VOL. 21, #2, Summer, 2003

Collecting Russian Demantoid Garnet, GemEwizard Color Grading System, Notable Quotes, International Gem News, Collectors Corner, Gem Thieves, Auction Report, In The News

  Jun 24, 2003   admin


Collecting Russian Demantoid Garnet
by Robert Genis


One of the rarest and most sought after colored gemstones has always been demantoid garnet. The beautiful green gem was first discovered in the Urals of Russia in 1886 and has not been actively mined since the Bolshevik revolution. The Czar’s court was obsessed by the rock, and Fabergé utilized the stone in his precious objects. Demantoid derives its name from its diamond-like luster. In top qualities, this gem is greener and more saturated than any green diamond. George Kunz, on leave as buyer from Tiffany's, was financed by J.P. Morgan to buy all the demantoid he could find. The stone became the darling of the British and French aristocracy in the late 19th century. Many Victorian pieces of jewelry made between 1886 and 1915 possess small demantoid garnets.

The new Russian demantoid is from the Klodovka Mine near the village of Ekaterinburg. The find is actually the rediscovery of the original demantoid mine from the 1800s. The Russians started searching for the “ lost” mine in May, 2002. Due to the harsh mining conditions, the mining season lasts only 3-4 months. By July, they were getting ready to quit when suddenly they discovered a vein of the bright green gem nodules. Their mining technique is extremely primitive. A couple of back hoes, but basic manual labor, chisels and hammers represent “state of the art” Russian mining production. Presently, the mine area is 200 meters by 100 meters by 20 meters. Further, the area is densely overgrown forest swampland.

There was a larger find in Russia in 1998, but the quality was not as high as these new goods.

Ideal Demantoids/Horsetails
Similar to emerald, different people disagree what colors create the the ideal demantoid. Of course, the gem must be a pure vivid green. Some dealers believe a hint of blue secondary is preferred, and others want stones with a yellow secondary color.

One interesting factor in Russian demantoid garnets is almost every demantoid has radiating needles that often appear like a "horsetail" inclusion. Gemologists are still researching what makes up the inclusion, and it remains somewhat of a mystery. The inclusion is prized by gem collectors because it identifies the gemstone as Russian. This is one exception in the gem world where an inclusion is actually a positive attribute. It is fine to have an eye visible horsetail. What you do not want is a horsetail that is so obvious it detracts from the beauty of the stone.

Brief Gemology
Demantoid is from the andradite garnet family. It is thought to be colored by a combination of iron oxide and chromium. Demantoids are 6 1/2-7 in hardness and are very durable stones. The demantoid also has tremendous brilliance. This is probably due to its high refractive index. Demantoid garnets are also mined in Namibia, Iran, Italy and Mexico.

Garnets are assumed to be one gemstone that is not enhanced in any manner. However, some dealers contend garnets have been heated for a 100 years by the Russians. It is said to be a low temperature procedure that drives out the secondary brown colors.

Prices /Sizes/Shapes
Demantoid tends to be found below a carat. Approximately 80% of the new production is less than 2 carats. Below 1/2 caraters are available from $200-$400 per carat. From .50 to 1.00 they range from $400-$1,000 per carat. A one carat demantoid is exceedingly rare. Carat size stones are priced between $1,000-$4,000 per carat. From 1.50 and up gem quality stones start at $5,000 per carat level. Exceptional stones may be higher and individually negotiated. The new production may yield 500-1,000 carat sized demantoids or above. The largest new stone mined to date is 6 carats. The largest gem quality specimen known to exist is only 8 carats. Most of the goods are rounds, cushions and ovals.

The top markets in order of importance are Japan, Europe and finally America. The demantoid niche is primarily for knowledgeable collectors and jewelers. This is an excellent choice for clients who want a green stone or who were born in January. This new production may also present a perfect opportunity for manufactures to utilize the smaller goods in a jewelry line or suites.

