GLOBAL MINING OBSERVER “De Beers made diamonds desirable. The industry has reaped the benefitsCOLOURED of that over a very long period of time.” GEMSTONES -2014- MARKET OVERVIEW CHRISTIE’S Coloured Gemstones Interest Rates Drive Poaching Diamond’s Gemstone Prices Market Share Higher “The issue with the coloured Coloured gemstone prices at the top gemstone market is that it’s so disorg- end of the market will find continued anised compared to diamonds,” says support from their hard asset status, Anish Aggarwal, co-founder of gemst- Christie’s director of jewellery David one consultancy, Gemdax. The view is Warren tells Global Mining Observer. echoed almost unanimously across the “As we all know, money in the bank industry. “It’s an incredibly fragmented is not earning anything and people market,” says JPMorgan analyst Alex- may have enough property to want to ander Mees. diversify into something else. Property Colombia has historically been one EASTER EGGS designed by painters Chrissy Angliker, Pat Steir and comes with maintenance and some of the world’s largest emerald export- April Gornik for the Fabergé Big Egg Hunt, currently underway in people don’t necessarily want that.” ers, whilst 80 per cent of all rubies are New York (see page 2). Warren describes jewellery and gem thought to come from Burma. Turf -stones as “a kind of currency. Precious wars in Colombia and trade embargoes gems have a pretty well recognised against Burma however mean that in FANCY DIAMONDS value around the world and prices are both cases, export figures evade public Price Gains Show in US dollars per carat, so it’s quite company accounts. ofitable but high risk marketing ruses easy to take a stone from one country Grading arbiter the GIA estimates Signs of Fatigue can continue to lift prices indefinitely. to another and know what its value is. that including pearls, the market’s In October, a 7.6-carat vivid blue stone If you want to be able to move large retail value is $10.3bn, with rubies acc- In December 2008, the Wittelsbach failed to sell at a Sotheby’s auction in sums of money around the world, it’s a GLOBAL MINING OBSERVER is a mining news bulletin. To receive future issues as they are released email: [email protected] ounting for 20 to 30 per cent, emeralds Blue, a 36-carat blue-grey diamond Hong Kong after bidding peaked at very simply way of doing it.” 15 per cent and sapphires 5 to 10 per once part of the Austrian crown jewels, $16m, below its reserve. Sharp price rises in the last 5 years cent. Other studies point to a market went under the hammer at Christie’s Winning more publicity, in Novem- he says have been driven in large part size of around $2bn at the mine level, auction house in London. ber in Geneva the Pink Star diamond, a by investment demand. “It’s people with emeralds accounting for 25 per Fetching $24m, it became the most 59-carat flawless stone, sold for a new wanting to put together nice portfolios cent, a third of them from Zambia. expensive gemstone ever bought at record of $83m to cutter Isaac Wolf, of jewels which they believe will be a According to Antwerp trade body auction. Better than the price was the but in February it was reported that good long term investment and buying the AWDC, the value of the global timing, following the collapse of the sale had fallen through, top quality stones that are difficult to diamond market rises from $15bn to US bank Lehman Bros and at the forcing Sotheby’s to assume the replace or find, which they presume, $72bn as it passes through the pipeline bottom of a financial crisis that asset for $72m after guarantee- and hope, will get rarer over the years.” from a mine to a consumer’s pocket had whacked every asset class, ing its sale. “We are quite “Prices for Burmese rubies and and applying the same fivefold markup from gold to stocks. comfortable with our valuation,” sapphires are extremely high. Buyers bridges the gap in estimates. Ever since, coloured diamond Sotheby’s said, “and see real want the very best in every category, Red carpet endorsements from the prices have ripped higher. In value in owning it at this price.” whether it is an emerald, a sapphire, a likes of Penelope Cruz, Kate Middleton 2010, the record was broken by a 25- According to diamond histor- ruby, they want to buy the top pieces and Angelina Jolie appear to have carat pink diamond sold for $46m to ian Edward Epstein, clear diamonds and the market’s strong for them all.” piqued the public’s interest in coloured the same buyer, jeweller Laurence are as common as television sets in the Warren dropped out of university stones. Diamond body the IDMA has Graff. Having recut the Wittelsbach, he US, but coloured diamonds enjoy true after his business trading in antiques said that