How do you cut a massive, 404-carat diamond?

Soon after a 404-carat diamond was discovered in Angola’s Lulo mine, a Dubai-based consortium—Nemesis International DMCC—contacted the state-owned miner Endiama and bought the rough stone wholesale. “When the discovery was announced, they were getting calls from China trying to buy it,” said Nikolas Polka, chief executive officer of Nemesis. But once he’d successfully acquired the stone, there was still the question of what to do with it. So Polka turned to Fawaz Gruosi, the founder and creative director of De Grisogono, a Geneva-based jeweler.

Gruosi’s plans remained open-ended and would stay that way until he’d made some preliminary, exploratory cuts. “What are we going to do with this big diamond?” he pondered as he sat at a desk on the second floor of his New York boutique. Wearing a trim blue suit, blue shirt, and blue tie, Gruosi puffed on a cigarette and leaned back in his chair. “You don’t find these things every day.”

Gruosi’s company, though, encounters diamonds almost like it fairly often, or at least often enough that Polka and his group felt comfortable entrusting their considerable investment to Di Grisogono’s care. Founded in 1993, the jeweler is known for its lavish, large-scale settings: Gruosi said the average price of his stock ranges from $40,000 to $400,000. “For us, that’s midrange,” he said, shrugging.

But despite advancements in 3D-imaging technology, both Gruosi and Polka were unsure of how they should cut the diamond, or even what they’d find once they made the first incision. “We bought it a little bit as a crapshoot,” Polka said. “So what we’ll do is cleave off the ends, and that will give us a view into the stone.” Next, they planned to cut several windows at different angles “to plot the imperfections,” Polka explained. After that, they’d use a computer to assess imperfections and plot the optimal series of cuts.

Some of their cutting strategy involved commercial considerations—a buyer might pay more for one of the largest diamonds in the world than he would for four reasonably large pieces, or another person might prefer two giant pendants. But Gruosi said he wasn’t really worried about cutting the stone down too far. “To have, say, two 80-carat pendants, a perfect match, is basically impossible to find on the market,” he said. “Even the No. 1 jeweler in the world today would have a problem finding something like that.” In other words, Gruosi was confident that whatever he makes, someone will buy.

Polka, who was more explicitly concerned about those commercial considerations, was unwilling to put a price on what the stone would go for when it’s eventually sold, but noted that recent auctions had seen sales “for more than $200,000 a carat—it could even be more than that.” When reminded of the recent slump in the diamond market—the conversation occurred a few days before a $70 million diamond failed to sell at auction—Polka remained undeterred. “Listen,” he said. “If you look at the exceptional diamonds and the prices they’ve gotten in the last few months, you’ll see that exceptional diamonds command exceptional prices.”

Just how exceptional this diamond is remains to be seen. After the first cuts, Gruosi will spend several weeks imaging the diamond and then make more incisions. According to Gruosi and Polka, after a three- or four-month-long process, plus a review by the Gemological Institute of America, the diamond—or diamonds—will be polished, set, and ready for sale by the end of this year.