VOL. 20, #1, Spring, 2002
New Neon Blue Tourmaline, Tucson 2002 Report, Tsavorite Update, Mike Scott's Portfolio, Auction Update, International News: Burma, Gemstone Price Trends 1975-2001, Book Review: Stone of Heaven
By Robert Genis
Once upon a time tourmaline was the ugly stepchild of the gemstone world. Even the relatively inexpensive garnet family had the desirable green demantoid, which always sold for thousands of dollars per carat. Until the 1990's, the most expensive tourmaline on the market had been the chrome tourmaline. In addition, there was a small supply of gem quality Ouro Fino, Brazilian rubellite on the market for a short time in the early 1980's. These were the only two tourmalines that had ever traded close to a thousand dollars per carat in larger sizes. In fact, most tourmalines today still trade in the low hundreds of dollars per carat range.
Then, in 1990, dealers were shocked when Brazil's Paraiba neon tourmaline hit the market at the Tucson Gem Show. At that time, two or three carat sized Paraibas could be purchased for $1000 per carat. Many dealers were overheard saying they would never pay that much for a tourmaline, or the material must be irradiated because it looked too good to be true. Today, gem dealers longingly tell stories of the material they could have or should have bought in the early days. After the labs decided the material was heated, but not irradiated, the goods took off. In the current market, $10,000 per carat is a common wholesale asking price for carat sized, neon fluorescent blue and green Paraiba gemstones. Now, a new Nigerian blue tourmaline has entered the marketplace and it just may be the next tourmaline sleeper.
Mining and the Paraiba Connection
According to Constantin Wild of Constantin Wild & Co., Idar-Oberstein Germany, "The Edoukou Mine in Oyo (Nigeria), close to the border of Benin, produces a new variety of gem-quality tourmalines which owe their special color to the trace elements copper and/or manganese. This special color was previously only known by the legendary Paraiba tourmalines from the state of Paraiba in northeastern Brazil. In the past, it was only necessary to show the detection of copper in the spectroscopic analysis to confirm a tourmaline originated from Paraiba. Today, it could also be from Nigeria. The characteristics are the same due to the similar geological environments of Nigeria and Brazil, which once belonged to a single landmass."
There are some dealer discrepancies with this material regarding treatment, or perhaps dealers are treating the rough differently. According to one New York dealer, "We are not treating the rough material we bought." Some of the Russian dealers emphatically state they are not treating the material. Still other dealers claim treatment is how you get the neon-like colors. According to Wild, "The color of this new tourmaline varies between blue-violet to amethyst color, which is predominantly caused by manganese. To reduce the manganese absorption by heat-treatment produces a blue color to the stone which is comparable with the typical aquamarine color. Continued heat treatment further reduces the manganese absorption and results in a mint-green color." It is probably safe to assume the material is treated at low to moderate temperature levels to obtain these colors. There have been no reports that the material is being irradiated.
The new Nigerian mine has not produced the saturated neon colors of the Paraiba yet. However, these stones have an electric color not seen in any other tourmaline presently on the market. In the best case, Nigerian blue tourmalines are an intense blue like an aquamarine, but without grey. The few stones we have seen appear bluer in the sunlight and greenish-blue under incandescent lighting. As a general guideline, the best color is blue, followed by blue-green, and finally green. Top gemstones should be flawless and German quality cut. Ideal tone is medium to light.
Brief Price History
When the first production hit the international market last year, it was common to see 4-5 carat sized blue tourmalines with ultra-high asking prices of $3000-$5000 per carat. Subcarats were being offered at high prices, also. However, the asking prices at the Tucson Gem Show 2002 were a more realistic $3000-$5000 per carat for large, perfect gemstones over 10 carats. Carat sized blue tourmalines are now trading for $1000+ per carat. According to one dealer, "This new material will find its own level. However, keep in mind the material is rare because there is a limited supply of goods."
Some dealers are marketing these goods as Glacier Blue or Indogo Tourmaline and according to one, "This stone is on fire in Japan." However, the material might be so rare that the market can only be collectors or fine jewelers with clients who want the latest hot gemstone.
