Vol. 20, No. 4
Winter, 2002

TABLE OF CONTENTS

Collecting Gemstones During a Recession
by Robert Genis

Many unheated and/or unenhanced gemstones have been climbing rapidly in price the last few years.   The main movers have been garnets and anything unheated or unenhanced from Burma.  Collectors are confident buying unheated gemstones, with independent grading reports,  and any garnet without fear of treatment.  The declining stock market, consumer confidence, and the current recession have caused the colored gem market to stop its double digit increases from the last few years. 

Does this mean you should stop collecting gems?  Of course not.  Sometimes, it is good to review the basics of gem collecting.  First, collect what you love. You should have acquired a fascination for colored gemstones. You should feel pleasure from buying and owning top gem quality colored gemstones and colored diamonds. Collecting should be in your blood. Second, you should buy gemstones relentlessly.  It should not matter if the market is rising, flat or decreasing. The business cycle should be irrelevant.  If you have the funds, it should not matter if the US economy is in an expansionary or recessionary phase. As a matter of fact, when prices are weak or flat, your dollars may go further in a down market.  This is the key to successfully collecting/investing, whether it is in the gemstone, collectible, real estate or stock/financial  markets.

Economic Cycles and Gem Prices
The gem market has evolved over the years.  During the investment boom of the late 1970's and early 1980's, the main goods people bought were heated Thai ruby, heated Ceylon sapphire and white diamonds.  When the recession hit during Ronald Reagan's administration, most of these goods plummeted in price.   In retrospect, these gemstones were never really rare and have never recovered in price.  However, certain stones moved contracyclically.  For example, stones that bucked the downward trend were Kenyan tsavorite, Burma spinel and colored diamonds.   Interestingly, these stones that were not heated or treated in any manner.  The only other exception was oiled Colombian emerald, which  rose throughout the 1980's.   However, treatment issues still haunt this stone today.

The short recession of 1990-1992 had very little affect on gem prices. Unheated Burma sapphire and ruby were stable.
Today's recession seems to have affected lower quality and treated gemstones more than unheated  gem goods.  The recent Gems and Jade Emporium auction in Burma sold almost $31 million worth of jade and ruby.  Despite the world's weak economy, this indicates the insatiable demand for Burma goods. The bottom line is high quality gemstones often operate in their own pricing cycles, almost irrelevant to world economic cycles.  Treatments, bad publicity, plus supply and demand seem to have a more vital effect on gemstone pricing.
Recently, a client called and said, " Please give me one of those $10,000 unheated Burma rubies.  At least I know it will not be worth $1000 tomorrow, like my  technology  stocks."  He has  a good point.  Natural unheated or unenhanced gemstones will always be rare, irrespective of economic conditions.  This limits their exposure to downward pricing.  Further, most collectors are long-term oriented and have the income  not to be "forced sellers."
So have fun and keep collecting!

The Flower Diamond

by Robert Genis

Many may remember the 1964 role of Peter Sellers as Inspector Clouseau, the  French police inspector in The Pink Panther. The suspicious, blundering Clouseau was always one step behind everyone else. He was hot on the trail of a famous jewel thief who was planning to make off with an expensive gem known as the Pink Panther.  The Pink Panther diamond was named because it had an inclusion that resembled a leaping panther. While the stone was fictional, it does illustrate that inclusions can be valuable, if they resemble something. The Pink Panther diamond also  starred in three sequels.


Fast forward to the the jungles of Minas Gerais, Brazil in 2000.  It is a hot and humid day.  An old timer Brazilian miner is searching the streams for anything of value.  In his spare time he digs for diamonds and gemstones with a shovel.  He has spent his whole life in abject poverty.  Suddenly, his eyes catch a glint of something shiny on the river bank.  He  strolls over to investigate and finds a 6.23 octahedron with an unusual inclusion.  It looks like nothing he has ever seen before.  Although he is unsure of what it is, he puts it in his pocket and keeps searching for stones.
John Humbert, By the Carat, Inc,  just happened to be living in Brazil at the time.  When he first saw the stone he suspected he had something of value.  The stone was near colorless and appeared to have a flower inclusion within it.  He bought it from the Brazilian miner who now is retired with more money than he ever dreamed of having.
 
