Coloured Gemstone Mines to Market Meet - Solitaire … Gemstone Mines to Market Meet 1st ICA...

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The Gem and Jewellery Export Promotion Council (GJEPC) held the first ever International Coloured Gemstone Mines to Market conference in Jaipur over two days in November. More than twenty experts from the coloured gemstone pipeline – from geology and mining to processing and marketing – shared their views on issues of sustainability to maintain a steady supply of rough gemstones; mechanising mining activities to boost production; helping artisanal miners; beneficiating local inhabitants in the mining areas, and marketing these rare natural wonders innovatively. Some speakers even hinted at the prospect of investing in mines in Africa in joint partnership ventures with governments. The talks provided a stimulating exchange of ideas and opened up new avenues to grow trade. Shanoo Bijlani and Regan Luis report. A Scripting Future Colourful Coloured Gemstone Mines to Market Meet 1st ICA

Transcript of Coloured Gemstone Mines to Market Meet - Solitaire … Gemstone Mines to Market Meet 1st ICA...

The Gem and Jewellery Export Promotion Council (GJEPC) held the first ever International Coloured Gemstone Mines to Market conference in Jaipur over two days in November. More than twenty experts from the coloured gemstone pipeline – from geology and mining to processing and marketing – shared their views on issues of sustainability to maintain a steady supply of rough gemstones; mechanising mining activities to boost production; helping artisanal miners; beneficiating local inhabitants in the mining areas, and marketing these rare natural wonders innovatively. Some speakers even hinted at the prospect of investing in mines in Africa in joint partnership ventures with governments. The talks provided a stimulating exchange of ideas and opened up new avenues to grow trade. Shanoo Bijlani and Regan Luis report.

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Coloured Gemstone Mines to Market Meet1st

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There was a time when the coloured gemstone business in India was much bigger than that of diamonds. In fact, Jaipur was the birthplace of the GJEPC, before the Council moved its headquarters to Mumbai. About 90% of the coloured gemstones find their way to Jaipur for being cut and polished. The total Indian exports of the coloured gemstones for the year 2009-10 stood at $314.5 million, but these figures pale in comparison to the diamond manufacturing industry, which exported goods worth $28.2 billion in the same year.

Sensing a need to revitalise the coloured gemstone industry across the world, the GJEPC replicated the model of Mines to Market for Diamonds conference, for the coloured gemstones. The aim was to inject some fresh ideas and get new directions into the almost-stagnant state of this fragmented sector, which mostly depends on artisanal mining.

Since time immemorial, India has been the key supplier of cut and polished tanzanite, emeralds and other gemstones, and employs over 2 lakh people in the industry. India has a large jewellery market and this has grown since the last decade as the economy has strengthened and there has been a sudden increase in the purchasing power of the people; in fact the domestic market is the most promising market today.

The industry is also looking at avenues to invest in mines in partnership with governments abroad. GJEPC chairman Rajiv Jain said in his opening address at the conference, “The whole idea of organising

the Mines to Market conference was to inject some more vitality in the coloured stone industry as it was not showing the growth that it should show. Also, our share of jewellery should increase in comparison with other luxury goods. We were deliberating for a long time to take some actions by which we could increase the exports and business of coloured gemstones not only in India, but the industry across the globe. Until and unless all the stakeholders come under one roof, and do some brainstorming, we cannot move forward.”

More than 350 participants from Jaipur had pre-registered for the seminar, and a sizeable number of them were below the age of 40, informed Jain. “In order to stem dropouts from this industry, it is essential that the second- generation manufacturers are roped in and involved. These seminars are intended to give them the confidence that this industry has the potential to grow and there is a lot to learn here,” Jain said.

Jain also stressed upon certain other measures such as pushing the free movement of goods especially for rough gemstones in India. The coloured gemstone industry is also actively considering the formation of a consortium for coloured gemstones along the lines of Diamond India Ltd., to bring more rough gems to India for processing.

The GJEPC has been taking innovative steps such as this and the buyer-seller meets to promote and consolidate the industry’s growth. Talks are on with the ministry of tourism, government of India, to promote Jaipur as the coloured gemstone destination for international tourists, Jain informed.

Unfortunately, the coloured gemstone industry, particularly the mining sector, has remained largely unorganised, barring a few notable exceptions like Gemfields and some others. Jain remarked, “This has affected the present industry to a large extent as we don’t have organisations like the DTC to market the coloured gemstone industry. It is precisely in this context that we felt an acute need to hold a conference that would find a structured way to IC

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develop exploration, mining, processing and importantly, marketing of gemstones. It’s only apt that the main sponsor of this Mines to Market conference is Gemfields, one of the most organised miners of gemstones in the world committed to following best business practices. This conference will be a forum of significance for the international coloured gemstone industry.”