Many dealers are touting Nigerian blue tourmaline as the next Paraiba. On the other hand, at this year's Tucson Gem Show, disparaging comments could be heard regarding the material. The same type of comments heard a decade earlier about the Paraiba gems. Is history repeating itself? One dealer summed it up, "The market needs a new gemstone to get excited about. This new gemstone bears watching, we will soon discover if it is the next Paraiba."
Although not as neon as Paraiba, these exciting new colors are more vibrant than most gemstones presently on the market. They seem like an interesting speculation since the gems sell at approximately 10% of the current price of a Paraiba. This gemstone is probably for clients with serious portfolios, not the first stone you would collect.
Below is a sample of the AGL Colored Gemstone Grading Report for the new Nigerian blue tourmaline.
The Tucson Gem Show has expanded to 34 shows lasting 20 days. The first show began on January 29 and the last event ended February 17. Most promoters and dealers reported attendance was equal to or down from last year.
Many dealers came to the gem show with low expectations due to the softness in the economy and the international terrorist threat. However, they expressed mixed results from the show. Many claimed the show was the best ever while others lamented their sales were down by 40%. The vast majority of dealers had sales plus/minus 10% from last year's show.
Local luxury resorts and hotels reported occupancies were off 6.6% this year compared to last year. Overall, room vacancies were down 2.35% in Tucson and average room rates dropped by 1.2%. The Tucson Gem Show did bring a spike in business, but buyers stayed a shorter time.
Here is how some of the most traded gemstones fared:
By far, the vast majority of ruby seen at the show was heated and/or fracture-filled Mong Hsu material. Millions of dollars of heated Mogok Burma and Madagascar ruby was also evident. The rarest, and seldom seen, was unheated "Classic" Mogok material and also the new, but limited, production from Nanyarseik. Prices for these unheated goods remain strong, even in face of a worldwide recession. The prices reflect the overall scarcity of the material and steady demand.The Burmese government has finished a study of Nanyarseik and has decided not to mine it as a government venture. They concluded the mines are not economically viable, and instead will sell licenses to private miners willing to take on the risk. The Nanyar material at the show was not "stoplight" red but rather, in the best case, an electric red/pink. The material also occurs in hot pinks and even purples. The goods are beautiful and top gems are selling for $3500 per carat and up.
Dealers report the production in Mogok remains dismal and the flow of material seems to decrease monthly. The twice yearly rough auctions held by the Burmese government have turned into a once-a-year event because the mines are not producing enough material to make holding two auctions feasible. Regretfully, this is the production from the seven top producing mines in Mogok.
It has also been reported some dealers are "importing" Madagascar ruby material and trying to pass it off at Burma prices to visiting buyers in Yangoon.
There were significant inventories of emeralds at the show. The vast majority of the goods were commercial quality. Asking prices remain surprisingly high considering the declining interest in this gemstone. According to ColoredStone, January/February, 2002, emerald has fallen from third to fifth place at the retail level for colored gemstone sales.
Blue sapphire remains the hottest colored gemstone. There was a good supply of heated Sri Lankan and Madagascar blue sapphire at the show. Prices are stable. Gem quality, unheated Ceylon, Kashmir and Burma sapphire remain rare. One dealer had a beautiful unheated, fifteen carat, Burma gem blue sapphire.
Colored diamonds at the Tucson Gem Show were displayed at the Manning House. Buyers were looking for top pinks and blues for their connoisseur clients. This market remains strong. Collectors seem to want the best colors irrespective of price. A dealer displayed a substantial inventory of pinks and blues.
Nanyar, Burma red spinel debuted at this year's show. It is a color not seen in years from Mogok and unlike any other spinel on the market. Interestingly, the color of the spinel material mimics the Nanyar ruby material; in the best case it is red/pink. It also occurs in bright, diamond-like pinks and purples. Prices are high, with the best material selling for $1500 per carat in carat sized gems. The largest top quality Nanyar spinels are only 2 carats. One dealer had a three carat rough Nanyar spinel he wanted $1200 per carat for. Although these prices may seem high for spinel, the Burmese dealers contend Nanyar spinel is to spinel what Paraiba is to tourmaline or demantoid is to garnet.
