The Hope Diamond
On September 20, 1997, the Smithsonian opened its new gem and mineral display. The main display will be the infamous blue Hope Diamond. For years it was displayed in a wall safe with one side open. The Hope will now be displayed in a glass cylinder. The 45.52 diamond is mounted with 16 white diamonds and is suspended from a platinum chain with 46 additional diamonds. It rotates beneath special lights that allow viewers to look deep into the stone. Diebold, the safe manufacturer, donated the 3-inch glass mechanism. At any sight of a threat, the stone will drop out of sight. The room where it is displayed is the Harry Winston Gallery. The $13 million renovation was financed by private donations. Janet Annenberg Hooker donated $5 million and the Harry Winston Research Foundation $1 million.
Despite the revolution in Zaire, now called the Congo, DeBeers has opened two buying offices near the diamond-producing areas.
Two Israeli women were recently arrested in South Africa. They were attempting to smuggle $700,000 worth of diamonds out of the country. The diamonds were wrapped in condoms and hidden in their "private parts".
Meanwhile, a Swissair employee in Zurich found a crate he thought was empty. It was filled with $11 million worth of uncut diamonds. The diamonds had come from Zaire but had been lost due to the civil war.
Finally, diamond miners were using carrier pigeons to smuggle diamonds out of the Alexor mine in Namibia. Authorities located more than $200,000 in diamonds and arrested 40 people.
Antwerp Bust and Fraud
Antwerp's Diamond Office, which controls the imports and exports of diamonds, was raided on June 19, 1997. Walter Baert, High Diamond Council spokesman told Reuters that the raid involved one company.
The raid started at the Brussels airport. A diamond dealer declared a package to be worth between $6-7 million. When the airport officials found it did not contain that amount, custom officials raided the Diamond Office.
Earlier this year, three diamond workers were charged with fraud and tax evasion in Antwerp. Police said the three were laundering money through the banks. The arrests stem from an investigation after the bankruptcy of the Max Fisher Bank.
US Imports Of Colored Gemstones
|Value (Millions of Dollars)||Volume (Millions Of Carats)|
If you study the above charts, the 1996 imports of emerald rose yet the prices declined. Imports of ruby rose dramatically and prices barely inched upwards. Sapphire imports increased and prices escalated. What does this mean? It is hard to decipher these numbers without understanding the dichotomy between the high end stones and commercial quality goods. Today there is a growing gap between mass market merchandisers and high end dealers. Middle level consumers and dealers are nowhere to be found. This is the new economic trend in the US. The high end market is under tremendous price pressure while the low end goods are declining. However, since the mass marketing of gemstones via cable TV is a larger market than high quality gemstones, these statistics show declining prices.
The emerald Congress that was to occur in July in Brazil will now take place in Bogota on February 23-25.
The 70 Colombian soldiers held for months by Colombian guerrillas were freed this summer. President Samper agreed to demilitarize a 5000 square-mile jungle area. The Revolutionary Armed Forces of Colombia (FARC) had captured 60 of the soldiers when the guerrillas overran an outpost. Approximately 27 government forces died in the attack. The other 10 soldiers were captured in an ambush. A ceremony was held in Cartagena and was attended by European ambassadors and a South America delegation. FARC leader Joaquin Gomez said, "armed struggle will always be relevant in a country like Colombia as long as hunger, unemployment, and government abuses persist." The returned soldiers were clean shaven and in good health. They were permitted to listen to the radio and watch TV.
The two main guerrilla groups, the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN) are now targeting the Colombian oil industry.
Oil is now Colombia's number one legal export. Workers are refusing to return to work at British Petroleum (BP) because of ELN threats. The ELN has burned buses and killed a BP contractor. Occidental Petroleum said 28 people have been killed since 1996 in their production zone. This includes Colombian soldiers, security guards and six Occidental contractors.
ELN and FARC have grown to 100 cells and 10,000 members. They attacked the jungle pipeline 45 times last year. The guerrilla groups are also involved in the drug and emerald trade.
After six decades of growth, Colombia's gross domestic economy may fall this year for the first time since the Depression. The reasons are guerrilla violence, government mismanagement, and the standoff between the United States' and Colombia's handling of the Drug War.
The Thailand Stock Exchange is down from 1200 to 500 this year. The baht, Thailand's currency has dropped more than 32% since July. It is estimated that 30% of loans are in default. In August, the International Monetary Fund announced a $17 million rescue package. The Bank of Thailand suspended operations of 58 banks and finance companies. Approximately 15 banks and 33 finance companies remain. The Thai government plans to set up an organization similar to the Resolution Trust Corporation-which bailed out the savings and loan industry in the United States.
The Ho group, the largest gem dealers in Thailand, sold its jewelry factory, closed its two magazines, has the AIGS laboratory and the the radiation lab for Blue Topaz up for sale. The flagship of the Ho Empire, the Jewelry Trade Center, is also in trouble. When the 59 story building opened in 1996, 200 luxury condos had been sold and 75% of of the retail space had been rented. Now the building is deserted. The Bijoux Holding Pcl., the Ho real estate company, lost money in 1996 and its share price has plummeted over 90%. It appears the Ho family has closed its headquarters for regrouping. Due to the losses in the financial and real estate areas, the gem profits could no longer support the other businesses.
How will this affect the gem market? The decreasing Thai baht should mean prices for Thai goods will be lower. However, the Thais are smart so they might simply revalue their gems to reflect new price levels. Some people suspect it might be three to five years before the Thai market comes back again. Others speculate that the Thai gem market's health depends on the rest of the world. The US market remains strong and Europe and Japan are weak. Thai exports have declined about 5% per year for each of the last five years. Thailand is now competing with Burma, Sri Lanka, and Vietnam.
