Archive for the ‘personal’ Category

Burma (Myanmar)… When it comes to localities known for the production of truly fine gemstones, few rival this region. It is after all, well renowned for its breathtaking and exquisite rubies, sapphires and peridot, among many others. While Burma is a beautiful country, rich in culture and natural resources, it has never been rich in economic or political stability. It has been ruled by a military dictatorship since 1962. The United States over recent years has levied and renewed embargoes against Burma, banning any product or material (including gemstones) originating from there. It is however still legal to possess gems obtained from Burma prior to the embargo, and of course it can be easily circumvented if you buy the stones from them indirectly (buy from a Thai dealer… or something like that).

But let’s focus now on an aspect of the gem trade that has thousands of years of history… the jade trade. Burma is the key player in a material known as jadeite. Jade is not actually a single mineral form, but a name given to gem varieties of both nephrite and jadeite. Jadeite is the more highly prized because of its rich translucent emerald green color. Many people are simply not aware of how valuable truly fine jadeite actually is, as they may only be familiar with the carved nephrite variety common in Chinese carvings; or worse yet “B-jade” grade varieties which are dyed to achieve their color. The other reason most are unaware of fine jadeite is that they simply have never encountered it, and probably will not ever encounter it.

In Burma, jadeite is found in both rivers and in mountain regions, as well as in situ deposits. In all but in situ deposits, jadeite occurs as boulders covered with a “thick skin”. “River jade” has an advantage in that the boulders are weathered and often the outside of the boulders are worn, exposing glimpses into the center of the stone and the color it contains. Jadeite recovered from mountain areas lacks the weathering necessary to erode the thick skin of jadeite boulders, so most often, no glimpses into the material are possible without cutting into the stone. In Burma, the jadeite is gathered (quite a painstaking process), and is then brought to trading centers in major districts for auctioning and open sale. Mandalay represents the largest market for jadeite, among other things… “Burma’s largest jade market is in south Mandalay, a city that is said to operate on the three “lines” – white (heroin), red (ruby), and green (jade)” (Cummings and Wheeler, 1996). Most jadeite is sold and resold several times before it is ever touched by a saw, and most of the material being sold is unknown in quality. Once cut open a boulder could contain a fortune in quality jadeite, or it could be worthless. Many dealers play this high risk game of spinning the jade wheel. Fortunes have been made and lost in a single small boulder.

Fine jadeite has a consistent deep emerald green color. Most fine material is highly translucent with some approaching transparency. In November 1999 a bangle bracelet made of Burmese jadeite (50mm inner diameter) sold for over $2.5 Million. The highest price ever paid for jadeite was for a strand of twenty seven (27) 15mm beads. The strand known as the “Doubly Fortunate” commanded $9.3 Million in 1997.

Cummings J., Wheeler T. (1996) Lonely Planet Travel Survival Kit: Myanmar (Burma), 6th. ed. Lonely Planet, Hawthorn, Australia, 393 pp.

Gems & Gemology, Vol. 36, No. 1, pp. 2–26.

Lot of rough Burmese jadeite, note the reserve auction price in Euros.

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The 23rd annual Rio Tinto Argyle Pink Diamond Tender is around the corner. Bidding officially ends in 25 days, in what is possibly the world’s most exclusive diamond auction. You cannot simply sign up to become a bidder, you have to be chosen by Argyle, and even then the list is limited to 100 bidders. As always, the exact location of the tender isn’t revealed to the bidders until the last minute for security reasons. All bids are confidential, and winners will be notified in person by representatives of Argyle in October. Of course names of the future owners and the amounts realized at auction will remain confidential. This year there are 65 diamonds that made the cut to become part of the tender. Argyle states that this year’s tender “…promises to be a vintage year for collectors. Many of the 65 Argyle Signature Stones on offer are deeper and more vivid in colour than previous years”. On the menu this year are “…a number of spectacular purplish reds, as well as deep pinks, and a rare gray-violet”. Argyle produces around 30 million carats of rough diamonds per year, and only around 8,000 carats of these end up being polished pink diamonds. Of these, just 65 carats were deemed suitable for this years tender.

As we all know, red and purple diamonds are the rarest of all diamond colors (purplish reds are unimaginably rare), with red diamond prices historically reaching $1,000,000/ct. Purplish red diamonds are even rarer than simple reds. According to JD Boles, Director General of the British Gemmological Institute, the stone now known as the Supreme Purple Star (a purplish red), stated the stone sale price of around $4,000,000/ct. They are after all the world’s rarest natural objects.

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Oh boy… Where to begin… The recent GIA newsletter was not encouraging. Perhaps we should start by taking a look at how overzealous De Beers DTC sightholders tried to impress daddy earlier this year by buying up rough at insane prices to make themselves look better. Or perhaps we should look at how Argyle is in serious trouble after commencing an enormously expensive operation to convert the mine from open-pit mining to an underground operation. Even better, we might want to start by taking a look at the US economy lately, especially in regards to lowered consumer confidence in combination with a collapsed sub-prime market. Finally, diamond mining profits have dropped this year, as the decline of the USD (miners are paid in USD) against other world currencies, in conjunction with higher energy costs, more taxes and foreign policy. And if all of that doesn’t work, blame Canada.

