The coloured gemstone industry is thriving. The rarity of stones such as emeralds and rubies is driving record demand and, subsequently, prices are at all all-time highs. Having recently hit a value of $1 million per carat, rubies now outstrip white diamonds as the world’s most valuable gemstone, a surprising fact that is turning the industry on its head.
During a recent visit to the Bangkok offices of specialist mining company Gemfields, I discovered more about this fast-growing market and some of the struggles the industry is facing.
“Over the past six months, six million tonnes of rock have been moved to give 52kg of high-quality emeralds, which shows you the rarity,” explains Adrian Banks, product director at Gemfields. He refers to the group’s emerald extraction process, which takes place in Zambia at one of the company’s two operational mines – the other is in Mozambique. Gemfields’ focus is firmly on the responsible supply of coloured gemstones, which in itself is a rarity today.
With so much to gain, there is unsurprisingly a downside, and that’s where Gemfields comes in. The company is helping spearhead moves to bring legitimacy and accountability across the industry. While many mining companies are notoriously coy about discussing financials, Gemfields is listed on the Johannesburg and London stock exchanges, and its monetary dealings are a matter of public record.
“It would be great if others did the same, as then it would be out in the open how much governments and host countries are getting for the natural resources we are mining,” Banks explains. A quarter of each Gemfields mine is also owned by another party. The Kagem Emerald Mine is part-owned by the Zambian government, meaning that in addition to receiving land fees and taxes, it also takes a share of the profits. Gemfields, meanwhile, shoulders the multimillion-dollar cost of setting up and running the mines.
Mining for emeralds, in particular, is a complex and costly enterprise. Additionally, Zambian emeralds are only found in rare conditions – and miners must dig to know what’s beneath the surface. “We don’t know the quality or quantity, and it’s a massive cost to dig down trenches,” Banks explains. “It’s very high-risk mining.”
Often, the trenches reveal nothing, but when gems are uncovered, the profits can be enormous. In 2021 alone, the Kagem Emerald Mine turned over $147 million. To ensure openness, Gemfields has created a sales system built around transparency. The rough stones it mines are sold only via auction, with all potential buyers fully vetted in advance.
Another reason for Gemfields’ insistence on transparency centres on the industry-wide practice of treating stones to enhance colour and clarity, thereby increasing value. Corundum – a combination of ruby and sapphire – can be visually enhanced by heating, while emerald is boosted by exposure to oil. Although it’s hardly a new practice, lucidity demands that any work is fully disclosed. And therein lies the problem. Francois Garaude, founder of an eponymous gem dealer turned jewellery designer, explains: “If the stone is not what I paid for, I stand to lose a lot of money.” As a supplier of high-value loose gems to the jewellery maisons of Paris’s Place Vendoome, he is known for sourcing the best, most beautiful stones.
Inadvertently selling a treated stone can impact his reputation. Garaude holds up several emeralds, bought years before, that are treated. Unaware, he sold them on, only to have them returned as the oil dried out and the internal inclusions were revealed. With a reputation to protect, he says he had little choice but to refund his customers and take the loss.
KV Gems’s co-founder Joseph Thomas Belmon tells a similar tale. “When you buy stones from people you don’t know, even as a rough [gemstone], there is no guarantee,” he explains. Despite 40 years of experience, Belmont recognises the risks of inadvertently buying a treated stone are too high. “From Gemfields, I don’t worry. We buy rough, cut it ourselves, and we know it’s not treated.”
Gemfields only sells stones directly from its mines, and to encourage traceability, it has adopted Provenance Proof, a system that embeds rough emeralds with nano-particles loaded with unique information. Backed up with blockchain technology, future buyers can have the particles extracted, checked and replaced without affecting the gem. “That’s a world first,” Banks explains. “Responsible sourcing and traceability are becoming more important, and we take that very seriously.” While no equivalent exists yet for rubies, Gemfields is invested in finding a solution.
As both a co-founder of the Coloured Gemstones Working Group and adviser to the Responsible Jewellery Council, Gemfields is vocal about the fair treatment of its workers and their communities.
At both locations, local people are employed at the mines, with the Mozambique site hiring around 95 per cent of its 1,400-strong workforce from surrounding villages. The company also liaises with communities about which support programmes are needed most, ensuring they are meaningful, long-term and self- sustainable. The company has so far provided two mobile health clinics and an outpatient centre and has three primary schools under construction in Mozambique, as well as a new health care centre in Nkana, Zambia. Gemfields has also helped local farmers establish associations, from which it buys fresh produce to feed the workforce.
Responsibilities remain even when the mine is exhausted (usually after a 20-year cycle). At the ruby mines, the land is relatively easy to restore as gems are typically found in a shallow gravel layer. Once that is removed, the topsoil is replaced, and native trees and bushes are planted using a site-specific seed bank.
The emerald mine is more complicated. Already 140 metres deep, Banks concedes it will take more than a few seeds to restore. However, while there is no perfect solution, the company is actively trying to find the answer. The aim, Banks explains, is clear: “In 100 years, you won’t even know we had been there.”