Vietnamese rough ruby is now being exported to Sri Lanka for heat treatment, enhancement, cutting and polishing.
The tanzanite market remains weak. The majority of tanzanite is commercial grade and demand is low. High quality tanzanite demand is better and if the shortage continues, experts believe the prices will escalate later in 1997.
There is a rumor of new production of tsavorite from Kenya and Tanzania. It is reported to be electric green. One seller was reported as asking over $2500 per carat for the rough.
The Neu Schwaben mining region is producing blue, green, and pink tourmaline. The gems are larger and have a better color intensity than the Brazilian material. The common material is trading in the $20-$60 range. Fine stones can command $400 per carat.
America's only working diamond mine is the Kelsey Lake Mine in northern Colorado, 46 miles from Fort Collins. Recently, a 28.2 carat stone and a 16.3 carat diamond were discovered. They are both white color. Last year, the mine produced a yellow 28.3 carater. The yellow was cut into a 5.6 carat stone which was sold for $87,000 or $16,000 per carat by a local Denver jeweler. So far, the mine has produced 20,000 carats of rough.
According to Sgt. Dan Siri, a member of the Los Angeles to Seattle task force, "This is every bit as large as the narcotics and dangerous drugs trafficking the Colombians did back in the '80s, and it is equally sophisticated." The task force believes the gang can be attributed to over a dozen robberies this year.
The gang performs surveillance on salesmen and couriers to confirm the victim can be isolated and is carrying gems. Most of the victims were hit by five or six men as they entered or left their cars. The gems are sold to a middleman for 25 cents to the dollar and then disappear into the international gem trade.
There have been six robberies in the Detroit area this year. None of them have been solved. Tapper's Diamonds and Fine Jewelry was recently robbed twice in three months. Robbers wearing Halloween masks stole $259,000 in jewelry. As the robbers fled, police cordoned off the area and conducted an extensive manhunt. The two suspects hid in the forest and escaped by duping an unsuspecting motorist into driving them away from the scene.
Credit Card Fraud
An Indian doctor, posing as a travel agent, obtained a stack of credit card numbers from several credit agencies. He bought thousands of dollars of gold jewelry from manufacturers in Arizona and California. He then sold the gold to a coin dealer in NY. The man was arrested.
An Honest Man
Todd Kennedy, a 41-year-old sewer employee came across a bank bag while going out to dinner in Virginia. The bag was full of diamonds. He took the bag to the police. The police could not believe their eyes when they opened it. The bag was owned by a local independent jeweler who accidentally let it fall out of his pocket. The diamonds were worth $25,000. The jeweler gave Mr. Kennedy $200 which he donated to his local church.
The Good Life
For Centuries, Rubies, Sapphires and Emeralds Have Put a Sparkle in People's Eyes
by Ettagale Blauer
(Ed note: Although the prices are in this article are retail, it still provides some excellent points.)
"But ruby, treasured for its intense and pure red color, is also distinguished by its rarity. You cannot just order up a five-carat, gem-quality Burma or an intense Kashmir sapphire--still considered the absolute best, though mining ended in both regions many years ago." (Ed note: Although Kashmir sapphire mines ran out long ago, this statement is untrue as it relates to Burma sapphire and ruby.) "No matter how much money is offered, even the most knowledgeable colored stone dealer with connections all over the gem world--which is to say, all over the earth--must search and search for such a rare gem. Unlike diamonds, which are available in virtually any size and quality up to 10 carats, these colored gemstones have always been in short supply, particularly in the finest qualities. When such a stone becomes available these days, it is likely to be a stone mined long ago and simply coming back on the market. There, it can command bids from buyers all over the world. A New York dealer who specializes in the big three colored stones, says, "You have to realize that fine stones are rare to begin with. Out of 1,000 Burma rubies that were mined, maybe three stones are fine. It would take perhaps one to two years to find a five-carat gem Burma ruby--and that means the finest color, well cut, with tremendous brilliance, and at least 80 to 90 percent clean. And, an untreated stone, one that has not been heated to enhance the color. You cannot find an absolutely flawless stone. It would take a lot of legwork to find it, and it would cost you about $150,000 a carat." That's $750,000 for a five-carat stone--and you would still have to wait for it to be located.
But for some, there is no color so beautiful as a richly saturated, intensely blue sapphire. If you've only seen commercial qualities you may think that sapphires are inky in color, almost black. But take a look at a Kashmir sapphire--if you can find one. "Most people who are looking for a Kashmir should not even start looking." a gem dealer says. "It's not coming out of the ground at all, and you'd have to wait many years. If you even find one, you'll be paying about $30,000 a carat. The same is true of a Burma sapphire; for a gem five-carat stone, of excellent color, with perfect cutting and 90 percent or better clarity, you'll pay $15,000 a carat."
Commercial Mineral Newsletter
Where have all the huge rubies gone? We all know the saying "good things never last." Well, that statement must have been coined by a gemstone dealer as he/she reflected upon the rubies and in particular, Burma rubies. Mong Hsu Burma ruby is one of the stones we have said from the beginning of the production we should buy up all the nice material and stash away as much as possible. However, the old problem of needing to to sell what we buy kept getting in the way of a brilliant plan. It has become MUCH harder to find nicer 1.00-1.50 ct. Burma rubies at a reasonable price and almost impossible to find and buy nice 1.50-2.00 cts. 3.00+? You can almost forget these as prices are back to the skyrocket "pre-Mong Hsu" prices.
The moral of this story: Buy every nice Burma ruby in the 1.00-2.00 ct. sizes that you can find at a reasonable price because it will definitely cost you more in the future.
An 11.88 star ruby sold for $345,000.
For comments, questions or price quotes E-mail NGC, Attn: R. Genis
Return To Home Page