Demantoid Competition
The new material will directly compete with the relatively new demantoid find in Namibia. As a general rule, the African material is not as vivid as the Russian material, and the goods do not have horsetails. The material also will compete with tsavorite, the other green garnet. Tsavorite is slightly less expensive, but the production of gem quality tsavorite has been dismal for years. Of course, the new Russian material will also compete with emeralds. Why own a treated emerald when you can collect a rare demantoid garnet that is not enhanced?

Once seen as rare as Kashmir sapphire and Russian alexandrite, now may be the time to buy this beautiful unenhanced green garnet. Who knows how long this production will last, or if it is simply a flash in the pan? Remember, the Brazilian alexandrite and Brazilian Paraiba tourmaline production was short-lived. Those who bought first made out like bandits. An appropriate axiom for mining is the best usually comes out first. Although the Russians believe they will be able to follow the vein for another 100 years, experts contend the Russians will be lucky to get one more year of production. If you thought demantoids were long gone, now may be a perfect opportunity to own the imperial green stone of the Russian Czars. Once, the only way to buy a demantoid was from a collector, an auction house or an estate sale. The new production presents a unique opportunity.


GemEwizard Color Grading System
by Robert Genis

The colored gemstone trade has been struggling with how to communicate color for decades. The theory has always been if the colored gemstone industry had a universally accepted grading system like the diamond dealers, trading in colored gemstones would expand exponentially. The industry has been divided into two camps for years. One group insists grading colored stones can never be accomplished. With the myriad of colors involved in a single gemstone, they contend it is an impossible task. Further, they argue who would be the final arbitrator of which color is best? The other group always felt is was simply a matter of time before the industry could effectively communicate color. Many yearn for a “magic black box” created by modern technology that is accurate and reproducible.

Historical Perspective
The proper way to grade color has never been agreed upon by the gemstone trade. All of the systems today have their proponents and detractors but are often used by appraisers and gem dealers. The Gemological Institute of America (GIA) started the ball rolling with its ColorMaster machine, but it was discontinued years ago. The ColorMaster never really could reproduce the actual colors of gemstones. The GIA recently quit marketing the Gemset-324 plastic molds based upon the Munsell system of colored notation. Again, these sample hues looked nothing like real gemstones. Howard Rubin’s Gem Dialogue has been on the market since the 1980s, and it is basically a series of transparent color scale charts. Gem Dialogue scale charts also do not look like real gemstones. The most accurate system devised was American Gemological Laboratories (AGL) Color Scan. These cards created a 3-D visual effect that looked like real colored gemstones. Owning these cards is like having a set of master stones in your back pocket. They work in the bright sunlight of Bangkok and the clouds of Bogota. Regretfully, these cards have not been produced for years. This unavailability does not help bring new converts into the AGL grading system.

GemEwizard’s Turn
The newest player in this game is GemEwizard. The program was developed over four years by Israeli gem dealer Menahem Sevdermish and is being distributed by Stuller, Inc. of Louisiana. It is a color simulation technology utilizing computer software. The program is $495 with a monthly fee of $39. GemEwizard's gem color communication theory is based on the colored stone grading system taught by the GIA. GemEwizard was developed from a database of more than 11,000 digital gem images. The developers state the program can display almost 1,300 gem colors directly on a computer screen and nearly 20,000 recreated gem images. GemEwizard claims a new version of the software created for gem laboratories will increase the number of gem color depictions to 120,000.

How GemEwizard Works
Although not for the technologically disadvantaged, loading GemEwizard is simple and just like loading any other piece of software. Simply insert the Gemewizard CD into your computer’s CD-ROM drive and follow the instructions.

Once you get to the main page, you will see information relating to a colored gemstone’s weight, color, grade, clarity, shape, cut and price. A small box in the right hand side of the screen discusses the selected gem’s story including legends and lore, data on treatments, color and origin. You can use a drop down list to search for gems ranging from amethyst to tourmaline. You can also change the shape of the gemstone you are viewing with a simple mouse click. Once you choose a gemstone, a color ruler will appear showing various qualities of the specific gem. By clicking the quality you want, the gem’s grade and color code information appears. The best part of the program is you can change the appearance of the gemstone you are viewing. With drop down menus, you can alter a gemstone’s hue, tone and saturation. Impressively, you can actually see the stone change on the computer screen as you alter a gem’s characteristics.