India’s challengesSaurabh Chandra, additional secretary and financial advisor, ministry of commerce & industry, who inaugurated the conference, said that the conference aims at reinforcing India’s position as the global hub of coloured gemstones. The idea is to establish India as the one-stop shop for diamonds, gems and jewellery.

Gem and jewellery exports constitute 17.4% of India’s total exports or about $252 billion. Exports of jewellery touched $43 billion in 2010-11 up from $29.4 billion in the previous year. For the period April-September 2011, jewellery exports touched $22.6 billion registering an increase of 23.1% vis-à-vis the same period in 2010. Sadly, exports of coloured gemstones amounted to only $171 million.

There are a large number of challenges in the coloured gemstone industry that need to be overcome.

Chandra stated that nearly 20% of India’s gem and jewellery exports go to

the US and Europe. With the economic slowdown in these regions, new markets had to be developed. He suggested that exporters could develop international brands to achieve greater value additions. Formation of joint ventures with global retailing sourcing chains could be another way to increase their market share. “To achieve this objective the industry could leverage on the India brand equity to fund the market access initiative and the market development scheme of the government. This should help establish a foothold in new markets,” Chandra noted.

At the same time, efforts are required to lower tariffs in some countries so that the entry barriers are reduced, Chandra commented.

Another cause of concern is that sourcing of rough gemstones has remained erratic, and the inconsistency in supply and demand results in higher prices. Chandra revealed that the commerce ministry had held detailed discussions with the supplier countries such as Russia, Canada, Australia, South Africa, Namibia, Lesotho, Botswana, Angola, Azerbaijan, Armenia and Uzbekistan to resolve the issue.

“It is a win-win situation for both, as markets producing rough could use India’s skill in cutting and polishing and seek our assistance to establish industries there and to ensure that value addition takes place in the Indian gem industry,” Chandra suggested, adding, “In order to expand the

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market size for gems and other industries, we have been currently in talks with countries like Russia to increase bilateral trade, and we aim to reach a target of $20 billion by 2015. This augurs well for the Indian gem market since Russia is a market of significant potential in the future.”

He informed that the gem and jewellery segment is also a focus area for the government. In the Foreign Trade Policy 2009-14, India aims to double its export of goods and services. The gems and jewellery sector has been identified as one of the thrust sectors along with others such as agriculture and handicrafts since they can contribute significantly to economy and employment.

Steps have also been taken at the policy level to ensure that the gem and jewellery industry gets the highest publicity since it has significant potential in terms of growth

in meeting worldwide consumer demand as well as contributing to India’s exports and national income.

The master of ceremonies was Yianni Melas, the Cyprus-based jewellery designer, who recently launched his trademarked brand Philippe Alexander.

All the eminent geologists and miners were of the view that the coloured gemstone industry should engage in best business practices and make business models more sustainable. They also spoke about beneficiating the local population by introducing a number of schools, cleaning up the environment and other measures.

MININGInvest in minesMark Saul of Swala Gem Traders, and secretary general of the Tanzania Mineral Dealers Association, spoke about the

mining situation in Africa. He was of the view that for sustainability, a steady supply of gems was needed. This, in turn, could stabilise prices.

In order to sustain a steady supply of rough gems, Saul urged the stakeholders that this was the moment to invest in the mining industry in countries such as Zambia, Mozambique, and Tanzania. “Work closely with the governments by looking at options like partnerships or collaborations; offer benefits to the local communities,” he suggested.

Prior to the recessionary year 2008, there were at least 15 different types of gemstones mined in Tanzania including tanzanite, rhodolites, spinel, red garnet, tsavorite, tourmalines, aquamarines, rubies, sapphires and more. After 2008, there was a serious drop in the production of stones in Tanzania. He quoted official figures IC

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Decoding The Dragon

George Shen, director, California Gemological Institute (CGI), gave some useful insights into the Chinese economy, its consumption patterns and how the country has developed a dynamic economy that is fuelling growth at an accelerated pace. China is also the world leader in import and export of jewellery, precious metals, coloured gemstones and jewellery manufacturing.

Shen offered some numbers to indicate how the country had grown in just a matter of over two decades. “In Mainland China, only 7 tonnes of gold was used for jewellery in 1982. This number rose to 400 tonnes in 2010, making China one of the biggest gold consumers for jewellery in the world,” he said. In less than a decade, diamond jewellery, too, has grown at an extremely fast rate. According to statistics, total imports and exports from the Shanghai Diamond Exchange (SDE) grew from $150 million in 2002 to $3 billion by 2010.

