The highly anticipated auction of the largest gem-quality rough diamond in the world, the historic Type IIa 1,109-carat Lesedi La Rona unearthed by Canadian miner Lucara Diamond Corp. in Botswana last November, failed to make auction history as it fell short of its reserve price and did not sell at Sotheby’s June 29 auction in London. The bidding opened at $50 million and was widely anticipated to sell for upwards of $80 million, but the bidding stalled at $61 million, so the diamond went unsold. Rob Bates of JCK writes that, "The decision to sell a rough diamond outside of normal trade channels - presumably to attract collectors - was considered something of a gamble." William Lamb, CEO of Lucara, told JCK back in March that, “A 1,000 ct. stone that is D color is special and deserves to be treated differently than the normal goods that we sell.”
Lucara's website simply states that, "The Company will be retaining the exceptional 1,109 carat Type IIa Lesedi La Rona diamond as bidding did not meet the reserve price at the auction held this evening at Sotheby's in London." The Vancouver Sun talked to Lamb after the auction, writing that, "Lamb said while he was disappointed, the company now has a better understanding of how much value investors will place on the gem. 'We needed to assess whether there was a market where people who spend a hundred million dollars on a Picasso will actually see the value in a rough diamond,' said Lamb. He said Lucara and Sotheby's tried to reach the widest market possible, looking beyond diamond traders to wealthy individuals as it hosted a global tour in cities like Hong Kong, New York and Antwerp to promote the jewel." In a reaction to Fortune, Lamb reportedly said “The fact that the stone didn’t sell, yes, it is disappointing but it doesn’t change anything for Lucara as a company”. According to Fortune, the stone still is "up for grabs", stating that the company said there was interest from buyers in the diamond trade.
Diamond analyst Paul Zimnisky blames the Brexit: "I think it was definitely the referendum that passed in the U.K. When you look at the potential bidders of a stone that's close to a hundred million dollars, you know these are wealthy individuals and investors that have a lot of exposure to financial assets that sold off last week with that news." Lamb said there isn't enough information to make a true assessment how much the so-called Brexit vote influenced the low bids at the auction, but he acknowledged it may have been a factor. "It might have created a bit of uncertainty, a little bit of volatility, when people start to question whether it is going to have a major impact on the overall financials in maybe three to six months time," said Lamb. He said the diamond is now off the auction shelf but he has heard of interest from other private buyers. The Vancouver Sun reports that shares in Lucara (TSX:LUC) fell 57 cents or 14.5 per cent, closing at $3.35 on the Toronto Stock Exchange.
Sotheby’s said in a statement: “Every aspect of tonight’s auction was unprecedented: No one alive today has ever seen a gem-quality rough diamond of this incredible scale; no rough diamond of importance has ever before been offered before at public auction; and no diamond—polished or rough—has ever been estimated at this price level. It has been a privilege to present the Lesedi la Rona around the world this spring, and the unique opportunity excited collectors throughout this process.”