Too complicated? You can also simply request gem, AAA, AA, A+, A or B qualities.

You can also search for gem by weight and price. You can search Stuller’s inventory and theoretically, if enough gem dealers were on the system, you could search the entire world inventory of stones.

GemEwizard Real World Test
Although not scientific by any means, I decided to test the new system on various computer screens with real gemstones in different lights. My goal was reproduce the colors of real gemstones exactly on my computer screens.

I started with a 30-day-old Hewlett-Packard (HP) laptop, figuring this would be the simplest and most accurate. The results? I could not reproduce the colors exactly on the HP computer screen. In some cases, I got pretty close but in the vast majority of cases, I was not able to reproduce the colors to my satisfaction. By taking the real stones and HP laptop to different lights, the situation got even more complicated. The images that I thought looked most like the gemstones now needed to be changed again. The situation deteriorated further as I changed computer screens. For example, on my new HP, the tanzanite colors looked too purple but on my two year old Apple monitor, tanzanite looked like amethyst.

Attempting to reproduce perfectly a three dimensional object onto a two dimensional computer screen is virtually impossible. This is not even getting into the thorny issue that many colored gemstones have various areas of different colors. GemEwizard is not even programmed to deal with this reality.

The only theoretical way for this system to truly work as an international trading vehicle is to have all the users using the same computer screens. An agreed upon lighting source that mounts on the computer would be ideal. Finally, computer monitor color calibration software should be included with the software.
Despite the program weaknesses, it has to be better than calling your local dealer and asking for AAA quality. The system may work accurately enough for inexpensive semi-precious gemstones. The real weakness of GemEwizard is with high-end gemstone qualities, where minor variations can mean thousands of dollars per carat differences.

Although not perfect, this is an admirable attempt to standardize colored gemstone grading. The market will be the final judge on whether GemEwizard will be as important to gem dealers as a microscope. If we see gem dealers in Bangkok with their laptops open and screens flickering as they are viewing stones, we will truly know the gem world has changed.

Computer savvy jewelers, appraisers and gem dealers might want to check this program out. The program has a strong “eye-candy” appeal plus a Diamondmode for trading diamonds, too.

Notable Quotes
Colored Stone, May/June 2003

“There definitely seems to be more demand for nicer goods. I think we’ve been starting to see people looking at gems again as a good place to park their money. There’s the same sense that any customer may as well buy a good quality gem...I do think people think this is better than the stock market.”
John Bachman

The Guide, Gem Market, May/June 2003
“Unheated Burma ruby is one area that advisors suggest is poised to move up quickly in price, when economic conditions improve.”

The Billings Gazette, May 18, 2003
“Talking to almost any of the collectors, it becomes clear that gemstones and minerals are a fascination.”
Billings, Montana Gem and Mineral Club dealer chairman, Mark Lent

Wall Street Journal, May 16, 2003
“Gentlemen, here’s a new reason to fear commitment: ring inflation. Even in these times, the benchmark diamond has crept up, from a single carat in the 1990s to two or three today.”
Lauren Lipton

International Gem News
Special Burma Report

(Here is a special eye-witness report on the latest events in Burma. The author wishes to remain anonymous. Thank you. ED)

Banking Crisis
I just came out of Burma, and the situation is...how should I say...fluid. The withdrawal limits from banks has been changed several times. First, it was 500K per day (in kyat). Then 100K per day, to 100K per week, to what it is now: 100K per fifteen days.

Business of all types has come to a halt. Business owners can't make payroll, so staff is either being sent home, or going home on their own. So far, transport companies are still in business, so food is getting to the big cities, but this might change. If this changes, the whole thing changes.

The government is printing money as fast as possible to re-stuff the banks, and so far the kyat is holding steady. I can explain this seeming inconsistency. Burmese have kyat liabilities (food, rent, salaries for staff, etc.), and hold liquid assets in dollars. Bank accounts, which are in kyat, are not liquid because of the withdrawal limits, so folks are spending the cash they have. Since this is dollars, the kyat has strengthened (as they exchange dollars for kyat, the supply-demand equation changed).

