of the company.

“Over the 25 years that Argyle has been producing …through economic cycles that have influenced most investment vehicles, pink diamonds have retained their value and, after adjusting for quality, tender prices have outperformed major equity indices. They have also consistently outperformed white diamond prices, at times commanding $1m per carat.”

A regular at the tender for 17 years, Mr Calleija is no stranger to being locked in a room alone with diamonds for two hours at a stretch.

But one year, as Argyle was showing its rarest and most prized pink jewel in the presence of journalists and film crews, he was in for a surprise. “It suddenly flicked out of the tweezers and into the media,” says Mr Calleija.

“Security went on full alert and all doors to the room were sealed. No one was allowed in or out for two hours while they searched for the rare gem. It was finally found in the cuffs of a cameraman’s trousers. There was a huge sigh of relief when it was found.”

In 2007, Mr Calleija missed out on a red stone called Lady in Red only to secure it from another bidder seven days later.

“It’s considered the deepest and most beautiful red in Argyle’s history. I sold it to a client for his 20th wedding anniversary. His wife now wears the £2m ring every day while riding the tractor on their farm,” says Mr Calleija.

In the 1980s, London jeweller Laurence Graff purchased the entire collection.

He used all the diamonds to create a brooch based on an 18th century Tremblant flower design. Hours after the jewel was complete, he sold it to the Sultan of Brunei.

But for diamonds at this level, is the tender the most efficient and profitable method of selling diamonds?

“The Argyle pink diamond tender is targeted at a group of collectors, connoisseurs and luxury retailers who understand the product and its market potential. It takes us a year to cut and polish these diamonds,” says Ms Archer.

“The remainder are sold throughout the year to a broader client base.”

While Mr Calleija believes the system is a “fair way for Argyle to distribute the diamonds worldwide”, Natacha Langerman, general manager of Antwerp-based Langerman Diamonds, says it is the seller who benefits most.

“A tender is the best method for the seller to sell his stones for the highest prices, but the buyer has to hike prices up to compete. But at the Argyle tender, you know every stone is exceptional,” says Ms Langerman.

Alisa Moussaieff, one of the world’s most confident buyers of precious and coloured diamonds, agrees. “Tenders are better for the seller,” she says, while acknowledging that Aryle will not produce pinks for much longer.

So what of that seemingly elusive invitee list? “Argyle, just like any other seller, is looking to widen its clientele and would accept anyone interested in spending money with them,” says Ms Langerman.

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