Platinum and diamond jewellery from 2000 to 2010 had average growth sales of 23% every consecutive year. “For example, 3-4 years ago the standard engagement ring had

a diamond weighing between 0.3 carat and 0.75 carat, whereas today in all the big Chinese cities with young working populations, a 1 carat diamond is considered standard; and I believe this standard will spread throughout the country in the near future,” Shen revealed.

“I notice that coloured stone jewellery is just starting to get popular. In the past few years, China has developed some native gemstone sources such as the northwest Xinjiang province near the Russian border which has tourmalines and aquamarine mines. The quantity is fair, but the product is very good,” he said, adding, “Last year, I was appointed by the Chinese government to investigate which mines were capable of producing gem quality coloured stones for jewellery.”

In Hebei province in the north east, there are peridot mines that produce yellowish green stones of good quality in large sizes, but in small quantities. The south west Yunnan province produces bi-colour tourmalines that are light in tone.

In Shandong province, there are huge quantities of blue sapphire, in both small and large sizes and dark in colour. After heat treatment the stones improve in colour, but still have a darker hue.

In the Jiangsu province near

Shanghai, there are quartz mines that consist of smoky, rose and white quartz. A small quantity of amethyst is found in the Jiangsu province. Throughout China there are beautiful malachite, topaz, and diamond mines and the country also has abundant nephrite.

Shen commented, “Similar to India, China has great potential in the coloured gemstone industry, but for the Chinese market to advance further certain changes need to be made – education and regulation are two factors that can bring about this transformation.

“China’s growing appetite for diamonds is well-known, but Chinese people love colour too. However, the general public is still confused about gemstones due to the lack of education. Many Chinese people think that all red stones are rubies and all blue stones are sapphires, and some even feel there are too many cracks in emeralds. As a result of this lack of basic knowledge, gemstones do not sell well in China.”

The only gemstone that finds favour among the Chinese is jade, which is infused into Chinese culture. “China is one of the biggest buyers of these gemstones which can cost more than RMB1 million per stone,” Shen noted.

of tanzanite exports, stating that it fell from $39 million in 2007 to $35 million in 2008 to $15 million in 2009. There have also been huge shortages in terms of production as far as other gemstones are concerned.

Around 90% of the gemstones in Tanzania are produced by small scale miners, leaving only 10% to larger mining companies with foreign direct investment. The small scale miners are not a trained force, and they are a mobile population looking for the best economic opportunities, including mining, hunting, or farming.

As a result of the economic downturn, buyers from Jaipur and other parts of the world held up their purchases or started paying lower prices for rough. This affected the local mining industries, particularly the small scale miners, as they migrated to other localities to earn a better livelihood. Post 2008, Saul informed that Tanzania lost 80% of its small scale miners. “There are no small scale miners, and so, no gemstones.”

The only way to sustain the industry is by maintaining a steady supply of rough, paying higher prices for it. “This will also bring back the workforce. Small scale

miners will come back to mines if they are paid more.”

Edward Boehm, proprietor of RareSource, a company that specialises in high end collectible gemstones, informed that 80% of coloured gemstones were mined by artisanal and small scale mining labourers, and almost 90% of all these operations were in developing and emerging countries. These artisanal and small scale mining operations come with unique problems. And it is up to the industry to provide proper economic environment, water, schools, hospitals, sanitation etc to the local inhabitants living around the mining areas. Sustainability is the key to mining gemstones, and it was imperative that all partners in the supply chain comply with fair trade.

He also spoke about the various gem resources of the world. While confessing his weakness for spinel, he highlighted the esoteric connection between man and minerals. He said that there must be some reason why something so colourful grows under the earth where there is no light.

He informed that there are wild fluctuations in supply and demand of coloured stones, and the time has come

to look out for alternative sources such as Madagascar for rubies.

“We have to realise that gems are a natural product and there is no control over gems coming from the mines to the market,” he said.

Demand for sapphires, he said, had shot up and therefore, prices too have been skyrocketing. Today a one-carat sapphire costs $18,000 as compared with $10,000 around 15 years ago. To cut costs, one could buy Madagascar sapphires, he said. Ten years ago, one carat of good quality ruby sold for $100,000, today the same ruby costs $500,000 per carat. “What does it say to you? That there are people in the world waiting to pay that kind of money for a gem of that quality,” he stated.

He also suggested that marketing gems in a proper manner would perhaps increase sales. “It is not about price after all. Show and talk about history. It is about the people of the land where these gems are mined. Talk about the rarity of the gems. Excite them with facts. For instance, you could show consumers that tanzanites can be green too. They are a rarity.”