GIA Research
Humbert submitted the stone to the GIA.  His stone was photographed and discussed in Gems and Gemology, Fall, 2000  together with another diamond that showed a flower-like inclusion.  Tests showed the 6.23's gray cloud micro-inclusions were probably caused by concentrations of hydrogen.  The stone fluoresced yellow under long and short wave UV(Ultraviolet). 
The stone was later extensively studied by Wuyi Wang and Wendi Mayerson of the GIA Gem Trade Laboratory, New York, New York.  The 6.23 had been recut to a 3.02 pear shaped modified brilliant-cut.  The diamond was purposely recut to display the symmetrical six-petaled flower-shaped inclusion with an extra large culet parallel to the table facet. It was graded by the GIA as a Fancy brown-greenish yellow.  According to Humbert, " The diamond looks greenish."  The stone has only a color origin report, because it would grade imperfect with a complete grading report.  Wang and Mayerson conclude the flower is actually composed of numerous micro-inclusions, randomly scattered as needles with three petals radiating upward and three downward.   The stone now fluoresces weak to medium orange yellow under long wave and weak yellow under short wave UV. 

Marketing
Humbert has ambitious plans to market the diamond. He plans on advertising the Flower Diamond in the Robb Report and Millionaire magazines.  He states, "Possibly I will approach flowers.com or 1-800-Flowers.  This stone would be a great logo for a flower company." He hopes the stone will eventually be placed with a Fortune 500 CEO.

Value
What is the asking price of the Flower Diamond?  Retail ask is $2.9 million and wholesale is $2.3 million.  He mounted the diamond in a platinum necklace with 32 carats of diamonds.  The value of the necklace is approximately $40,000.  According to Humbert, " I have already been offered $1.2 million by someone in the trade. He wanted the stone to remain in his family forever."  Hubert stated he declined the offer.

Most colored diamond dealers agree the wholesale value of a similar graded Fancy brown-greenish yellow diamond that was flawless would be approximately $5000 per carat.  A similar imperfect diamond would probably sell for about $2500 per carat. If the stone was a true green it would be worth $150,000-200,000 per carat.  The wholesale price per carat of the Flower Diamond is about $760,000 per carat.  This is red diamond territory.  In other words, the premium Humbert is asking is over 150 times the price of a flawless stone or over 300 times the price of an imperfect stone for the flower-like inclusion.

Summary

In order for a diamond or any gemstone to be valuable it must be beautiful, rare and desirable.   We all know red diamonds fit into this category with just 15 red or purplish red diamonds graded by the GIA since 1987.  Everyone is aware that any unheated three carat or larger Mogok Burma ruby is rare and expensive.  

Just because a gem is rare does not necessarily make it valuable.  Two perfect colored gemstone examples are taaffeite and hiddenite.  These two stone are truly rarer than ruby or  diamonds.  However, does that necessarily make them more expensive?  Of course not.  The million dollar question is: is the Flower Diamond beautiful or is it a curious oddity?   Humbert has shown the stone to the auction houses, but "they have no idea what value to put on the diamond." Everyone agrees the true value of any diamond  or precious gemstone is what a knowledgeable buyer and seller agree upon.  Historical precedence is practically non-existent in pricing goods with unusual inclusions.  Remember, the Pink Panther diamond was only a movie. Only time will tell the true value of this rock.  Of course, the old cliche, "Beauty is in the eye of the beholder" rings especially true in this case.

International Gem News
General Ne Win Dies
General Ne Win, the former dictator of Burma for 26 years, died on December 4, 2002.  He had been under house arrest since March 7, discredited by the very generals he had picked to succeed him. He was  either 91 or 92.   Ne Win died in his lakeside villa with only his eldest daughter, Sandar Win, by his side.   Ne Win was cremated without military honors. Ne Win's two other children are abroad and his wife lives separately. His three grandsons and son-in-law are in jail, sentenced to death for plotting a coup against Burma's military junta.  He was a national hero for his role in winning independence from Britain in 1948.  Ne Win seized power in a bloodless coup in 1962  and turned Burma  into a socialist state.  Private businesses were nationalized, foreign private investment virtually ceased, and inefficiency, corruption and black-marketeering soon spread throughout the system.  He  turned Burma from one of Southeast Asia's richest countries into one of its poorest and most isolated.