Regardless of how we start to look at this situation, one thing is for certain, India is very concerned right now; and rightfully so considering they are the world’s largest diamond manufacturing center. Estimates are that India has $1 Billion USD in inventory sitting around right now that they cannot move (with additional inventories stored in New York, Hong Kong, and Antwerp). The overall market for diamonds in India and other parts of Asia are very good right now, but when the world’s number one consumer of diamonds (that would be the US) has an anemic demand for finished stones, this threatens to cripple everyone below that wrung on the ladder. According to GIA, a Surat manufacturer said rough that yields a carat or smaller finished stone is priced 15-20% too high for the current market; and that a major correction would have to take place before firms became profitable again.

On that note, it now costs more to purchase and manufacture lower quality rough diamonds than US retailers are willing to pay for the finished gem… Think back to Econ 101, that’s not a good situation for the manufacturer. Poor India, it gets better for them though right? Hardly. The Argyle mine in Australia, the world’s largest diamond mine by volume produced, is under imminent economic threat; so much so it is speculated that it’s parent company Rio Tinto has put the property up for sale (Rio Tinto has not commented). Considering that cutting centers in Ahmadabad, employ hundreds of thousands of cutters solely to manage the output from Argyle, India is concerned that the mine’s closure would leave hundreds of thousands jobless (it’s not like they can go down the street and work for another cutting center). Diamond cutters are a dime a dozen in India.

The De Beers DTC sightholders did not do the market a favor either when bidding each other up in price for diamond rough in tenders earlier this year. Apparently, they were trying to show an increase in the production volume their firms handled for the next sightholding term… not thinking about how they were going to liquidate the material once they obtained it. Pure genius at work there.

Finally, the US housing market scene and general overall economic decline has had an effect on diamond demand. According to the Consumer Board in August, “The number of consumers claiming present-day conditions are ‘good’ decreased from 28.3% to 26.4% in July, while those saying conditions are ‘bad’ increased from 14.5% to 16.3%.” In addtion: “Those especting business conditions to worsen within the next six months rose to 10.6% from 8.2%”. Surely, the collapse of the sub-prime housing market had no impact on consumer confidence right? People generally try and make the mortgage payment before purchasing diamond jewelry. Oh wait, they don’t do either? How strange.

Aerial view of the Argyle diamond mine.

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Before I go into a long tirade about this, let’s first examine the last major Thailand scam…

The last time the gem world was rocked by dishonest Thai dealers using atrocious practices targeted corundum, specifically sapphires which were subjected to beryllium diffusion. Beryllium diffused sapphires were released like the Great Flood upon the market into the hands of unsuspecting dealers. The problem was so great that it threatened to cripple the market for sapphires. Beryllium treatment is a process that replaces the trivalent aluminum in the crystal lattice with divalent beryllium. The color change process is very complicated, and due to this, other trace elements often give away a signature that can be detected. Without going into extreme detail (which would take pages to discuss), a brief example of Be treatment could be when: [Mg2+ + Be2+] > [Ti4+ + Si4+] a trapped hole of color is formed by Be2+ and Mg2+ to produce yellow color. If though instead you reverse this process so that [Ti4+ + Si4+] > [Mg2+ + Be2+], more donating electron ions exist to deform the trapped color hole and yellow color is not produced. Blue color can be produced in sapphires using the transfer of Fe2+/Ti4+. This practice lasted for years, even though gemologists could detect the process, many dealers passed the stones along unknowingly representing them as legitimate heat treated only or worse yet, natural untreated gems. For the most part this problem has settled down, but still rampantly plagues online auction venues such as eBay.

Now, in regards to Thailand and topaz… The industry has been aware of inexpensive colorless or light tan topaz being treated with Cobalt-60 radiation or X-Ray radiation that turns the stones into a lovely deep reddish/orange to deep pinkish-brown color. The purpose of this would be of course, none other than to defraud a buyer by making the material appear to be very costly precious or imperial topaz. The problem is, that with only 1 day’s worth of exposure to natural sunlight, the process is completely destabilized, and the material’s color washes out to it’s original color (or lack thereof rather).

The difference in price between common colorless/tan topaz and true imperial topaz is a difference between as little as $1-5/ct for common material and upwards of $1,000/ct for stones 10cts+ in size of super rich color imperial topaz. This practice has had an immense impact on the trade and is the equivalent of taking a direct hit by a 20 megaton hydrogen bomb. It is a seriously destabilizing move against the industry by fraudulent individuals.