at current rates, the coloured is meanwhile reported to have sold it in scarcity value, market insiders stress. and collectibles bought him a car and gemstone sector will double its market 2011 for $80m. Only 0.001 per cent of all diamonds motorbike. He has visited emerald share in the next 20 years. The recutting was heavily criticised mined have so-called fancy colours, mines in Colombia and is passionate “It’s not necessarily a zero-sum ga- and likened to the overpainting of a even fewer count as vivid and only a about saltwater pearls. me,” Aggarwal says. “I don’t see it as a Rembrandt. “It is the end of culture,” tiny fraction of those are large stones. Gemstone buyers at Christie’s he head-to-head between gemstones and lamented Gabiz Tolkowsky, a diamond Argyll Pinks for example (pictured), says are difficult to pin to any one diamonds. Both can grow together.” cutter whose great uncle Marcel mined by Rio Tinto in Western Austr- jurisdiction. “Whether they’re from Both at least are enjoying equally invented the ‘round brilliant’ cut. alia, are due to enjoy rising prices as Russia, the Far East, Middle East, we bullish dynamics, with low interest Graff’s objective, it is thought, was the mine deepens, moves underground have buyers from everywhere looking rates and rising discretionary wealth in to upgrade the stone’s clarity from and edges towards depletion in 2020, for top quality emeralds. The very best India and China elevating prices. “The “very slightly included” to “internally market observes say. Zambian stones are very fine, but if you growth in the middle class worldwide flawless”, increasing its value and by The slackening of record prices may want a suitcase full of Colombian top increasingly allows people to buy non- dint, prices across the market. His suggest however that the market has quality stones, it’s a lot easier to get.” essential items,” says analyst Edward publicised forays onto the auction moderated itself, escaping a worse co- Wealthy buyers do not operate in Sterck at BMO in London. “My fiancé circuit are also a well recognised way of rrection. “You can’t find fancy yellows isolation, Warren says, with prices at would argue it’s essential, but realistic- boosting recognition of his jewellery at prices where I feel comfortable,” one the top-end steering the wider market. ally, you don’t need gemstones to business, founded in 1960. polished diamond dealer recently told “The top tier pulls everything else up, survive.” Some query whether such highly pr- pricing group, Rapaport. I’ve got no doubt about that.” Gemfields True North Gems Richland Res. Mrkt Cap: £215m ($362m) Mrkt Cap: C$20m ($18m) Mrkt Cap: £3m ($5m) INDUSTRY NEWS: Walter Energy has idled its coal operations in Can- The heavyweight of the coloured Toronto-listed True North Gems Richland Resources, formerly Tanz- ada • Agnico Eagle and Yamana gemstone sector, Gemfields owns the owns the Aappaluttoq ruby deposit in aniteOne, owns a mining block on the Gold have announced a joint bid for Kagem emerald mine in Zambia, hold- Greenland, which is engaged in a world’s only tanzanite deposit, sitting Osisko Mining valued at C$3.9bn ing the world’s largest known emerald headlong dash to develop its mining in northern Tanzania. Theft, smuggling ($3.5bn) • Goldcorp has nominated resource. Sales of $66m in the last 6 industry, fostering tax revenue to gain and government intervention however eleven directors to Osisko Mining’s months suggest the company accounts independence from Denmark. have proved rampant, foiling its plans board after increasing a bid for the for 26 per cent of the global emerald “This heralds the beginning of our to build an integrated producer. company last week to C$3.6bn market, whilst its first auction of rubies transformation from an exploration In 2003, the government announ- ($3.3bn) • Asanko Gold has amend- from its Montepuez deposit in Mozam- company to a producer,” chief execut- ced a ban on exports to India and in ed its debt facility with gold-copper bique, due in June, will bump up its ive and gemologist Nicholas Haughton 2010, it took control of 50 per cent of lender Red Kite • Sirius Resources asset value by revising its ruby inven- said last month after the company was the company’s operations. On Monday, has resumed drilling at its Nova tory from cost of production. awarded a 30-year mining license. “It Richland’s board announced a stop to Bollinger discovery in Western Au- “They’re potentially sat on the best will enable us to showcase and deliver investment, subject to a “group wide stralia • HudBay has sought a court ruby fields in the world,” says FinnCap a new supply of rubies and pink strategic review.” The company’s min- order blocking Augusta Resource analyst, Martin Potts.