Lucara Diamond Corp. said it recovered the stone from the Karowe mine in Botswana. The previous holder of the No. 2 position, a 1,111-carat diamond called Lesedi La Rona, was also unearthed in Karowe.
However, the company said the newly found diamond is "a near-gem of variable quality," which means that, as far as diamonds are concerned, the size of the stone is not what's most important.
"There are several qualities, also color and clarity, in addition to size, as well as how it can be cut," Rob Bates, a blogger on the diamond and jewelry industries, told CNN. "In the case of the Lesidi, even in its raw form it looked kind of beautiful. In addition to being large, it had wonderful color and clarity."
That's not exactly the case for this diamond, according to Eric Emms, a gem trader and industry commentator.
"The clarity looks to be poor (from the photo)," he said."'Near-gem' is a term for a crystal which will produce very little gem quality faceted."
The only larger diamond previously unearthed was the 3,106-carat Cullinan Diamond, which was discovered in South Africa in 1905. The Cullinan was eventually cut into smaller stones, some of which are now part of British royal family's crown jewels.
Natural diamonds are typically rated as gem-quality, near-gem or industrial-quality, explained Paul Zimnisky, an independent diamond analyst in New York.
"Most gem-quality is used as jewelry, industrial-quality is typically used for abrasive application. Near-gem can be used as lower-end jewelry or for individual purposes," he said.
While gem-quality diamonds can sell for hundreds or thousands of dollars per carat, and fancy colored diamonds can be in the hundreds of thousands or even millions of dollars per carat, industrial diamonds tend to sell for only about $1 per carat, he added.
"In this case, the recovered gem appears to be near-gem quality with portions appearing to be gem-quality. So until the true quality of the whole stone can be determined, it is very difficult to value it," he said.
Still, Lucara's discovery is notable in showcasing the company's ability to unearth huge diamonds, as Eira Thomas, Lucara's CEO, pointed out in the company statement.
"Karowe has now produced two diamonds greater than 1,000 carats in just four years, affirming the coarse nature of the resource and the likelihood of recovering additional, large, high quality diamonds in the future," she said.
It also shows how unpredictable nature is, for a gem this big to have survived in the Earth's crust, Bates says.
"It is a handful of companies who are able to economically cut it in a way that produces the most valuable -- but it's always an exciting moment when a mine coughs up a huge stone like that. It's good for the business, good for the country of Botswana."