Mandarin Orange and Spessartite Garnet
The supply of orange mandarin garnets is down because the mine has been closed. However the owner plans to reopen the mine soon. There is a fair amount of subcarat material available, but stones above a carat are rare. The supply of Nigerian spessartite garnet is also dwindling, with the brightest orange-without-brown material long gone.
The tanzanite market is suffering due to "bad press" and an oversupply of material. Prices were already weak before the Wall Street Journal and ABC News stories. Tanzanites at this year's show were being offered at a 30-50% discount from last year. It is too early to tell if this price drop is permanent or temporary. The US Department of State, following a summit at the show, declared there is no present link between tanzanite and terrorism. In response to past allegations that the tanzanite trade benefits terrorist organizations, the Tucson Tanzanite Protocol was formed in Tucson on February 9. The steps outlined in this proposal include implementing a system of downstream warranties for traders who buy, sell, cut, polish, set or otherwise trade tanzanite. An analysis of the tanzanite market will be conducted to determine what improvements can be made to prevent abuse, and a mandate will be issued requiring traders only to accept tanzanite that is accompanied by a written warranty. The purpose is to implement actions aimed at protecting the legitimacy of tanzanite.
In more bad news for this gemstone, a wrongful death lawsuit has been filed by wives of Cantor Fitzgerald employees, a New York police officer and the father of a New York firefighter against dealers of tanzanite. The suit alleges ties between the trade of the gemstone and Osama Bin Laden. Filed in federal court in Manhattan on February 14, it seeks an injunction banning New York dealer STS Jewelers, Inc. from selling tanzanite and forcing the company to donate past tanzanite proceeds to a September 11 relief fund. The suit also seeks $1 billion in compensatory damages from several other defendants, including the Tanzanite Mineral Dealers Association (TAMIDA).
Tsavorite production remains small. Only two dealers at the show even specialized in gem quality tsavorite. Prices are stable. The present production is primarily too dark or too light in color. Recent reports indicate Tanzania has surpassed Kenya as the main producer of tsavorite. A few outstanding examples of Russian demantoid garnets were seen at the show.
There were large supplies of Madagascar diffused pink/orange sapphires at the show. These pink gems are coated in borax and heated at high temperatures with oxygen. After treatment, they resemble a fine padparadscha color, but the color of the stone is confined to its surface. These stones range from $100 to $1000 per carat. We did observe a fine, untreated, natural 7.06 Sri Lankan padparadscha at the show and also a rare and unusual, unheated 3.87 padparadscha color sapphire from Burma. Due to the new treatments, it is critical to have a well known laboratory report when buying any padparadscha or stones claiming to be padparadscha material.
Brazilian Paraiba tourmaline supply remains dismal. A subcarat neon blue tourmaline was offered at $8000 per carat. We saw a few carat sized stones which were poorly cut with windows and eye visible inclusions for $9000 per carat and up. The few larger five carat Paraibas at the show ranged between $15,000-$18,000 per carat. The newest hot stone was a gem-quality blue tourmaline from the Edoukou Mine in Nigeria. Once thought of as a semi-precious gem, Brazilian Paraiba and Nigerian blue tourmaline varieties have now vaulted themselves into ruby, sapphire and emerald price territory.
|The star attraction of the show was the "Diamond, Gold, and Silver Backgammon Set" by Bernard Maquin. The set is mounted with 61,082 black, white and yellow diamonds weighing 2171.48 carats. It also contains 6.77 kg of gold and 150 grams of silver and took more than 10,000 hours of labor to produce. Price for game players? A cool $1.5 million.|
Regarding trends in the colored gemstone market, prices are firm for most gems. The only exception is tanzanite. The supply of fine gems is declining and demand is rising again due to rising consumer confidence. A gem dealer said, "According to our market forecasts, we came here expecting to find extremely weak prices. We came here with a fist full of cash to buy at discounted prices. We did not find any bargains."
