Rio Tinto Reveals New Marketing Scheme at Annual Pink Tender

Rio Tinto Diamonds is re-launching the pink diamond brand and starting a new distribution strategy to be formally announced later in the year, the mining company told IDEX Online on the sidelines of the Hong Kong Jewellery and Watch Fair.

Under the new scheme, 15 authorized partners will be selected to receive polished pink diamonds directly from the mine. A number of Select Ateliers will also be chosen. These jewelers will be able to use the Rio Tinto brand but will not be able to buy directly from the mine.

Rio Tinoto is placing reserve prices at this year's pink diamond tender for the first time

Rio Tinto is going to work closely with the Select Ateliers to design special pieces of fine jewelry incorporating Argyle pink diamonds. Argyle Pink Diamonds Sales and Marketing Manager Josephine Archer noted that the idea behind the new scheme is for Rio Tinto to maintain the chain of custody, much like it does with the Select Diamantaires program.

“We are maximizing the opportunity of taking this fine product and doing justice to it in its final decade,” Archer said, noting that its Argyle mine is only expected to have an additional life span of 10 years.

Rio Tinto Diamonds only expects to find around 600 tender quality stones in Argyle as it moves the Western Australian mine underground.

“As production moves underground, the production will decline to around 50 percent of historical volumes from the mine,” said Archer. However, to counterbalance any reduction in size, Archer noted that the color of the diamonds is just as strong, if not better, than in past tenders.

As the Argyle mine is only expected to continue production until 2018 the 65 stones in this 24th annual diamond tender represented a significant proportion of the mine’s quality output.

“It feels like the tipping point for pink diamonds,” Archer said. “Pink diamonds were the best kept secret, but now they are being increasingly understood and appreciated. Even taking into account a significant price increase earlier in the year, and interestingly, even in the face of the current economic environment, there has been an increase in real appreciation for them.”

This year’s tender showcases 62.64 carats of diamonds sold in 64 lots; two diamonds are being sold as a pair for the first time. Highlights from the tender include a 1.33 carat flawless purple pink SI2 heart. Argyle pinks are generally quite small in size, most under 1 carat. This makes the largest stone – a round 3 carat fancy intense pink I1 – all the more sought after.

For the first time, Rio Tinto has placed reserves on the diamonds. If they fail to reach the reserve price, Rio Tinto will either hold on to the diamonds in their inventory, or negotiate with the highest bidder to reach a mutually acceptable price. 

The Rio Tinto Diamonds Argyle Pink Tender takes place in Perth, New York, London, Hong Kong, Tokyo and Sydney. Final bids must be received by midnight in Perth on October 5. 

Pink diamonds were first recovered from the Argyle mine in 1985. For every million carats of rough diamonds produced at Argyle, less than 1 carat will be suitable for the tender.