He also achieved notoriety as a playboy and reclusive eccentric. A deep belief in numerology prompted him once to issue bank notes in 45 and 90 kyat denominations because the numbers were divisible by his lucky number, nine.  He retired from politics in 1988 but retained behind-the-scenes clout.  Ne Win was regarded by many in Burma as having magical powers.  His influence began to wane a few years ago, and  many Burmese waited for his death.

Burma Auction
The Gems and Jade Emporium auction was held in Rangoon on Oct. 26, 2002. The sales of  rubies and jade totaled US$30.71 million.  The floor price was $25.41 million.  This is the first time the sale proceeds exceeded the floor price at the auction.

Approximately 600 foreign gem merchants from China, Hong Kong, and Taiwan and together with 370 local gem merchants participated in the bidding.  This year's event drew about 500 Thai businessmen. During the event, most Rangoon hotels were full, and all Thai Airways International flights between Bangkok and Rangoon were sold out.  More that 90% of the goods belonged to private companies. The government taxed 10% of the sale proceeds as service charges.  Once again, Thai dealers stated The United Wa State Army used the gem auction to launder millions of dollars in drug money. Allegedly, Wa traders bid on at the auction and bought gems from miners. They are accused of paying up to 10% more than the original cost to launder as much cash as possible.  The Wa brought jade and 500kg of corundum worth at least  and US$3 million.  The junta and the Wa signed an agreement in June 2001, under which the Wa was expected to cease production of drugs and switch to gem trading. We are unsure if these accusations are true or the Thai dealers are experiencing sour grapes.

Burma-Thailand Border
Despite the Thai-Burma border having reopened, trade between the two countries remains slow.  Burma had reopened its border but is still imposing restrictions on trade to protect its own industries and prevent inflation.  Some of the goods Burma has banned from importing are chewing gum, cakes, wafers, chocolates, canned food, instant noodles, liquor, beers, cigarettes and fresh fruit. Banned exports include teak wood, petroleum, gems, rice, arms, ivory, elephants, rare animals, antique objects, leather, silver, tin, gold, diamond, jade, bronze and pearls.

Canadian Emeralds

A staking boom has erupted for gem-quality emeralds in the Yukon territory in Canada.  The find was made by geologist Bill Wengzynowski, while he was searching for  copper.  In 1998, he  stumbled across what he thought was green malachite. On closer inspection, he realized it was beryl with chromium or emerald. The area is only accessible by helicopter and a few  groups are now looking in the area.  Only time will tell how large the discovery is and whether is is an economically feasible project.  Most of the goods discovered are small, cut below a carat and need treatment. Emeralds have to be mined very carefully without the traditional blasting methods.

Canada's first emerald-mining company, True North Gems, recently launched its first public offering on the Toronto Stock Exchange.  It started at $1.40 Canadian and closed at .89 Canadian cents on volume of 288,500 shares.  At press time, it has traded between $1.75 Canadian and .80 cents Canadian. The funds will be used to process the first 53 kilograms of emerald concentrate.  True North has signed a three-year research agreement with the University of British Colombia to help identify new gemstone areas. Until now, North Carolina is one of the few areas in North America to produce fine emeralds.  The main sources for emeralds today are Colombia, Brazil, Zambia, Pakistan, Russia, Nigeria, and Afghanistan.

Vietnam Gem Display
The Marvelous Pearl and Vietnamese Gems recently opened in Hanoi. It is an exhibition of paintings and sculptures made entirely from gems.  The 550 art works are made of gemstones including ruby, topaz, sapphire, spinel, tourmaline, citrine and amethyst. They feature recreations of Hanoi's old quarter streets, paintings of villages, Chinese landscape paintings and art works of the Renaissance. The exhibition also displays jade sculptures, Buddhist statues, jewels and gems made into bowls, chop-sticks and chessboards. Each art work was valued between US$50,000-100,000 depending on the type, quality, size and  color of the gems. The exhibition will travel to Singapore next March.