The Burmese government is also trying to limit the inflationary effects of the kyat printing by asking banks to hand over names and amounts of all large accounts. The government is then asking the account holders to justify how they got all the money. If they can't produce business receipts, the government is "taxing" them 50%. Unfortunately, even legitimate businesses are cash businesses, and receipts are never written up. Of course, very very large accounts are probably protected.

Other folks are selling their bank accounts to brokers at a 25% discount. The broker pays cash, discounted, for an account, and the account holder transfers the unobtainable bank funds to the broker's account in the bank.

All in all, this is not good. The lowest strata of society is hungry. They were living payday to payday anyway, and now their boss can't pay them so they can't buy food. The middle class has savings, but can't get at them. Senior levels of the government already expect something worse than 1988, and many are already sending their families out.

As for gems, the Burmese have a funny way of doing things. When the kyat weakens, the dollar price of gems is adjusted upward. When the kyat strengthens, the dollar price is also adjusted, but upward. So, it's either up, or up.

There are some spectacular pieces available for sale, but at unreasonable prices. I don't know if these are new pieces, or are just coming out now due to the kyat problem. Even bread and butter pieces are wildly priced. I saw a beautiful piece of pure red spinel rough, in tetragonal crystal form, which my cutter would turn into an outstanding 3 carat stone. The asking price for the rough was $15,000. There's a $2.5 million piece of sapphire rough that might even be worth it. I also saw a nice crystally 3 carat Mogok ruby for $55,000.

The recent auction sounds like it was good, but as usual the sales primarily represent jade and Mong Hsu rough. Take that away and the Mogok gem sales amount to walking around money. Nobody wants to run private gem sales through the auctions now, since the proceeds must sit in a bank for a while, and then are subject to the withdrawal limits.

If events turn worse in Burma, I'll probably go in, since I have a lot of folks there I would hope to check on and make sure they come through it all okay. As events permit, I'll let you know, kind of like one of those "embedded" reporters in Iraq.

Thailand Gem Scams
The Thai government is getting tired of Thai gem dealers ripping off foreigners. The new moves are in response to a flood of complaints from tourists and overseas buyers. The plan is to help protect the country's reputation. They have proposed some major new bold steps to stop these practices:

First, the Thailand government announced it will enforce its assets seizure law to stop jewelry shops from cheating tourists. The assets seizure law would be invoked to impound ill-gotten gains from repeat offenders. It would be applied in tandem with new consumers' protection and anti-fraud laws.

Second, the Commerce Ministry is considering placing gems and jewelry on its price control list, which normally covers only essential goods. Once gems and jewelry are placed on the price-control list the ministry would then work out conditions requiring traders to provide money-back guarantees.

Third, the Commerce Ministry proposes gem dealers offer money-back guarantees as part of the government's stepped-up attempt to curb gem scams. Naturally, gem dealers in Thailand are against this measure saying the requirement would increase their costs. Buyers will have 48 hours to return the goods if they felt dissatisfied with the products they bought.

Lastly, to settle possible disputes, the ministry has proposed setting up an independent committee whose members should come from different sectors including the ministry, trade associations, the tourism authority and the National Police Office as well as the Consumer Protection Board.

(Caveat emptor when buying in Thailand-ED)

Collectors Corner
Treatment and Fancy Sapphire Prices

US dealers and collectors are avoiding heated fancy colored sapphires due to the Beryllium Diffused treatment issue. Unheated stones are now commanding 40%-50% premiums over heated goods. Do not buy any corundum without a report from a major independent laboratory. Be especially careful of intense orange, vibrant yellow and pink-orange padparadscha colors. Expect the premiums for unheated Burma/Kashmir sapphires and unheated Burma ruby to increase, also.

Lute Olsen’s Burma Ruby
Lute Olson, the coach of the University of Arizona Wildcats basketball team, bought his new wife, Christine, a four carat Burma ruby engagement ring with two diamond baguettes on each side. Her wedding ring is a band of red rubies, white diamonds and blue sapphires. Lute Olson wears an 18-carat wedding band. They were married April 12th in Las Vegas at the Bellagio.

