Coloured diamonds poised to appreciate significantly as supply dries up — broker

Diamonds are no longer just a girl’s best friend, according to one Vancouver rare gem broker.

Natural fancy coloured diamonds are the most concentrated form of wealth on earth, said Colin Ferguson, CEO of Rare Investment. And with demand growing while supply shrinks, they are on the verge of appreciating at a rate never seen before.

Most of the increasing demand is coming from Asia, particularly China and India, with the most popular gem being pink diamonds.

“The robust Chinese economy getting into the diamond world has been an absolute boon, and has put so much pressure on the price that they are starting to do what we refer to economies of rarity,” Ferguson told Business in Vancouver. “There’s high demand, low supply.

“Very soon it’s going to be high demand, no supply. Prices will skyrocket.”

Ferguson said the diminishing supply of diamonds has led to an “amazing increase” in investment potential for coloured diamonds.

“The big diamond mines in the world are starting to wind down. [Mining companies] have not found a tier 1 diamond mine since the early 90s that they can mine,” he said. “BHP Billiton, the biggest mining company in the world, just got out. They just can’t find any more diamond mines.

“Rio Tinto, the second-biggest mining company in the world, has spent billions trying to find more mines and couldn’t.”

Rare Investment displayed the 40-carat, $2.8 million Heart of Gold diamond at the Canadian Investor Conference in Vancouver June 1 and 2.