Super Rich Turn To Diamonds: Growth Outlook Sparkles

15 December 2010, Press Release

Unprecedented record prices for blue diamonds and important white stones at international auction houses are only the tip of the iceberg in the growing trend among the world’s super rich to buy large diamonds as safe and high growth investments.

“In recent months I’ve seen a significant increase in interest from the super rich in large diamonds” said Brian Menell, former De Beers executive, and former partner of De Beers in the Venetia Mine (South Africa’s largest diamond mine) through Anglovaal Mining (AVMIN). Menell recently co-founded a boutique advisory business to assist the ultra-rich with the purchase of important white or fancy coloured diamonds.

The claims come as auction houses in London, Hong Kong and Geneva report record prices for diamonds. Sotheby’s recently broke the world record for a diamond after a bidder paid $46 million for a rare pink in Geneva. And an anonymous buyer recently paid $20.5 million for a 14-carat diamond at Christie’s in Hong Kong.

Brian Menell said:

“Diamonds are not only a uniquely concentrated form of transportable value, but also have a very compelling investment outlook. Diamonds, especially white and fancy coloured stones, are rare and getting rarer. Many of the world’s large mines are old and production is flat or declining. Increasingly there are fewer new discoveries.

“As a result, there is no doubt in my mind that price appreciation of polished diamonds over the next 20 years will outpace that of the last 20 years by a factor of three or four times. On average I predict a 12-14% annual increase in the value of diamonds over the next few years given market conditions.

“At the top end of the market, the attractiveness of important diamonds as investments has been undermined by large retail margins – between 100 to 200% – on the one hand, and the hit and miss nature of buying at auction on the other.

“The uniqueness of each stone, and hence the requirement for expert valuation, and the reputation of the diamond industry for sharp practices, have also been deterrents. My team provides a blue chip, discreet, confidential and expert service that gives individuals making large diamond purchases complete comfort with respect to price, origin, and certification.

Menell added:

“Present demand at the super top end of the market appears to be largely from Russia and the Gulf, while Chinese and other Asian demand is growing fast. Perhaps the rich of Europe and the US are being left behind in the scramble for the world’s greatest gems.

“While my main business continues to be mining and energy projects in Africa, I love diamonds, and therefore assisting individuals to buy the right stone at the right price, regardless of whether they want it to adorn their wife or to hold in a vault, gives me great pleasure”.

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Notes to editors

Born in South Africa, Brian is part of the Menell family, which founded one of South Africa’s most successful mining and industrial conglomerates, the Anglovaal Group. At its peak the company employed 85,000 people and had a market capitalisation of $2.5bn.

Brian also has more than 20 years experience in both diamond mining and trading, having worked for the De Beers Group for eight years, been a partner in the Venetia Mine, South Africa’s largest diamond mine, and having developed a number of diamond exploration, mining and trading enterprises across Africa and Canada.

He presently serves as director for a number of African and Canadian mining companies and runs his own boutique diamond broker and advisory service for wealthy individuals.