$1.6 Million 'Oz' Ruby Sandals

shoes.jpgA pair of ruby encrusted sandals went on sale at Harrods, London's luxury store, with a price tag of US $1.59 million. The designer sandals, inspired by the shoes worn by Dorothy in the film classic 'The Wizard of Oz' are on display behind bullet proof glass. The four-and-a-half inch high sandals are threaded with platinum and set with 642 round and oval rubies, totaling more than 120 carats. The shoes will only fit those with size three-and-a-half.

Rare Diamonds at the Smithsonian
Want to see eight of the world's rarest diamonds this summer? Go to the Smithsonian's National Museum of Natural History from June 27th until Sept. 15th. The museum's Harry Winston Gallery will display:

•The 45.52 carat famous blue Hope.
•The Steinmetz Pink, a 59.60 carat "fancy vivid" pink flawless stone. It has never before been on public display.
•Heart of Eternity, a 27.64 carat vivid blue diamond mined in South Africa.
•The Moussaieff Red, at 5.11 carats, is the world's largest known red diamond. It was discovered in Brazil in the 1990s by a farmer.
•Harry Winston Pumpkin Diamond, a 5.54 carat bright flawless orange stone. It worn by actress Halle Berry the night she won her Best Actress Oscar last year.
•The Allnatt, one of the world's largest yellow diamonds at 101.29 carats.
•The Ocean Dream, the world's largest naturally occurring deep blue-green diamond, 5.51 carats.
•The 203.04 carat DeBeers Millennium Star, the sixth largest white diamond in the world.

Diamond and Gemstone Cell Phones
A Taiwan-based telephone maker is marketing a diamond-studded cell phone for US$28,700. The phone has a gold-colored exterior as well as a diamond-encrusted flip cover. Nokia recently took fashion to extremes when it helped introduce Vertu's US$30,000 cell phone--decorated with sapphires and rubies.

Missing Fabergé Egg
Totally, Fabergé created 51 imperial eggs. A “lost” Fabergé egg resurfaced in 2001. It has not been in Russia since 1927, when the egg was sold by the Soviet government to foreign buyers. Experts can only speculate about the egg's whereabouts before it recently resurfaced. It was returned to Russia after being purchased by the Russian National Museum, after nearly 74 years of obscurity. It is believed the egg cost the museum "millions of dollars." The egg's previous owner lives in London and is descended from a family of Russian emigres.

The egg was created for the family of Tsar Nicholas II by Carl Fabergé and presented to the tsar's mother, Maria Fyodorevna. The egg is made of Karelian birch rather than the usual gold and precious gems. Inside, Fabergé crafted a mechanical elephant with eight large diamonds, 61 small diamonds and a diamond-studded key engraved "MF" -- for Maria Fyodorevna. The Revolution occurred just 32 days before Easter on April 1, 1917, and Nicholas II obtained the egg after paying 12,500 rubles ($6,000 at the time) -- despite having already abdicated.

The last public sale in 2002 of a Fabergé egg was the Winter Egg. It sold for $9.6 million, a jump from the previous record sale price of $5.6 million in 1994 and $4,760 in 1949. No one who owns these eggs wants to sell them, and the market is limited to maybe 10 eggs. The supply and demand realities of Fabergé eggs make it safe to assume prices will continue to rise for these ultimate collectibles.

Burma Spinels and New Blue Sapphires
Red spinel prices have gone ballistic. The new asking price for three carat gem reds is $5,000 per carat.

Nanyarseik ruby and spinel production slowed considerably over the last year, so miners started going deeper in the alluvial soils. While previously only digging to five feet or so, they now have gone down about twenty feet to hardrock level. At this lower depth they have encountered contact zones of pegmatites, and this generally means sapphires. Nanyarseik is now producing an occasional deep blue sapphire. The quality is reportedly high. This new mining area may help the dismal production of Mogok Burma goods. The major ruby and sapphire gemstone mines near Mogok are all losing money. Many miners are considering closing their operations.


