Advanced Search

Graff Buys 478ct Letseng Gem for $18M

Dec 2, 2008 4:38 AM   By Avi Krawitz
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
RAPAPORT... Laurence Graff once again scooped the hottest diamond on the market, buying the 478-carat 'Leseli la Letseng' from Gem Diamonds. Graff bought the stone for $18.4 million through SAFDICO, the manufacturing arm of Graff Diamonds, outbidding six other diamantaires to secure the purchase, and proving he’s prepared to pay top dollar even in these market conditions. The diamond's selling price works out to an average of $38,400 per carat, Gem Diamonds reported, compared with a current global average diamond price of $90 per carat.
Leseli la Letseng.JPG
“To the best of our knowledge, this is the most valuable rough diamond ever to be sold,” Graff said. “This investment is indicative of our commitment to the diamond industry and our faith in the long-term value of diamonds.”

The Leseli la Letseng, or "Light of Letseng," the 20th-largest rough diamond ever mined, was recovered from Gem Diamonds’ Letseng mine in Lesotho in September. Gem Diamonds said at the time that the stone could yield a D-color flawless polished diamond weighing from 150 to 300 carats -- possibly the largest such stone since the production of the British Crown Jewels. Graff said SAFDICO is planning to produce “an exceptionally beautiful polished diamond of at least 200 carats.”

In the past two years, Letseng has yielded three of the 20 biggest diamonds in history; each has been bought by Graff. The 601-carat Lesotho Promise sold for $20,498 a carat in October 2006, and the 493-carat Letseng Legacy for $21,095 a carat in November 2007.

The sale comes as a welcome relief for Gem Diamonds. The company issued a profit warning in November in light of the dramatic decline in rough prices received on tender for diamonds mined at Letseng. Prices from Letseng dropped from $2,512 per carat in the first half of 2008, to $1,557 per carat in the third quarter, and were down to $1,382 a carat in October-November, Gem Diamonds reported on November 17. Fourth-quarter prices for Letseng’s diamonds are now averaging $2,139, the company reported after the Leseli sale.

David Butler, head of metals and mining at Cazenove Group, changed his  underlying earnings forecast for Gem Diamonds for 2008 from a loss of $16.2 million to a profit of $1.8 million. “[W]hilst there is uncertainty over the direction of diamond pricing...we believe that for the longer-term investor current levels remain an attractive entry point,” Butler said.

Gem Diamonds' shares rose 4.8 percent to 262 pence a share in Tuesday morning trade on the London Stock Exchange (LSE). They are down 77 percent from a year ago.

Graff expressed his long-term confidence in Gem Diamonds by buying an 8.2 percent stake in the company during September and October. A Gem Diamonds spokesperson stressed at the time that his interest in the company would not affect his participation in the company’s tenders, and that no supply partnership was currently in place between the two.

Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: Gem Diamonds, Graff, Lesotho, Letseng, Manufacturing, Production, Safdico, Tenders
Similar Articles
Fake green rough diamondGIA Exposes Rough Diamond’s Fake Green Color
Aug 19, 2019
Manufacturers coated a rough diamond with a green substance to imitate a natural color, the Gemological Institute of America
Diamonds at TendersLet’s Set Our Sights on the Auctions
Aug 07, 2019
De Beers’ first-half earnings highlighted the many challenges facing the diamond trade. But beyond the
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2019 by Martin Rapaport. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are TradeMarks of Martin Rapaport.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.