September 2011 Newsletter: Inside the Colored Gemstone Business

This month our feature article takes an inside look at the colored gemstone business. Learn why it's so difficult (and expensive) to buy finer colored stones from retail jewelers.

Also in this month's newsletter ... our new gemstone jewelry gallery, the upcoming Hong Kong jewelry show, and a planet made entirely of diamond.

Rare Colored Gemstones
Inside the Colored Gemstone Business 

Many retail jewelers sell colored gemstones as well as diamonds. It looks like more or less the same business -- small valuable minerals mounted in expensive metal. But if you understand the supply side, you'll see that colored stones is actually a very different business indeed.

The diamond trade is largely controlled by the De Beers cartel, which manages everything from supply to pricing to public perception of diamonds. Though the public is led to believe that diamonds are rare and precious, in fact they are as plentiful and as commoditized as oil, gold or pork bellies. Diamonds of similar grade are sold at the same prices nearly everywhere in the world, and prices are kept high by controlling the supply. If you're a retail jeweler, one of the nice things about selling diamonds is that you can always get stock in every size, shape and grade. 

The colored gemstone business is quite different. Colored stones are mostly mined by independent, small-scale miners, working in  remote locations in Sri Lanka, Madagascar, Tanzania, Kenya, Pakistan, Burma or Afghanistan. Mining is usually carried out with pick and shovel, and only rarely with heavy equipment. Colored gems mainly reach the market by means of relatively small deals between independent businessmen. The supply is variable and unpredictable.

There are some colored gems which are mined in commercial grades and quantities, and retail jewelers can order them from jewelry distributors. You'll find blue topaz, peridot, amethyst, aquamarine, tanzanite and fracture-filled ruby everywhere. Better jewelers will stock small sapphires as well. But fine gemstones are a different story. If you are looking for a Burmese ruby, a top sapphire over 2 carats, or a high quality spinel, tsavorite garnet or zircon, your local jeweler is unlikely to have anything to show you. 

Very few retail jewelers hold stock in fine colored gems. These gems are simply too rare and too expensive, and too difficult to source. When a customer requests one of these gems, the jeweler will typically contact a specialized gem dealer who will send him gems on memo to show his customer. This is convenient for the jeweler, but very expensive for the customer. We indicate these prices on our website, where we show a "regular" price (the price you'll pay in a retail jewelry store) and the substantially lower price you'll pay buying directly from AJS Gems. 

The business of fine colored gems is specialized because it takes so much work to source good material. It takes years of experience and a discriminating eye to evaluate these gems, especially the rough stone. Building a network of trusted contacts also takes time, and there are rarely quick profits in the high end gems trade. When we pay thousands of dollars for a fine ruby or sapphire, we're prepared to hold the gem for years if necessary, since we know that the best stones will always go up in value. In the end, we're collectors as much as we are dealers. Nearly every gem in our collection is unique, and many are impossible to replace once sold. 

 

Notable Gems from the AJS Collection

This month we feature notable gems from our collection. Click on the gem photos to view the gem details.

Bi-Colored Topaz 4.01 cts

4.01 ct Bi-Color Imperial Topaz from Brazil  [SOLD]

A very rare and unique bi-color topaz, with lovely gradients of pink and gold. Certified by GRS as natural and unheated. With a size of 12 x 7 mm, this will make a wonderful pendant or ring. We've graded this rare gem as flawless ("loupe clean").

Unheated Ruby Madagascar 2.03 cts

2.03 ct Unheated Ruby from Madagascar

Clean rubies with top color are rare in any size, but especially over 2 carats. Unheated rubies in that size are particularly rare. This rare unheated ruby from Madagascar is distinguished by its bright pink-red color. This gem has wonderful fire and superb clarity. Certified by Tokyo Gem Lab as natural and unheated.

