Supply and Demand
Huge opportunity for long-term gains
The supply of pink diamonds is getting low as the Argyle mine that is producing these precious gems is nearing the end of its shelf life. It’s also important to note that the current demand for rare coloured pink diamonds far outweighs the global supply. Because of this supply-demand imbalance, prices for rare coloured pink diamonds will increase substantially, providing a huge gain for medium-term and long-term investors.
High Demand, Low Supply
Emerging markets like China and India are key driving factors in the supply-demand imbalance. Experts forecast that by 2020, the global diamond demand will outstrip its supply! It is estimated that the demand will grow by 5.9% each year as investors from China and India join the crowd.
Supply, on the other hand, is only expected to lower every year. With no new mine discovered since 1986 and no stable supply to feed the demand, the supply-demand gap will only continue to widen over the next few years. And as a result, the prices of rare coloured pink diamonds will go nowhere but up!
Rare Pink Diamonds are Beyond Rare
Argyle Pink Diamonds are so rare that only a handful of stones are polished every year. These rarest of the rare coloured diamonds are mined at Rio Tinto’s Argyle Diamond Mine in the east Kimberley Region of Western Australia. 95% of the world’s pink diamonds are mined here.
Aside from pink diamonds, Rio Tinto’s Argyle Diamond Mine also holds the monopoly of violet, red, and champagne coloured diamonds.
Rio Tinto’s Argyle Diamond Mine is set to end its operations by early 2021, plunging the entire world into a supply drought. Even on the very unlikely chance there was a new mine discovered to replace this unique resource, it would take about 15 years before it becomes fully operational.
While this sounds like a problem to most, it’s a lucrative opportunity for astute investors to make huge returns in the medium-term.