Gem Thieves Siblings Sought In Daring SF Jewelry Heist
At 11:30 p.m. on April 6, 2003, four men entered the vacant Rumpus Restaurant near Union Square. They cut a hole in the wall leading to Lang Antique & Estate Jewelry. The alarm sounded and the Police were summoned. Officers saw no signs of entry when they peered inside. By then, the thieves had disabled the security cameras. They hid in the bathroom, free of motion detectors. The alarm reset and was assumed to be false. When four employees arrived at work ten hours later, the bathroom door burst open. Armed, masked and gloved, the robbers forced the workers to open the safes. They bound them with flex-cuffs and duct tape. The thieves were articulate, polite and cautious. The thieves filled garbage bags stuffed with as much as $10 million in hand-crafted diamond rings, Art Deco bracelets and brooches studded with Burmese rubies and Kashmir sapphires. Missing are 350 diamond engagement rings and many bracelets, pins and pendants. Many of these goods are collector's items, some dating to the late 1800s. The San Francisco police have named Dino and Troy Smith, two infamous jewelry burglars, as the alleged perpetrators. The tall, handsome duo already had pulled off a series of bold robberies and burglaries in a criminal past that fills more than 20,000 pages of court documents.

South Africa
A syndicate is selling fake gemstones in South Africa. The con men are described as well-spoken, well-presented, middle-aged and British. A Johannesburg man bought two rough rubies for about US $6,000. The stones were made of glass, mixed with a grey synthetic material to make them look more realistic. Also, they were infused with lead piping to achieve the standard weight of a 300-carat ruby. What is the old saying? If it sounds to good to be true, it usually is.

UK Graff Heist 
In late May, Graff jewelers, exclusive jewelers in central London were victim of one of England’s biggest gem heists. Two suspects stole 47 items of diamond jewelry worth almost US$10 million. A Serbian man is in custody. Scotland Yard continues to hunt a second suspect. The shop was the scene of another jewel theft in 1993 when a gang got away with about US$11 million from its Hatton Gardenshop.

Auction Report
Christie's and Sotheby's agreed to pay $20 million to disgruntled clients as a settlement in a class action lawsuit. They were accused of price fixing between 1993 and 2000.

The auction market may be strengthening because Sotheby’s sold a 5.33 Burma ruby for $68,000 per carat in May. However, most colored gemstone and colored diamond prices are weak.

In The News
Imelda's 'crown jewels' to go under the hammer

By Sarah Toms
BBC's East Asia Today, Philippines, May 15, 2003

Imelda Marcos may be famous for her shoe collection, but she also enjoyed fine jewelry. Later this year, collectors will get a chance to bid for some of the necklaces, bracelets, tiaras and other baubles that were seized when Mrs. Marcos and her husband Ferdinand were forced to flee the presidential palace by a popular revolt in 1986. The collections, now locked away in the central bank's vault for safe keeping, are expected to fetch millions of dollars when they go under the hammer.

"I have never seen stones like this in my life and I am 47 years old, " said Grace Tan, who works for the government commission trying to recover the $5 billion the Marcoses are alleged to have siphoned off from the Philippines. "I have seen blue diamonds, yellow diamonds, pink diamonds, different sizes, different shapes, rubies, sapphires... really, really big - as in big!" she said. Mrs. Marcos denies any wrong-doing as she faces dozens of criminal and civil cases stemming from her husband's 21-year rule.

The woman who coined the word "Imeldific" as a synonym for ostentatious extravagance, has made no comment about the jewelry auction. A leading Philippine jeweler, who asked not to be identified, said the Imelda name would attract interest but that jewelry collectors and dealers would be focusing on the value of the pieces.

Just one stone, a pebble, could finance a program for urban poor residents
Highlights include a Persian-style necklace with more than 100 carats of canary and pink diamonds, and a diamond-studded bracelet with a 31-carat marquise as the center-stone. This should mean, he said, that the auction would have little trouble topping a 1996 valuation of $12-20 million for the collections.

"People will definitely be interested in looking," said the jeweler. "Whether they will buy is a different matter," she added. The Philippines, where a third of its 80 million-strong population lives on a couple of dollars a day, and hefty budget deficits are the norm, would be happy for the extra money.