This case has become rather personal for me, in that someone I am close to has been affected by this scam. The individual purchased a 30 ct+ topaz from a dealer that operates off of eBay. The material was represented as untreated and was sold for about $1000 for the stone. This unfortunately should have been the individual’s first clue, when the material was priced around $30-35/ct, that this could not possibly be the famed material from Oro Preto, Brazil that commands prices of $500-1000/ct in sizable stones. But regardless, this person was misled – as the material was represented by the dealer as untreated. Upon seeing this material, I immediately knew that something was dead wrong. The saturation was too deep, there were a couple bands of internal color zoning that are atypical of zoning formations of precious topaz, and it flat out just didn’t look right. Upon suspecting the worst, I gave my opinion on the material, and suggested that we subject it to natural sunlight. I took pictures prior to subjecting the stone to natural light. Unfortunately, I didn’t have any AA batteries available for my digital camera, so I used a film camera (hope the shots came out ok). When I develop the pictures I will upload them here.

The process was timed to expose the material for 8 hrs to direct sunlight. What happened within the first hour of exposure alone was horrifying… the material lost half of it’s color saturation. Within subsequent hours, the material lost more and more color saturation. What started out as a very deep gorgeous reddish brown topaz was reduced to barely a light tan stone within 5 hours. eBay is still a huge source, if not the number one source of this treated material. I can’t stress enough how important it is to know your source and know what you are buying and what treatments are out there.

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I’m Back!

Sorry for the disappearance over the summer. I should have tried much harder to update, and I’ll make sure that doesn’t happen again. Currently, I am working on the Diamonds and Diamond Grading course through GIA, after having completed the courses necessary to gain the AJP credentials over the summer. I’m hoping to get some laboratory time in here pretty soon… that would be nice. I’ve encountered some interesting material over the summer, and had some interesting conversations which I will discuss in a few postings immediately after this one.

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I apologize for not updating as regularly lately as I had said that I would.  I went to the Charleston, SC show this past weekend, and was unfortunately highly disappointed with the turnout of dealers and the lack of high end gem material, although I picked up several extremely nice mineral specimens for my personal collection.

On the upside, I will be attending the MASSIVE show in Franklin, NC this Thursday.  It is a wholesale only show, and requires proof of a resale tax license in the gem/jewelry trade for entrance into the show event.  In addition you have to get a wholesale dealer badge at the registration booth.  This has been beautifully arranged 🙂 …thank you… you know who you are!  This will be my first Franklin show, and I have heard great things about the event, which has a reputation of 3rd only to the international Tucson show event.

After the Franklin show I will be updating more frequently, and will finish my mini-series on ethics and appraising.

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Los Tres Amigos…

So my test batch of emeralds arrived yesterday. I’m not as fond of Brazilian emeralds as I am of Colombian stones, since they are rather unorthodox if you consider the Muzo mine in Colombia as the “only correct and acceptable locations” – which I do. I also do not like Zambian emeralds from a business perspective since they are worth only a fraction of Colombian emeralds of equal quality, but I enjoy them aesthetically… but I digress. I purchased a 4.00ct, 3.45ct, and 3.40ct as trial pieces (pictured respectively below). While the darker ones appear to be heavily included, these appear to be mostly surface blemishes as the pen torch has revealed. The color of the first and third stones is breathtaking under penlight, and once the stones are blocked and cut, the results should be really nice. Emeralds, you have been chosen… prepare to meet your cutter.

4 ct rough emerald3.45ct Brazilian Emerald3.40 ct rough emerald

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Yesterday, I visited the Houston Museum of Natural Science with my friend Daniel. Now, a permanent exhibit at the museum, is the Lester and Sue Smith gem vault. Located within the vault are a number of world class jewelry pieces and unset gem specimens. The most impressive being the largest cut aquamarine in the world, the “Dom Pedro” – from of course none other than the finest aquamarine mine in the world – the Santa Maria mine in Minas Gerais, Brazil. The stone is of the finest Santa Maria blue, and stands just over 14″ tall and is an obelisk styled gem. The original crystal weighed 26 Kg and was cut in Idar-Oberstein in 1992 by the gemstone designer Bernd Munsteiner. Seeing this one gem in person, made my entire trip to Houston worthwhile, for such a piece is truly priceless in all senses of the word. Also included in the Smith gem vault are other various beryls, such as aquamarines, heliodors, and emeralds each weighing hundreds of carats. A world class oval rubellite weighing the the several hundred carat range is also on display, as are massive tsavorite garnets and paraiba tourmalines of stellar color and clarity. Several exquisite necklaces, tiaras, and rings designed by Ernesto Moreira are also displayed. In the main hall of minerals, the museum showcases world class specimens of rough crystals of all families – from beryls to native elements, from corundums to topazes. At several points in touring the collections, I was emotionally moved beyond belief at what I was standing before – separated only by a few inches of space and glass. I highly recommend this museum’s exhibits to everyone who has an appreciation for the finest examples of nature’s artwork.

Courtesy of www.khulsey.com

“Dom Pedro” Aquamarine

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