Notable Quotes

Finanz und Wirtschaft, Swiss newspaper
November  17, 2002

"Many Americans realized as a result of the terror attacks how fleeting life is. They sought something with eternal value and found it in diamonds."
Nicky Oppenheimer, De Beers's chairperson

The Observer, England, October 28, 2002
"The  ease with which terrorist organizations can use diamonds as a source of funding and money laundering is frightening.  They can easily transport them over borders without detection and convert them back into banknotes whenever they need the money."
Alex Yearsley, Global Witness

Collectors Corner
Russians Find Red Rough

Geologists have recently found more than 400 red diamonds in the Lipetsk region of Russia. Scientists are searching the deposits to see if mining is feasible. The diamonds are reportedly high quality, but the sizes are not known.  Hopefully, this find will create the opportunity for more collectors to own these goods.

GIA Study Of Pink Diamonds
In the summer issue of Gems and Gemology, 2002, the GIA categorized nearly 1500 pink type 1 and type 2  pink diamonds.  Overall, 4% graded as fancy vivid, 10% fancy deep, 19% fancy intense, 33% fancy, 10% fancy light, 11% light, 5% very light, and 8% faint.

Tanzanite Becomes New December Stone
Tanzanite was recently named a new birthstone by a consortium of jewelry groups. It's the first such addition in decades. Tanzanite seems a better choice than turquoise, blue topaz or blue zircon for December.  The gemstone has rebounded in price since The Wall Street Journal reported possible links between terrorism and tanzanite.

Diamonds? Give Me HDTV 
According to the Consumer Electronics Association 58 percent of women would prefer to own a HDTV set than a 1-carat diamond ring and 64 percent of women would rather have a digital camera than a pair of half-carat diamond stud earrings.

Victoria's Secret Fantasy Bra
This year Victoria's Secret created the  $10 million "Star of Victoria" bra and panty set.  It  featured a 60-carat pear shaped flawless diamond at the center of the bra.  A rose and leaf pattern of rubies, emeralds and diamonds covers the rest of the bra and panty, for a total weight of 168 carats.  We are unsure if any of these gifts ever sell or exactly what happens to them, if they are not sold.

DNA Gemstone Necklaces

Scientist Louise Allcroft, Complement Genomics, can take someone's unique DNA fingerprint and have it transformed into necklaces. She takes a simple swab from the inside of the mouth for the DNA sample. Complement's scientists analyze the DNA and turn the results into a "barcode" pattern, which are then  crafted into necklaces. Alternating bands of gemstones and metal correspond to the genetic fingerprint.  Complement Genomics claims the genetic information  remains private.

Auction Report
Christie's
Christie's NY Magnificent Jewelry  auction sold $16.1 million or 67% of lots. A rectangular-cut 34.08 carat fancy pink diamond was the top lot selling for $2,264,500 to a European private.  The 55.08 carat fancy yellow Kimberly Diamond sold for  $603,500 to a U.S. private.  A  single-owner  collection  of  museum quality Art Nouveau jewelry sold for $2.4 million. This was triple to quadruple the estimates.  Despite a soft market and weak economic conditions around the world, rare and important gemstones and jewelry still attract buyers.

Sotheby's
Sotheby's NY auction totaled $7.7 million or 63% of  lots. The top lot was a 31.85 carat fancy deep orange-brown cushion shaped diamond. Estimated at $45,000 to $55,000, it sold for  $372,500.  Diamond sales were weak, especially for D-IF stones.  A  pair  of  pink and blue diamond  earrings were  withdrawn from  the  sale at  the  last minute.

Gem Thieves
James Bond Gang

The original James Bond Gang operated in the early and mid-'90s.  They primarily robbed hundreds of homes in New Jersey and New York.  They recruited new members following their release from federal prison in early 2001.  Nine members of the James Bond Gang burglary ring were arrested in October. Two more gang members were arrested in November at a store in Manhattan's "Diamond District."  They got their nickname by employing gadgets reminiscent of the James Bond movies, including driving in luxury cars with license plates rigged to flip over to thwart identification.

Ex-Cop Guilty in Stolen Diamonds Case
A  former  Boston police detective pleaded guilty  to money laundering charges for his role in selling  $100,000 worth of diamond jewelry stolen in 1996. Michael Flemmi faces a maximum of 50 years imprisonment and a $250,000 fine for selling the diamond  jewelry to  an associate  for $40,000.

