Lucara Diamond Corp said the 1,111 carat stone was found at its Karowe mine in north-central Botswana, one of the world’s most prolific diamond-producing areas.
The Type IIa diamond measures 65 millimetres by 56mm by 40mm.
The biggest gem-quality diamond ever found is the Cullinan diamond, a 3,106-carat stone found in the Premier mine in South Africa in 1905.
It was cut into several polished gems, the two largest of which are part of Britain’s crown jewels.
“The magnificent stone, which originated from the south lobe of Lucara’s Karowe Mine, is the world second largest gem quality diamond ever recovered and largest ever to be recovered through a modern processing facility,” the company said a statement.
Shares in Lucara shot up 34% in morning trading in Stockholm.
“The significance of the recovery of a gem quality stone larger than 1,000 carats, the largest for more than a century....cannot be overstated,” said William Lamb, the President and chief executive of Lucara.
The stone is yet to be evaluated, but commodities and mining analyst Kieron Hodgson, said it has “the potential to be one very expensive diamond.”
“Valuation will depend on potential inclusions, how it would behave in cutting, optimal shape as well as final colour,” he told AFP.
“All these things will need to be evaluated prior to bidding.”