Diamond the size of the Ritz found in South Africa: A $16 million rock

While a giant new stone may attract news glitter and interest, gems and gold are no longer the needed engines of South Africa's economy. 

A version of this post appeared on Africa in Transition. The views expressed are the author's own. 

Diamonds are associated with both South Africa and things glamorous. In South Africa the Cullinan Mine, east of Pretoria, is famous for diamonds of the huge variety, including the "Cullinan Diamond" -- which at 3,106 carets is the largest gem quality diamond ever found.

The Cullinan owner presented the giant stone to King Edward VII in 1905, and the Great Star of Africa, which was cut from it, sits in the scepter of the royal regalia used at the coronation of British monarchs. 

Now the British press is reporting that another huge diamond has just been mined at Cullinane. Though only 232 carets, the British media is estimating that it “could” be worth up to ten million pounds sterling, or $16,205,000.

Other estimates go as high as fifteen million pounds sterling.

Cullinan Mine is now owned by Petra Diamonds, a corporation registered in Jersey in the Channel Islands; its shares are traded on the London Stock Exchange. After the announcement of the big diamond, Petra's shares have risen about seven percent.

The Cullinan Mine was long owned by the diamond conglomerate de Beers, associated with the Oppenheimer family. In 2011, the Oppenheimers sold their 40 percent share in de Beers to Anglo-American, a giant mining company headquartered in London. Previously, de Beers had sold the Cullinan Mine to Petra Diamonds, a relatively new mining company.

Petra Diamonds is subject to the provisions of the South Africa's Broad Based Black Economic Empowerment (BBBEE) program. According to its website, Petra’s BBBEE partner is Thembinkosi Mining Investments, with a 14 percent share in the Cullinan Mine.

The report of the mining of a huge diamond may make a splash with the press. But mining as a whole is now only about 18 percent of South Africa’s gross domestic product, according to the CIA Factbook.

Drivers of economic growth now are not so much diamonds and gold as telecommunications (including cell phones), financial services, and real estate.