Attorney Sentenced For Selling Gems

A Utah attorney received a 63-month sentence and a $10,000 fine for harboring a fugitive client and disposing of stolen property.  Dean Zabriskie, 60, concealed and disposed of more than $5,000 in stolen goods, taken by Zabriskie's client Gerry Branagan in several burglaries.  A search of Zabriskie's home turned up stolen cash, paintings, jewelry, gemstones and glass figurines.

Diamond Necklace Stolen From Show
A diamond necklace worth over a million dollars was stolen October 18 from  a  stand  at  the  Jewelry  Arabia  2002 Show.  The  Cartier  necklace was  stolen from  its owners, Asia Jewelers, which had set up at the Bahrain Exhibition Center, Manama, Bahrain.  After the  theft  was  reported,  police  searched  some  2,000 visitors. The necklace was not found.  Police and exhibition security officials stated they had two suspects but no arrests had been made.

Gemstone Con Men Sell Glass

In England, con men are selling worthless gemstones.  Victims have been lured into the deal by fraudsters in supermarket, parks or gas stations. The con men persuade people to part with cash for worthless pieces of glass.  The victims are offered generous offers to either sell their vehicle, or offered a potentially profitable business deal. Eventually, the victim is persuaded to buy so-called valuable ruby and emerald gemstones.   Arrangements are made to meet the next day for the transaction to take place. The victims part with thousands of dollars, and are abandoned by the offenders and left with worthless pieces of glass. The gang is thought to involve at least six people.

Man Caught with 3,400 Diamonds

An Angolan man, Carlos Pedro, was stopped at Luanda's international airport after the X-ray machine showed that he had 'foreign objects' in his stomach, believed to be some 3,440 diamonds.  Pedro was interrogated by the police.  Angola is rich in natural resources, including diamonds, which were sold illegally during the country's long civil war to fund the Unita rebel movement. The war ended officially in April this year, when the government and Unita signed a cease fire, but diamonds are still smuggled.

Drugs Allegedly Hidden in Polishing Tables
Three Israelis are accused of trying to smuggle $42  million  worth of ecstasy  pills  into  the  United  States by  hiding  them in diamond polishing tables being shipped from Belgium.  If convicted, they could face 20 years in prison.  They were arrested after warehouse workers in Belgium allegedly saw them hiding the illegal drugs in tables bound for the United States. Belgian police seized the 1.4 million pills and contacted the U.S. Drug Enforcement Administration (DEA), which had the tables shipped.  Once they arrived in New Jersey,  agents  planted  a global positioning device in one of the tables and tracked it.

Italy Regains Lost Diamond Treasure
Britain recently returned to Italy a sunken treasure of  diamonds and old coins that had been illegally hauled off to London by scavengers. The collection is  worth $1.5 million and was aboard a ship that sank in Italian waters in 1841.  Three Britons discovered it two years ago and  plundered it with  a crane.  When they tried to sell the loot at auction in London, Scotland Yard intervened. The Britishers claimed they were in international waters and could legally recover.  The treasure is now  bound  for a  museum in Pisa.

South Africa Rings Still Missing
A young suspect recently swallowed two expensive rings while pretending to be a prospective customer at a jewelry store in Cape Town.  Although x-rays have shown exactly where the rings are, police have not been able to lay their hands on them.  The police are worried the rings could have disappeared somewhere between the esophagus and the large intestine.  Experts at Customs and the South African Narcotics Bureau are familiar with this phenomenon because smugglers regularly use the swallowing method to smuggle drugs in and out of the country. Suspects are offered a seat on the "throne" - a special toilet that allows investigating officers to retrieve evidence after it has left the suspect's body.  All materials are carefully searched, rinsed and washed so that even the smallest gemstone can be recovered to use as evidence in a court case.

Gems and Van Gogh Worth Millions Stolen
In Amsterdam, thieves broke into the Museon, a science museum, in early December and stole necklaces, tiaras and precious gems on loan from other museums, European kings and queens and from private collections.  The thieves took only the most valuable items in the exhibition. The value of the jewels taken was several million dollars. Police are baffled because the exhibition was protected by 24-hour cameras and sensors.  The museum was a demonstration of the diamond industry from rough stone to magnificent jewelry. It offered glimpses into the mining process, industrial uses and valuations. The exhibition may now close.