 Blue Sapphire Madagascar 2.38 cts

2.38 ct Sapphire from Madagascar  [SOLD]

Another top grade Madagascar stone, this fine sapphire displays a deep royal blue that is often regarded as the ideal for blue sapphire. Precision cut in an 8 x 6 mm cushion, we've graded this gem "almost loupe clean." 

 Spessartite Garnet Nigeria 8.27 cts

8.27 ct Spessartite Garnet from Nigeria

Nigeria is famous for vivid mandarin orange spessartites, but they also produce some of the rich red orange colors. This is an example of a very clean stone in a big size, over 8 carats. Beautifully cut in a square cushion.

 Tsavorite Garnet Kenya 1.91 cts

1.91 ct Tsavorite Garnet from Kenya

A superb chrome green tsavorite with a medium tone and slightly blue secondary hue. While some people prefer the deeper tones in tsavorite, the medium tone is especially lively and vivid. At nearly 2 carats and very clean, this is an exceptional gemstone.

Hot Pink Sapphire Ceylon 2.03 cts

2.03 ct Pink Sapphire from Ceylon  [SOLD]

When people think of Ceylon sapphire, they usually think of cornflower blue or yellow. But there are outstanding pinks as well from Sri Lanka. We've rarely seen a more intense hot pink than this 2.03 carat oval. Certified by GRS as "vivid pink." Most pink sapphires have significant inclusions, but this is this a very clean stone that we've graded "almost loupe clean."

News from AJS and the Gems World

  • Gemstone Jewelry Gallery -- we have just added a jewelry gallery to our website where we will display jewelry created by our customers with AJS gemstones. We will also exhibit some of our own designs from time to time, and we are currently showing two alexandrite rings that have just been created for us. We would be glad to display your jewelry in our gallery, so please send a photo and short description to us at info@ajsgems.com. Click the link to see our new jewelry gallery.

  • AJS Gems will be exhibiting at the Hong Kong Jewellery and Gem Fair, September 19-23 at the AsiaWorld-Expo, booth numbers 6Q18 and 6Q20. Please note that our office in Bangkok will be closed the week of the show. We'll be answering email as usual, but no orders will ship from our office that week. We'll resume shipments on Monday, September 26th.

  • If you thought diamonds are rare, consider a recent report from the Max Planck Institute of Radio Astronomy. Astronomers have discovered an unusual planet in the Serpens constellation, which is part of the Milky Way galaxy. Based on its size and density, and its proximity to a small spinning star known as a pulsar, astronomers believe the planet is composed almost entirely of crystalline carbon or diamond. The planet has a diameter about 5 times greater than the Earth and is about 4,000 light years distant, a mere stone's throw in astronomical terms. 

 

Ask the Gem Experts

Each month we answer questions from our customers. We welcome your questions and you can submit a question from our contact page.

When you list a sapphire as heat treated I assume the sapphire was only heat treated and not treated with any other chemicals such as BE or any other methods? Is that correct?  V, NZ

Yes, in our listing we use the description "Treatment: Heated" to indicate simple heat treatment only. If a gem has been heat treated with beryllium (chemical symbol Be) we include the description "Treatment: Heated/Lattice Diffused." The term "lattice diffused" means that a foreign element has been diffused into the crystal lattice during the treatment process. 


Which gem labs do you use for certification? Can I choose the lab I prefer for my certificate? PJ, Canada

We use several of the best gemological labs in Bangkok, including GRS (GemResearch Swisslab), GIT (Gem and Jewelry Institute of Thailand), AIGS (Asian Institute of Gemological Sciences) and Tokyo Gem Lab.  A number of our gems have already been certified and we include the certificate with the gem; in that case you will see a copy of the certificate on our website on the gem detail page. If you would like to have a certificate for one of our other gems, please contact us before you make your purchase and we'll advise on timing and cost. Please note that we include a complimentary AJS gem identification report with all of our gems.

 

All the best in gems,

Arnold, Rung & Ron

 

 
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