Rare blue diamond found in South African mine

The 29.6 carat diamond has been valued at around $20m

This handout picture released by the Petra Diamonds company website on January 21, 2014 and taken on January 18, 2014 shows a 29,6 carat blue diamond, worth several million dollars, which was found in January 2014 in the Cullinan mine near Pretoria. (AFP)

An "exceptional" acorn-sized 29.6 carat diamond has been discovered in a South African mine, making it one of the rarest and most coveted in the world.

The Cullinan mine near Pretoria, owned by Petra Diamonds since 2008, was also where the Cullinan Diamond was found in 1905 - described as the largest rough gem diamond ever recovered and weighing 3,106 carats.

In 2013, a 25.5 carat Cullinan blue diamond was also discovered in the mine and went on to sell for $16.9 million (£10.3 million).

Petra Chief Executive Johan Dippenaar said the latest blue diamond discovery could be the most significant stone they have ever recovered, "by some margin".

"The stones in the last year or so are selling well above $2 million per carat", he added. "That's not my quote, that's updates in the market."

Analyst Cailey Barker at brokers Numis estimated the diamond could fetch between $15 million (£9 million) and $20 million (12.3million) at auction.

Diamonds from both the Cullinan mine in South Africa and the Williamson facilities in Tanzania, both owned by Petra, have been displayed at London's Buckingham Palace and are considered to be among the rarest and most valuable in the world.

The 1905 Cullinan Diamond has been cut into two stones - the First Star of Africa and the Second Star of Africa - and form part of Britain's Crown Jewels held in the Tower of London.

Additional reporting by Reuters