Days later,  two Vincent Van Gogh oil paintings worth millions of dollars were snatched by thieves in a daring robbery at an Amsterdam museum. Thieves scrambled on to the roof of the Van Gogh Museum using a ladder and ropes, broke in, descended to the first floor of the three story building and disappeared with the renowned paintings.

In The News
Asia Times
December 4, 2002
Thailand's gem capital

By Michael Spencer
"The provincial town of Chantaburi in eastern Thailand seems an unlikely center for international commerce of any description, but a combination of factors has earned it a solid reputation as one of the most important gem-trading capitals of the world.

Located some 250 kilometers from Bangkok, the town owes its prominence to the nearby presence of a legendary gem mountain known as the Khao Ploei Waen. In the past sapphires and rubies littered the ground there in such quantities that village children used them as marbles or smashed them into pieces for the pleasure of making colored sparks fly. It was this treasure trove that put Chantaburi firmly on the map as one of the world's top gem-trading locations, an accolade it still merits today.
The local gem traders' association estimates that today at least 80 percent of the world's rubies and sapphires transit Chantaburi at one stage or another on their journey from the mine to the retail outlet.

But in the 1970s and '80s the town's centuries-old commerce looked to be on the point of collapse. Local mines were all but depleted and supplies of high-quality rubies from Myanmar were becoming increasingly difficult to obtain. There were imports from Cambodian mines just across the border but supplies were shrinking rapidly. With some deft footwork, local dealers developed overseas supply networks for rough gems and maintained the town's preeminence by capitalizing on the skills of its craftsmen.

The real savior of Chantaburi's status as a gem-trading center, however, came in the form of the colorless geuda sapphires that began to arrive in large quantities from Sri Lanka in the 1980s. Over the years, Thai gem cutters had developed a lucrative sideline of heating gemstones to improve their color and selling price. The process was known for centuries as a way of deepening the color of rubies and sapphires, but Chantaburi craftsmen elevated it into an art form involving a combination of heat, pigments and luck. When they applied their skills to the colorless geuda stones, they were able to imbue them with hues similar to the best Myanmese and Thai stones, in the process providing a lucrative new income source for the local dealers.

The formula for the arcane process of heat treatment is jealously guarded by a handful of local artisans, and such is the value of their knowledge they have recently applied for an international patent to protect their intellectual property rights over the technique.

Gem dealers freely admit that with the exception of 1-2 percent of stones that are extremely valuable naturally perfect gems, it has been a standard practice for centuries to heat almost all rubies and sapphires to enhance their color permanently.

Heat-treated natural stones are still a cut above synthetics. These are chemically identical to natural stones, but created cheaply in labs. Sapphires and rubies have been synthesized since the early 1900s and are getting harder to detect. A neophyte in the business might think that going closer to the source decreases the chance of being ripped off. Actually the inverse is the case. An old dealer's maxim warns that the closer to the mine, the greater the chance of encountering a synthetic stone.

The gem business is a major component of Chantaburi's local economy, which is otherwise largely based on agriculture and fishing. The gem traders' association estimates that some 20 percent of the province's population is directly employed in the gem sector, and the indirect benefit is felt in a considerable portion of the province's economy.

The nerve center of Chantaburi's gem trade is the Talaat Ploei, or gem market, located in the heart of the old town. The market, an informal collection of open-fronted shophouses at the intersection of Si Chan and Thetsaban streets, operates on weekends from Friday to Sunday. Thousands of dollars' worth of gems lie scattered on the tables, and African, Indian and Sri Lankan dealers mingle with Thai, Chinese, Japanese and even the occasional Western buyer.

Typically from the mine to the end consumer a gemstone changes hands at least seven times, and jumps in price a thousand percent. Even between Chantaburi and Bangkok the price difference can vary by up to 30 percent.