"Just one stone, a pebble, can really finance a program for urban poor residents," said Reuben Carranza, another member of the government commission seeking the alleged Marcos millions.

"You can imagine how many housing projects, how many classrooms, how many hospitals, bridges, how much in terms of public benefit can be funded by selling all of this jewelry," he said.

'Suitcases of pearls'
Gems the size of golf balls and suitcases full of pearls were seized by US and Philippine customs officers when the Marcoses fled Manila for Hawaii 17 years ago.

One collection of around 60 pieces was taken from Demetriou Roumeliotes, a Greek friend of the former First Lady, as he tried to leave the country.

At first, customs officers left the jewelry laying about on desks because they did not believe it was real, Ms. Tan said.

A second collection of 400 pieces was seized by US Customs in Honolulu.

A third collection, the Malacanang, was left behind in the presidential palace and is still under litigation, but the government hopes the case will be settled in time for the auction.

The jeweler said there may be some relative bargains at the auction, but Ms. Tan said she was worried that the associations of the jewelry with the Marcos regime may put people off buying.

"If perhaps they realize the proceeds of this jewelry would be for a good cause - and that is the Republic of the Philippines, because we really need the money - then they might just (buy)," she said.

"We can probably throw in some of her gowns and some of her fabulous shoes with the jewelry and they would get a real good souvenir," she added.

Buying rocks in a hard place
The Nation
by Damon Poeter
Chantaburi, May 30, 2003

Got gemstones? Chantaburi does, and expats from six continents have set up shop in the sleepy little provincial town to make big bucks from small treasures. They want to get as close to the proverbial “source” as possible, where prices are low, low, low and returns are high, high, high.

This particular myth needs a little updating. These days, Thailand imports far more rough gem material than it exports. The old mining centers such as Chantaburi are no longer the real source–Burma, Madagascar, Cambodia, East Africa and even Australia are where most of the gems you see in Thai markets originate. But Thailand does remain the top source of quality manufactured colored gemstones–particularly rubies and sapphires–from tiny calibrated gems destined for watches or pave settings to huge, dazzling rocks that would make even Liz Taylor do a double take.

The Kingdom’s position in the industry rests on three pillars: A long-standing tradition of gem trading; quality manufacturing at low costs; and the world’s greatest collection of experts in the sometimes scientific, sometimes shady practice of treating gemstones with heat or other processes to enhance their color and clarity. Foreigners and Thais compete on both the buying and selling end of that trade, making the gemstone business one of the most vibrant industries in the country, as well as one of the most integrated.

Biggest little city
Bangkok itself moves the most colored stones in Thailand, possibly the world. Thailand exports about Bt80 billion in gems (rough and polished) and jewelry a year, according to the Department of Business Economics. Conventional wisdom says that about four times the amount of colored stone business is conducted in Bangkok as in in the rest of the country.

So it would seem that the would-be gem trader should begin in Bangkok—until you consider what Chantaburi has going for it. The entire province has 400,000 people, as compared to Bangkok’s eight million. Right away, you’ve got an advantage for buyers and sellers alike: in Chantaburi the gem trading and manufacturing area is highly localized, occupying just a few streets; in Bangkok, you often have to sit in traffic for hours to get from a dealer’s office to a factory on the outskirts of the city.
And Chantaburi is no longer a secret. The town’s trading tables have attracted a considerable number of foreign buyers and sellers away from Bangkok in recent years. Because the picturesque little hamlet, which straddles the Chantaburi River, is still relatively close to the capital (about three hours away by car), it provides an easy alternative for foreigners based in Bangkok that the distant gem trading centers of Mae Sai and Mae Sot simply can’t match.

The gem bazaar exists in a tightly-packed maze of sois, where dealers and buyers meet at rented tables and cramped shopfronts to barter for gem parcels varying in weight and value.

