Rare Petra diamond may be destined for China buyer

Fri Feb 26, 2010 12:12pm EST

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* Diamond will be scrutinised for clarity, inclusions

* Sale price underlines strength of market for rare stones

By David Brough

LONDON, Feb 26 (Reuters Life!) - A 507-carat rough diamond which sold to a Hong Kong jewellery company for a world record $35.3 million on Friday could yield a large, unblemished polished gemstone for a super-wealthy Chinese collector.

Miner Petra Diamonds (PDL.L) sold the Cullinan Heritage diamond on tender in South Africa to Chow Tai Fook Jewellery Company Limited in Hong Kong, for the highest sale price ever achieved for a rough diamond.

The stone by far exceeded its pre-sale estimate, underlining the strength of the market for magnificent diamonds. Analysts had expected the stone, one of the biggest high-quality rough diamonds ever found, to command about $25 million.

"It's a very special gem. It will surely go to some form of jewellery," said Adonis Pouroulis, chairman of Petra.

"There was huge interest in the stone. A stone like this doesn't come around very often," he told Reuters.

The gemstone, recovered from Petra's Cullinan mine in South Africa, the origin of some of the world's most important diamonds, is the 19th largest gem diamond ever discovered.

CHINESE MARKET GROWING FAST

Jewellers said Chow Tai Fook Jewellery Company will likely find a buyer in China, one of the world's largest and fastest growing diamond markets.

"The next big market for rare diamonds will be China," said Marwan Chatila, owner of Chatila, a leading fine jeweller in London's exclusive Bond Street jewellery hub, which had been one of the bidders for the Cullinan Heritage.

"If the Chinese boom has legs, it will become very hard to find such diamonds. They will be sold there."

The Cullinan Heritage has potential to yield an exquisite, "D-flawless" clear polished stone of 170-180 carats, he said.

The finished stone would be far more valuable than the rough diamond.

Pouroulis said there had been no doubt that such a rare rough stone would sell for an exceptional price, even during an economic downturn.

"It's like a Van Gogh painting. It will always sell."

Marijan Dundek, a leading authority on gemstones who recently published a new edition of his book entitled "Diamonds", told Reuters that the rough stone could undergo months of examination to test its clarity.

"The key factors will be the clarity and whether there are any inclusions, and on this basis a decision will be made on how to cut the stone," he said.

AIM-listed Petra found the gem last September at its 74 percent owned Cullinan mine in South Africa, which it bought from the world's largest diamond producer De Beers in 2007.

The Cullinan mine has been the source of many large diamonds, including the world's largest rough diamond -- the Cullinan -- at 3,106 carats. That gem was cut into the Star of Africa stones that are now set in Britain's Crown Jewels.

(Reporting by David Brough; editing by Paul Casciato)

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