AFRICA'S SECRET TREASURES, TSAVORITE FROM KENYA
By Dipl.-Ing. Bernhard H. Mueller
This report was submitted for publication by Bernhard H. Mueller, a German businessman who recently had the opportunity to visit the tsavorite mines. Thank you. ED.
"Everyone knows about precious diamonds, rubies or emeralds. But only the real experts know about tsavorite. Tsavorite is also called green grossular garnet. It is a rare gemstone mined in the Kenyan part of the Mozambique belt. Even if you search the Michelin map of east Africa with a magnifying glass, you will not find a mining symbol northwest of Mombassa where the tsavorite mine is located in the Tsavo National Park close to the Tanzanian border. Tsavorite, the trade name for green grossular garnet, was named by Tiffany & Co after the location, where it was first discovered by the Geologist Campbell Bridges in 1968.
Tsavorite has a vivid green color with a high refractive index and double the dispersion of emeralds, giving tsavorite potential greater brilliance. It has a garnet's durability and high clarity. The geology which produces tsavorite is graphitic gneiss, rich in calcium from seams of marble which lace through them. Tsavorite is often found in pods with a coating of quartz or scapolite, which the miners call "Potatoes". The green color is due to the vanadium from the host rock, but some tsavorite is also colored by chromium. It is very rare to find tsavorite bigger than 5 carats because the heat and pressure which formed tsavorite millions of years ago shattered most of the crystals. 85% of the mined stones are smaller than 1 carat, 10% are bigger than 1 carat, 2.5% are bigger than 2 carats, 1% is bigger than 3 carats.
A major producer of tsavorite is Aqua Mines with an office in Nairobi. The director from Aqua Mines, Mr. Mugo, was so kind and gave me the opportunity to visit his tsavorite mine and collect first hand information about tsavorite and its mining. The 3000 acres are located in the Tsavo National Park near Kasigau. The exact location of the claim is indicated by markers called beacons with numbers and bearings.
On my first day at the Aqua mine I was shown around by the operations manager. The mine manager, Mr. Kibathi, was very cooperative and explained to me more about the operation and details of the tsavorite mining. At the moment the Aqua mines employ 25 workers. The miner's day starts at 7:00 AM and goes until 3:00 PM. When the miners leave the pit, security guards come in and stay till 07:00 AM the next morning to protect the mine and equipment. The miners get free housing, food and a good salary with bonuses. The camp's electricity is produced by environmental friendly solar panels or a generator. A nearby Canteen provides entertainment in the evening.
Only a part of the mining area is used at the moment. We visited a green garnet open cast mining area. On the site the miners dig a trench and remove the top soil. They shovel the material through a sieve and examine the gravel for tsavorite. If they find a high concentration of tsavorite they bring in a big compressor to power the jack hammers and drills. Ammonium nitrite is used as an explosive to remove and break the hard rocks, then it is easier to remove them to reach the vein. To avoid damage to the vein, the explosive carrying holes must be 4 feet or further away from the vein. Depending if you use manual labor or heavy machinery, you space the blasting holes. Wide spacing of the 4 cm big blasting holes produces bigger rocks which can only be removed by heavy machinery. If you use manual labor you space the blasting holes closer together. This results in smaller rocks which are easier to remove by hand.
If the miners find a vein that is producing good quality stones, the miners follow it down. The caves they dig from the bottom of the main pit down into the rock are called amigos. The amigos go down toward the east. Therefore, I decided to go out in the afternoon to take some photos and take advantage of the color-enhancing long red rays cast by the descending sun illuminating the entrance. But an overcast sky stopped the outside photo session, so I decided to explore an amigo in a pit 300 meters east of the "Penny Lane" area. This amigo yielded good quality 0.9 gram tsavorite at 15 feet down. The southern amigo goes down to 90 feet and is not only the local bat palace, but also hosts a big scorpion at the bottom. But what makes this pit really interesting is the fact that it produces good quality tsavorite in very close proximity to the "Penny Lane" ruby mining area.
