SINGAPORE: On Nov 16, 2015, the chief executive of Lucara Diamond William Lamb missed a phone call from his chief operating officer in Botswana at 1.28 am.
For anyone in the mining business, calls in the wee hours of the night usually mean bad news.
Although Mr Lamb returned the call with some trepidation, he need not have worried as he was greeted with a piece of amazing news that left his mind whirling. It was information that would carry great significance for his company, a relatively young diamond miner with only 12 years of history.
“Congratulations,” his chief operating officer Paul Day said. “You are the CEO of the first company in a 100 years to recover a stone over 1,000 carats.”
Fast forward four months, this 1,111-carat diamond - which has been named “Lasedi La Rona”, or “Our Light” in English - made its first-ever appearance on Thursday (Apr 7). The private unveiling for around 50 selected guests at The Ritz-Carlton Hotel in Singapore was the first stop of an exclusive roadshow that will see the gem travelling to 5 other cities before making a final pit-stop in London, where it will be put up for sale by auction house Sotheby’s on Jun 29.
When asked for a rough price estimate for the diamond, which measures 6.5 cm by 5.6 cm by 4 cm, Mr Lamb declined to reveal a specific figure, noting that his answer "would set a precedence" for bids to come. He did, however, confirm that the company had received offers of up to US$40 million for the uncut diamond. Earlier media reports citing comments from market experts said the diamond could fetch between US$40 million to US$60 million.
Lucara previously sold a 342-carat type IIa diamond discovered in April 2015 for US$20.55 million.
A "security entourage of very skilled people including ex-special forces and ex-military" have been deployed to safeguard the diamond in Singapore, Mr Lamb said. (Photo: Lucara Diamond)
Uncovered in Lucara’s Karowe mine located in central Botswana, the diamond is said to be the biggest stone found in more than 100 years, according to Mr Lamb. The “Lasedi La Rona” is also the world’s largest rough diamond in existence and the second-biggest diamond to be found across the globe. The biggest was the 3,106-carat "Cullinan Diamond" uncovered in South Africa in 1905, which was later cut into the "First Star of Africa” that now adorns one of the British crown jewels on display at the Tower of London.
According to the chief executive, the company is on the search for a new market with investors who will “consider a diamond not just as a storage of wealth, but as a thing of natural beauty as well”. Singapore, with its diverse mix of ultra high-net-worth individuals, was therefore chosen as the first stop for the gem to make its debut in its raw form. At the moment, almost all diamonds sold as jewellery are cut and polished.
“When we started looking around for alternative markets which could see and appreciate rough diamonds as a piece of art, Singapore is such a place," Mr Lamb told Channel NewsAsia in an exclusive interview on Apr 8.
In terms of where interest is coming from, Mr Lamb, who is also president of Lucara, noted "a mixture of people who reside here and Singaporeans.”
"DISCOVERY IS HUGELY SIGNIFICANT FOR US"
For the Vancouver-based miner founded in 2004, the discovery of the diamond, which Mr Lamb described as “a complete anomaly”, is a big deal for the young company whose history pales in comparison to bigger and more established players such as De Beers.
“Because we are a young company, we had to do a lot of work from an investment perspective. But the uncovering of the diamond has assisted us in the exposure we needed for investments,” he said.
The listed company is also hoping to use this newfound attention to better educate the world about the diamond mining industry, which Mr Lamb said has been misunderstood and “poorly portrayed by one movie”. The movie in question is the 2006 political war thriller “Blood Diamond” starring Leonardo DiCaprio, which revolved around conflict diamonds or illicitly mined stones that have been used to finance some of the most vicious wars in Africa.
“People don’t quite understand what diamond mining is, and one movie which was poorly portrayed doesn’t help,” he said. “They still think the process involves people standing knee-deep in muddy waters and sifting through rubble, but we actually have fully-automated machines at our mines and nobody on site gets to touch the diamonds. It’s not an inhumane process.”
According to Mr Lamb, Lucara is going one step further and using machinery called the Large Diamond Recovery XRT machines that aim to complete mining excavations more efficiently and “more environmentally-friendly with the use of less water and power”.
“There are ways to extract minerals economically and with emphasis on the environment. You might ask why aren’t people jumping on the bandwagon? Well, for a long time, players like De Beers control a large part of the production so people think the old way is the best way but there are opportunities for small companies like Lucara to be innovative,” he said.
“Mining has never had a good reputation but we think we now have the opportunity to educate (people) about the diamond sector,” Mr Lamb added.
President and chief executive William Lamb said the worldwide reaction the company received following the announcement of the discovery came as a surprise.
"We did not fully comprehend how viral the news would be. In two weeks, an estimated 1 billion people on the planet had received news of our diamond. It was absolute mayhem," he said. (Photo: Tang See Kit)
WHEN WILL DIAMOND SECTOR REGAIN SHINE?
The diamond sector had a torrid year last year on the back of a persistent supply glut and slowing demand, especially from China. Prices of polished and rough diamonds plunged 8 and 15 per cent, respectively, since the beginning of 2015, according to a report by Bain & Company.
Mr Lamb said the diamond industry has seen a “return of enthusiasm” of late, helping prices to rebound. However, this recovery may be short-lived on the back of unstable consumer demand.
“2015 has seen a lot of ups and downs; more big downs in fact. This year, we will see more ups and downs and until the (inventory) pipeline is cleared, volatility is here to stay. We estimate an 18-month period for a balance between supply and demand to be struck and by then, volatility will die itself out.”
However, there is still room for optimism given the glimmer of hope coming from a brightening of economic outlook among the world’s biggest buyers of diamond.
“We got strong numbers coming out of the US where the economy is starting to look better. China is starting to find a footing and I think we are now getting to a point of equilibrium. But where China has slowed down, India is fast making up for it and that makes me slightly more optimistic about the global economy,” Mr Lamb said.