Huddled at rickety tables with jeweler's loupes screwed into their eyes, the buyers rent space at one of the shophouses and put up a sign listing the gems they are interested in acquiring. Sellers patiently line up to present their stashes and eye the stones of the competition. It all seems very amicable with no raised voices, just quiet bargaining that leads to a deal being refused or concluded with a handshake. There is surprisingly little crime in this ancient brotherhood of gem traders, where trust is everything and anyone who doesn't play by the rules will find it impossible to do business again anywhere in the world.

"Chantaburi is for professionals," said Abdo, a Malian trader in rough stones as he waited to present a bagful of sapphires from Madagascar..."

Pittsburgh Post-Gazette
November 17, 2002
Hot Rocks: Mineral collectors in pursuit of nature's most beautiful works of art
By Mark Roth

"He is a retired industrialist, and she runs her own business. They live in the city.  Please don't use our names, they say.  In the eastern suburbs lives a doctor, and he feels the same way.  He doesn't want his specialty named -- someone could figure out who he is. What makes them so wary of publicity?

Rocks. But not just any rocks. These local residents are part of the sometimes secretive and fast-growing world of mineral collectors, the people who own pieces of some of nature's most stunningly beautiful creations. They are not gem collectors -- that's mostly a separate crowd. This fraternity instead scours the landscape for the minerals that gems are made of and for other geological creations that were thousands or millions of years in the making.

The owners' wariness of publicity comes partly from the fact that after years of building slowly in value, minerals are now soaring in price, and some specimens are even entering the upper end of the collectibles world, according to Marc Wilson, head of the Section of Minerals at the Carnegie Museum of Natural History.

There is no single turning point that explains why this boom occurred. Collectors "discovered" minerals in the 1970s, Wilson said, and then, when the stock market exploded in the '90s, prices really took off. Mineral collecting also is growing in popularity because of events such as this week's Carnegie Gem and Mineral Show, which will be held Friday through next Sunday at the museum at 4400 Forbes Ave. in Oakland. In recent years, the show has attracted 4,000 to 5,000 visitors, many of them neophytes to the world of crystals and geodes.

While mineral collecting doesn't yet compare with fine art or jewelry in either prices or numbers of elite purchasers, Wilson said there are about one or two dozen collectors in the United States who have paid hundreds of thousands of dollars for individual mineral specimens, and at the apogee, between $1.2 million and $1.5 million.

The local collectors are not quite in that league, but they have invested enough in their collections to fear either theft or vandalism. For an invited visitor, though, they are expansive and enthusiastic in explaining why they love their minerals. Words like amazonite and halite and beryl and tourmaline trip off their tongues like the names of favorite grandchildren, and they will let a guest gaze at and even touch their rare possessions.

A showcase of crystals

The city couple has been involved in mineral collecting for nearly 35 years, and the fruits of their labors are showcased in five floor-to-ceiling, glass-fronted cases in a converted living room.
While some collectors are narrowly focused in what they acquire -- all the minerals from one geographic location or all the possible types of quartz -- many others are like this couple, who let their eyes and hearts govern their eclectic selections.

The variety of the collection is remarkable.

At stage center is a giant geode -- a hollow rock with crystals lining the inside -- that is blanketed with purple amethyst, making it look like a mutant clamshell going to the queen's ball. As the businesswoman points out, though, amethyst is not as valuable as many other minerals because it's not as rare.

For rarity, the couple has a circular slice of stalagmite made of rhodochrosite -- pronounced road-uh-CROW-site -- a form of manganese carbonate. With light shining through it from the back, the rhodochrosite looks like a miniature tree stump turned on its side, complete with annual growth rings, glowing lustrously in raspberry and tan.

The cases also hold a specimen of Pennsylvania sulfur that looks as though someone had dropped a rock in a puddle of yellow paint and taken a strobe photo of it in mid splash; an alliterative set of petrified pine cones from Patagonia; a slab of translucent quartz with ghostly streaks of blue floating inside, the result of light shining through a wafer-thin strip of azurite on top; and pieces of opal that look like the aurora borealis captured in stone, glinting with sheens of gold, blue, green and red as the observer shifts vantage points.

Words cannot really capture the beauty of these minerals, though, any more than concert notes can capture the essence of Beethoven or food writers can evoke the aroma of chicken soup.
While the collectors' minerals need to enter through the optic nerve to be fully appreciated, they are more than eye candy. Each specimen represents a story from a life lived in pursuit of these objects or a mind focused on the pursuit of knowledge.