Amidst the riches of smells and sounds, the wealth of the gem bazaar is flashed in palms, spilled across tables, examined under loupes and held up to the light. European, African, Indian, Chinese, and North and South American buyers and sellers mingle with Thais on the streets. Tough-looking characters carrying fighting cocks to some quasi-legal contest pause to examine cabochon sapphires and share a cigarette. Attractive women abound, making the experience of being separated from one’s money that much more pleasurable, at least for the men.

In Chantaburi, the trade is mostly in ruby and blue sapphire, some 85 to 90 per cent of all business, say locals. But a rainbow of other stones passes across the town’s trading tables: orange sapphire, aquamarine, rubellite, amethyst, heliodor, morganite, blue tourmaline, and much more. A chat with Pracha “Tong” Sansukktrakul, a major exporter of finished ruby and sapphire, reveals that what visitors see on the streets just scratches the surface of the gem trade in Chantaburi. There are probably 15 to 20 big gemstone manufacturers in town, he says, each operating a dozen or more heat-treatment and polishing factories. These companies operate strictly on customer orders, and deal almost exclusively in ruby and sapphire, mostly very small sizes, with some production of 1- to 2-carat stones.

The Joy of cooking
Lek runs a sapphire heating and polishing factory about 10 minutes outside of the town center by car. It’s fairly typical of the small-scale factories dotting the area, a scattering of bungalows set about 10 yards off a tree-lined country road. Unfortunately, Lek isn’t particularly keen on allowing casual strangers to witness gem-treatment sessions. “Burners” are notoriously cagey about allowing visitors in to see heat treatment facilities, much less the actual “cooking” in progress. Questions about optimal temperatures and burn times are met with the same uncomfortable shrug.

Still, with a little cajoling, Lek relents to allow a peek at the cool, concrete workshop where he and his crew employ some of the most jealously-guarded methods in the gem and jewelry trade to produce stunning blue colors from dirty, bluish-gray sapphire rough. As Lek’s assistant Tum unlocks the chain and lifts the shutter, revealing a quiet, nearly empty little room, a vague sense of disappointment sets in. No Dante-esque scene of glowing ore bubbling out of lead crucibles, no soot-blackened men shoveling coal into burning furnaces.

No, rather than the demonic forges one secretly hopes for, a heat treatment oven is a primitive, three-metre-tall brick assembly that opens at the top. A spindly metal frame on casters with a chain hanging from a bar at the top allows the burners to hang a crucible and maneuver it into place over the oven. A pile of charred crucibles sits in the far corner, and that’s it—the entire burning operation in all its scaled-down simplicity.

There is a certain beauty to it all—Thais have elevated heat treatment not to an art or a science, but rather to a pure form of economics. They eschew the million-baht state-of-the-art furnaces with complicated electrical systems built by accredited engineers and laugh softly at the mention of uniform ambient temperatures. Rather, they build bulky ovens that resemble giant backyard barbecues out of the cheapest materials available and fire them up with coal. And yet they get a 50 per cent or better return on the rough they burn, which isn’t so far off the success rate promised by the makers of the expensive ovens. Considering the low cost of setting up a workshop in Chantaburi, the economics of the simple path make sense.

In contrast to the burning workshop, the cottage that houses the polishing operation is a hive of activity. Two women and a man sit at polishing wheels, grinding minuscule chunks of sapphire rough. Nobody looks up from the task at hand, their nimble hands manipulating maddeningly tiny tools and material. It’s incredible to think that all across Chantaburi there are hundreds if not thousands of these bare-bones factories, each with a few to a dozen workers, churning out mostly small calibrated sizes of ruby and sapphire to feed the world market, not looking up from the task at hand for hours on end.

Knowledge is power
To would-be gem traders, it should be said that turning up at the trading tables in Chantaburi with a fistful of cash, little knowledge of gems and no idea how the market works would quickly collapse into a costly, depressing mistake. A better plan for beginners is to go in with an open eye, a small budget, and the discipline to stick to it.

Such an educational trip would certainly pay off in the long run, even if it only turned out to be a relaxing holiday. Just by witnessing the whole crazy dynamic of a gem market unfold in the morning and then pack up and leave without a trace by late afternoon, one gains valuable insight into how the business works. And from there, it’s just a short hop-skip-and-a-jump to making that business work for you.