The largest rough diamond discovered since 1905, the Sewelo of 1,758 carats, was revealed with great fanfare last April, named in July and then largely disappeared from view. Now it has resurfaced with a new owner, and it is not a name I can expect.
He is not, for example, Jeff Bezos, the richest man in the world, looking for a trophy. It is not a royal family looking for a centerpiece for a new tiara. It is not the De Beers Group, who could be seen as the creator of the diamond market and owner of the Millennium Star diamond, which, uncut, was a 770 carat stone.
He is not even the Graff diamond specialist, the owner of the Graff Lesedi La Rona, a 302.37 carat diamond that is the largest emerald-cut sparkler in the world.
It is Louis Vuitton, the luxury brand best known for its bags with the ornate logo that its mega gems, which has been present at Place Vendôme, the heart of the high jewelry market, for less than a decade.
And it’s the last sign, following the $ 16.2 billion purchase of Tiffany by the French giant LVMH (the parent company of Louis Vuitton) in November, that LVMH not only seeks to compete, but completely dominate the high jewelry market. Altogether, the double blow of purchase (brand and stone) in less than two months is the equivalent of luxury of shock and amazement.
“There are less than 10 people in the world who would know what to do with a stone like that or how to cut it and could put the money on the table to buy it,” said Marcel Pruwer, the former president of the Antwerp Diamond Exchange and the managing director of the International Economic Strategy advisory firm. “To buy and then sell what could be a $ 50 million stone, you need the technical qualifications, as well as the power to issue the check and take the risk.”
Michael Burke, executive director of Louis Vuitton, declined to say how much the company had spent on the stone, although he acknowledged that he was in the “millions” and that “some of my competitors, I think, will be surprised” that Vuitton was the buyer .
“Nobody expects us to emphasize so much the high jewelry,” said Burke. “I think it will spice things up a bit. Wake up the industry. “
According to Jeffrey Post, the curator in charge of gems and minerals at the Smithsonian Institution, “if you buy such a diamond, it gives you immediate credibility.” It is also, especially in the case of Sewelo, more risky than you can imagine
Discovering a gem
Discovered in April 2019 at the Karowe mine in Botswana (owned by Lucara Diamond Corp, a Canadian miner), the Sewelo, about the size of a baseball, is the second largest rough diamond ever extracted.
The biggest was 3,106.75 Cullinan Diamond, which was discovered in South Africa in 1905 and finally produced two huge high quality stones: one of 530.4 carats and another of 317.4, both now part of the jewels of the British crown, as well as many smaller stones.
Sewelo is also the largest rough diamond ever found in Botswana (a country that has become the son of responsible mining) and the third very large diamond discovered in Karowe.
The mine also produced the 813 carat constellation, discovered in 2015 and sold for $ 63 million to Nemesis International in Dubai, a diamond trading company (in association with the Swiss jeweler of Grisogono) and Lesedi La Rona, discovered in 2016 and sold to Graff for $ 53 million.
When Lucara held a competition to name Sewelo, 22,000 Botswana citizens sent registrations. “Sewelo” means “weird find” in Setswana.
However, unlike Constellation and Lesedi, it is covered with carbon (at this time it looks like a large lump of coal), which does exactly what kind of diamond material is inside a “mystery,” according to Ulrika D’Haenens. -Johansson, senior scientific researcher at the Gemological Institute of America.
It also makes “the risk much greater,” Pruwer said. When the stone was unearthed, there was a good amount of speculation that it may be worth significantly less than its not-so-giant brothers.
The profitability of any large stone depends on its performance: how many carats of gem quality can be taken out of it once cut to maximize the price, which in turn is a function of impurities in the stone, however, as Mrs. D ‘Haenens-Johansson points out that even impurities have value in a stone of this size. They can reveal when the diamond was created and at what depth in the earth.
The mine, which has examined the diamond through a small “window” on the dark deck and laser scanned, describes the stone as “near gem quality,” with “high quality white gem domains.” There are thousands of diamond gradations, ranging from D-flawless (the rarest) to industrial stones used in cutting and manufacturing.
“Is D or D impeccable, and how big is the perfect part? I don’t know, “said Burke, acknowledging that the purchase” required a bit of guts and confidence in our experience. “(To be fair, LVMH can afford it; its revenues in 2018 were 46.8 billion euros, or $ 52 billion. .)
Still, Mr. Post said: “You don’t buy a stone like that unless you have a plan for what you’re going to do with it and you think there is enough clear material to be able to cut it and make a profit. “
Embracing the risk
After all, along with the potential gains, LVMH also bought the less quantifiable, but palpable, boasting rights of diamond in an industry where mythology and romance are part of the price.
Mr. Burke said that when his team suggested that Vuitton consider buying the Sewelo, his initial reaction was: “What took you so long?”
“It is a large and unusual stone, which makes it our alley,” he said. It is also the first time that Vuitton buys a rough stone without having previously sold it to a customer. (According to Mr. Pruwer, most fine jewelers buy stones that are already cut and polished.)
“We are experimenting with a different way of bringing a stone to the market,” said Burke, who said that Vuitton would not cut the stone until he had a buyer, and that the company did not plan to hold on to the stone as a masterpiece, the way that Tiffany has maintained its homonymous stone of 128.54 carats.
Vuitton’s partners in Antwerp are building a scanner capable of seeing through the stone cladding, although with the image already in place, including a CT scan, they have estimated that it can produce a cushion-cut diamond of 904 carats, a oval of 891 carats or several stones between 100 and 300 carats.
Regarding the fact that the acquisition occurred almost at the same time as the acquisition of Tiffany, Mr. Burke said it was a coincidence. However, he acknowledged, with some underestimation, that LVMH “generally likes to become a leader in any field in which we enter.”
What if the Sewelo doesn’t prove to be as lucrative as LVMH is betting? “I’ll go jumping in a river,” said Burke.