The physician collector is in the latter category, having started his smaller but more expensive collection of minerals in just the past decade.

For him, it was a natural extension of his biological research, plumbing the reason cells grow and change. That led him to an interest in geology, trying to figure out how Earth's crust also has grown and changed, and in the process, has created these gorgeous crystals, often thousands of feet beneath the surface.

The ocean on Mount Everest

He read a lot of the geology essays of John McPhee, and one statement in them left him with a feeling of wonder that has never gone away: that the top of Mount Everest is actually made of marine limestone.

From this fascinating idea -- that the highest place on the planet was once buried under an ocean -- came his attraction to the minerals created by the same planetary forces.  Holding a rare tourmaline crystal that glowed coral and green in natural light, he said reflectively: "If you sit down and look at this closely and understand the geology and the remote chance of this ever coming into existence and then being found and then being preserved," it creates a true sense of wonder.

A few years ago, his intellectual pursuit led him to call Wilson at the Carnegie and start asking questions.

From that grew a mutually beneficial covenant. Wilson would be the doctor's expert adviser, telling him which minerals had real value and which were run-of-the-mill. The doctor would become Wilson's mineral annuity plan, buying pieces the museum could not afford for now and keeping them until the day they can be bequeathed to the Carnegie's Hillman Hall of Minerals for everyone to see.

In all, the physician has about a dozen pieces, and several have more than three zeroes attached to their price tags.  He acquired some specimens from an auction at Sotheby's that was unloading the collection of a businessman who had fallen on difficult times.

In another case, he purchased a rare set of rhodochrosite crystals in deep, glinting reds from the famous Sweet Home Mine in Colorado, which is known for its pockets of that mineral. The mine owners, who reopened the abandoned 19th-century silver mine for the express purpose of searching for rhodochrosite, flew some samples in for the doctor to evaluate. He took one look and got out his checkbook.

The story of the Sweet Home Mine is now being replicated around the world, as companies form to buy up parts of old mines and sometimes even pay fees to purchase a year's worth of production, all in hopes of recovering the rare, beautiful crystals that fuel the collectors' market.  These entrepreneurial ventures are important, because they are at least preserving some valuable mineral locations.

Covered by sprawl

In too many other cases, Wilson said, "some of the most important mineral sites in America are now shopping malls and housing developments."

The old quarries and mines are being covered up not just because of America's rapacious sprawl, but because it's now too dangerous legally to keep some of them open.
A typical story, Wilson said, is what happened a couple of decades ago to a valuable quarry in Michigan that used to let mineral collectors freely roam its property. A woman dropped her children off at the site one day and then left. Her son then tried to lower himself down a cliff by rope to get into a depression in the cliff wall, but he lost his grip and fell to his death. The woman sued the quarry and won, Wilson said, and the quarry then blocked access to all collectors.

The emergence of elite collectors in recent years has produced a new competition between them and museum curators, Wilson said, and in most cases, museums do not have enough money to match the prices being paid by top collectors.

But that represents only a sliver of the collecting world.

Most amateur collectors still have a symbiotic relationship with mineral experts at museums that benefits both groups. Unlike some other scientists who disdain "interference" by amateurs, Wilson said mineral chiefs at museums usually welcome contact with collectors, especially those who still go out and search for minerals on their own.

The curators are glad to serve as advisers to the rockhounds, and the rockhounds in return will still offer a precious mineral specimen to a museum for $500, "where the [collector] big boys might want $15,000."

Amateurs will take less money not only because they don't have access to the high-end collectors, but because their love of minerals and the desire to share that passion with the public is more important to them than price. "To many people," Wilson said, "it's much more of an honor to have a specimen they found on display in a museum than to have it sitting in Joe Blow's private collection."

The midrange collectors, such as the retired industrialist and his wife, buy specimens for a few hundred to a few thousand dollars, "and this is the group that really drives the business for now," he said.

Four criteria determine how much knowledgeable collectors will pay for minerals, Wilson said. One is size; another is lack of imperfections -- no fractures or chipped ends; a third is rarity; and the fourth is aesthetics, which can involve everything from shape to color....."
 

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