Another tsavorite open cast mine with an amigo is 1.7 KM south of the camp. The amigo at the moment is 36 feet deep and the rock layers change angles from 55º at the top to 35º to 50º at the bottom. At 36 feet we found 2 pockets of tsavorite "Potatoes". It is a very exiting moment when you dig for 6 hours in a half dark, dusty and loud environment without finding anything, and then you suddenly see a beautiful green shining tsavorite smiling at you.
Listening to the operation manager and accompanying him during my stay was 100 times more interesting than my geological classes at University. He taught me a lot of tricks for successful mining not described in the books. For example, he points out that the "Umbrella tree" needs graphite rich soil to grow. Tsavorite is found in the vicinity of graphite gneiss and crystalline limestone. Therefore prospecting near an Umbrella tree is usually very successful.Mining tsavorite requires a lot of resources. It takes a lot of miners and equipment to yield only a few gemstones. Water must be bought and brought in by truck. This is a whole day job for a lorry and driver. Therefore the present price for tsavorite is far below its real value if you consider rarity and beauty.
If you are interested in collecting or dealing in gemstones, but are scared off by blood diamonds from Sierra Leone, tsavorite from Kenya is the perfect gemstone to buy. They are mined in commercial operations by owners who respect human rights. The projected future availability of tsavorite is not optimistic, which indicates the potential for significant upward price movement very soon."
Collector extraordinaire Michael Scott was one of the original founders of Apple Computer. For the last 20 years, his mission has been to collect the finest gemstones in the world. His collection will be on display from February to March at the Bowers Museum in Santa Ana, CA and from June to September at the Houston Museum of Natural History. Some of the main gems he has collected include a 10 carat "stoplight" red Burma ruby, a 64 carat Sri Lankan sapphire, a 16 carat Sri Lankan padparadscha, a benitoite necklace, a red beryl from the Wah Wah Mountains in Utah, and a 242 carat tanzanite. Another major part of his collection includes suites. For example, a suite of all tourmaline colors, including blue and green Paraibas, a suite of sapphires and rubies exhibiting all the colors, a suite of garnets in all colors except blue, a suite of diamonds, including red and a suite of beryls. He also collects large crystals, such as a 1,730 carat Burma ruby crystal and he owns the world's largest faceted gemstone - a 500,000 carat quartz sculpture.
The major recent auctions were held in St. Moritz on February 2, 2002 by Christie's and Sotheby's. A heart shaped, VVS1, fancy intense blue diamond sold for $287,000 per carat. A 1.10, rectangular, fancy vivid blue fetched about $130,000 per carat. A 3.53 Burma ruby sold for about $19,000 per carat and a 6.38 for almost $27,000 per carat. Two six carat Kashmir blue sapphires sold for $22,500 per carat and a 14 carat Burma sapphire fetched about $13,000 per carat. A 5.07 Colombian emerald only sold for $4300 per carat.
Burma Coup Fails
The 1962 coup by General Ne Win closed Burma off to the rest of the world. He presided over its decline into isolation and poverty until he stepped down in 1988. Or did he? Recent reports indicate Ne Win's forces may be regrouping.
In early March, Burmese authorities arrested the husband and three sons of Ne Win's daughter and accused them of plotting to overthrow the government and install a puppet regime. By late March, Burma's military government was interrogating more than 100 people about an alleged coup plot by the family and friends of Ne Win. Ne Win and his daughter, Sandar Win, had not yet been questioned, however, they are under virtual house arrest. The homes of Ne Win and his daughter, which occupy the same compound in Myanmar's capital, are being barricaded by security forces. Burma military intelligence stated in a news conference that relatives of Ne Win had hoped to set up a dynasty which would keep their family in power for generations. The suspects being questioned by the Burmese government include private security guards employed by Ne Win's family, members of the military and a well-known expert in black magic who was hired by the conspirators for astrological advice.
