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Wed 14 Nov 2012 10:51 AM

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Flawless diamond fetches $21.5m at auction

Archduke Joseph diamond from Golconda mine sold at auction, says Christie's

Flawless diamond fetches $21.5m at auction
Archduke Joseph.

A huge, internally flawless diamond from India's fabled Golconda mines was sold at auction in Geneva on Tuesday night for a record CHF20.355m (US$21.48m), Christie's said.

The rare, colourless stone weighing 76.02 carats, and roughly the size of a large strawberry, once belonged to Archduke Joseph August of Austria (1872-1962), a prince of the Hungarian line of the Habsburgs.

Its pre-sale estimate was CHF15m-to-CHF25m and it fetched more than double the price paid for it at auction almost two decades ago.

"It is a world record for a Golconda diamond and a world record price per carat for a colorless diamond," Francois Curiel, director of the international jewelry department at Christie's, told reporters.

The previous record was held by the "Beau Sancy", a pear-shaped diamond of 34.98 carats, sold by rival Sotheby's for CHF9m francs last May.

"The market is not on the best form at the moment. The sale tonight was almost flabbergasting," Curiel said.

He added that the buyer, who bid by telephone, wished to remain anonymous, but said the last bidder to drop out of the sale was Fred Mouawad, an international dealer with offices in Dubai, the Middle East and Geneva.

The seller was Black, Starr & Frost, an American jeweler founded in 1810 and based in California.

"My understanding is that this stone is going to a museum and it will probably be the centerpiece," Black, Starr & Frost's chairman Alfredo Molina told Reuters in the Geneva saleroom.

Diamonds and gemstones are a safe refuge for investors in difficult economic times, he said. "There is a crisis and people don't trust governments and banks. Paper money is a depreciating asset," he added.

The diamond was the star lot at Christie's semi-annual jewelry sale in Geneva, which fetched CHF76.6m, with 290 of 348 lots sold.

Nineteen lots went for more than US$1m each, the auction house said in a statement. They included a brooch with a Ceylon sapphire weighing 60.44 carats, surrounded by diamonds, that went for CHF1.7m, more than three times its estimate.

The bidding for the Archduke Joseph diamond opened at CHF8m but the price swiftly rose amid heated telephone bidding.

Historical diamonds originating in the Golconda mines, virtually exhausted by the 18th century, include the Koh-i-Noor, now in the British crown jewels, and the blue Hope Diamond, part of the Smithsonian Institute in Washington, DC.

"The Archduke Joseph Diamond is the finest and largest perfect Golconda diamond ever to appear at auction. It is comparable in its noble lineage and superb quality to the legendary Koh-i-Noor," Rahul Kadakia, head of Christie's jewelry for the Americas and Switzerland, said in a statement.

In 1933, records show the Archduke deposited the stone in the vault of the Hungarian General Credit Bank.

"Three years later it was sold to a European banker, and kept in France, locked away in a safe deposit box, where fortunately it remained undiscovered during World War Two," the auction house said.

Decades later it surfaced at auction in 1961 and again at Christie's in November 1993, netting CHF9.7m, equivalent to US$6.5m at the time, the auction house said.

The stone was subsequently "slightly recut". Christie's is privately held by French billionaire Francois Pinault.