The Burmese government showed evidence of the coup by displaying satellite telephones, rubber batons, mine detectors, army uniforms, badges and berets from Sandar Win's office. Ne Win is reported in "good health" and is being cared for by Sandar Win. He had a pacemaker implanted last year in a Singapore hospital.
Some foreign diplomats are skeptical a coup was planned, saying the allegations and arrests may stem from disagreements in the government over how to deal with opposition leader Aung San Suu Kyi. Other experts contend the alleged coup was simply a bid by hardliners to gain the upper hand and halt any suggestion of the easing of military rule. General Than Shwe, the leader of the military junta, was seen publicly on March 26, 2002 in a show of government stability.
The Stone of Heaven
by Adrian Levy and Cathy Scott-Clark
Little, Brown and Company, London
408 pages, 2001, $24.95
"The stone of heaven was a commodity worth more than pearls and stocks and like colors of jade, its collectors are legion."
The authors beome intrigued with jade when a jadeite necklace sells at Christie's for almost $10 million in 1997. Levy and Scott-Clark are London Sunday Times investigative reporters. They researched long forgotten documents in Indian archives to track their story and this book is the result of their obsessive chase for the mysterious "Stone of Heaven". The story is part investigative journalism, part travelogue. If you never understood the world's obsession and fascination with jade, read this book. Unlike many dry gemstone books, this is full of tabloid gossip and sensational stories about jade and sexual peccadilloes.
It was not until 1863 that the mineralogist Damour called the new green stone jadeite, which is superior to the more common nephrite. During the 1870's, the West started collecting jade, including such notables as J.P. Morgan and Alfred Nobel. Later the rich and the famous obsessed over the stone and the most well known collector was bad-girl Woolworth heiress Barbara Hutton. The book tracks many famous jade pieces as they appear and reappear for sale on the international market.
The story begins in 1735, with the jade-obsessed Chinese emperor Qianlong. Rather than a mere historical record, the authors make you believe you are in the Forbidden City and 18th century Burma. Their writing makes the quest for jade understandable as the international interaction between the players unfolds.
You can read about China's foray into Burma and how that relationship still exists. According to the authors, the Chinese control 70% of the Burmese jade mines today. A spellbinding tale is woven by three British explorers on a six month trek into Burma in search of the jade mines. Read about the plundering of China by the French and the British during her political troubles in the 19th century. The jade treasures are plundered again during the Boxer rebellion. Read the tale of the last emperor of China and how an empress was literally buried in precious stones.
An excellent account is also told of the British conquest of Burma when King Thibaw was exiled to India. The second British trek to the jade mines, or "Valley of Death", also ends in disaster. Read the fascinating tale in the chapter, "Whore of the Orient". It is about the Chinese gangsters, adventurers, political and diplomatic figures and jade entrepreneurs who partied in Shanghai during the 1920's and 1930's.
The story also weaves its way through the second World War when Japan conquers Burma. You can also learn how Ne Win came to power in Burma after the war. His real name was Shu Maung, a post office worker with right wing views and a reputation for women and gambling. He changed his name to Ne Win, "brilliant like the sun".
Another interesting tidbit was about the Chinese Communists who rebuilt their county after the Civil War with the profits from jade, all the while dismissing the stone publicly as a brash Emperor-linked novelty. Obviously, jade affected everyone, including the Chinese - Chiang Kai-shek and Mao both looted the Imperial Court's treasures.
Eventually, the authors pose as gemologists to visit the secret jade mines in Hpakant, Burma. They reach their goal through bribery and guile. What they find when they get there is horrifying to them.
You can purchase this book on-line at Amazon.com.
The information provided in this newsletter has been derived from research and sources believed to be reliable. However, no guarantee is expressed or implied as to their validity. Opinions included herein are subject to change without notice. The gem market is speculative and unregulated. Certification does not eliminate all risks associated with the grading of gems. Recommendations are meant for those who are financially suited for the risks involved. Past performance is not a guarantee of future performance. Neither NGC nor The Gemstone Forecaster guarantee a profit or that losses may not be incurred as a result of following its recommendations. They may also hold positions in areas they recommend. Subscribers should not view this publication as investment advice, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security.