There are several new finds in different countries. Madagascar has been producing

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a new gemstone called Pezzottaite – these kinds of finds invigorate the trade. Other stones such as sapphire, spinel, alexandrite, aquamarine, chrysoberyl, colour-changing spinel, amethyst are sent to Sri Lanka for cutting and polishing. Mozambique is producing amazing vivid tourmalines, aquamarines; Columbia is famous for emeralds, and very rare high quality wagon wheel emeralds. Mining has been renewed in Brazil because of increasing demand for rubellite in China. Massive pockets of pegmatite are found in Brazil. Tourmalines, imperial topaz, bluish green tourmalines, and emeralds are other gemstones mined here.

Sustainable growth is a prerequisite in the mining sector, said Brian Charles Cook, who advocates corporate social responsibility as a logical and sustainable pathway within the industry. Cook is involved in mining processing, and marketing of golden rutilated quartz and

other Brazilian stone resources. He noted that Brazil has great

resources in minerals, big gold mines, palladium mines, and the country is one of the chief producers of coloured gemstones in the world. All over Brazil, there are large pockets of pegmatite provinces; plethora of gemstones, amethysts, emeralds, diamonds of vivid colours. He stressed, however, that sustainability is important when gems run out. “We have to create sustainability models so that we can pass it on to our children who, in turn, will pass it on to their children.”

MARKETINGSelling DreamsMost experts concurred that in order to sell either processed gems or gem-set jewellery a manufacturer or retailer has to keep his ear to the ground. Listen to what the client wants, offer quality goods,

designer jewellery, and you have a fantastic potential to tap that is largely unexplored. Sprucing up customer service changes the marketplace. If you are in the luxury space there is no room for mediocrity, and make sure you live up to your promises.

Prominent among the invitees who spoke about marketing strategies to sell these coloured beauties was Alberto Carlo Milani, chief executive, Buccellati Americas. His message was clear: tell a story to enthral your clients. In order to be successful we need to understand what the market wants.

Milani even deliberated on issues regarding luxury brands becoming a commodity and said that they were viewed as too easily accessible. Milani quoted a study that found that the way in which wealthy people in the US, UK, and China spent money today had changed. They spend more practically and discreetly. The study also found how perceptions differed

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in developed countries about issues such as the quality and craftsmanship of luxury goods decreasing? Is customer service key to selling luxury goods? Can luxury brands also sell mass market/online? Are prices today too high in relation to value? Does discounting impact the perception of value?

The study found that except for China, most of the luxury consumers felt that luxury items were getting commoditised. Again with the exception of China, the study stated that the anticipated trend in overall spending in developed countries on luxury goods in the next 12 months would be less.

“Be simple with your message and make sure you live up to it,” he said. “If we lose our customers’ trust we lose everything.”

Richard Hughes, senior vice president of Hong Kong’s Sino Resources Mining Corporation Ltd., a leading authority on the history, appraisal and identification of ruby and sapphire, lamented that the industry sells these rare commodities as

products. “You have to sell a dream and not a product. People do judge the book by the cover. What does our cover look like for the gemstone business? We can do a lot to improve the industry.”

He said that as geologists they traverse to the wildest and most uninhabitable lands to procure gems. It is imperative therefore that coloured gems should be sold in such a way that consumers should have a vision in their minds of those landscapes. “Gem selling today is more document-driven, and we forget that we are dealing with some of the most incredible substances of nature. Gemmology is not simply a science. People purchase gems because of passion, not for its properties.”

“The more you tell, the more you sell,” believes Steve Bennett of Gems TV, who said that television was one of the best platforms to sell gemstones. Candy Pratts Price, creative director of Vogue.com, also felt that the gemstone industry could effectively use digital media like Facebook and Twitter to sell gemstones.

Hamilton South, founding partner, HL Group, oversees corporate advisory services to global consumer products and luxury lifestyle brands including Ralph Lauren and Sotheby’s. South said that the world’s wealthy now not only live in the US and Europe, but there is a significant growing luxury consumer base in Asia. "Fortunately, high net worth individuals continue to invest in gems and jewellery and nearly 25% of investments are allocated to this category. Asian markets, in particular, have a strong appetite for gems and jewellery, especially India, China and Taiwan."

He hailed India’s jewellery design legacies, but said that considerable efforts must be made to find and develop fresh, young talented Indian designers, or else the road to success would be much longer and arduous.

He was also against relying on market research to push products. “Don’t wait for consumers to ask you for more emeralds, tourmalines or sapphires, lead them there,” he advised.

Gemfields Shows the Way

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Sending out a powerful message about working together to jointly promote and market coloured gemstones and adopt good business practices, Ian Harebottle, CEO, Gemfields, raised some pertinent issues as to why coloured gemstones – that are rarer than diamonds – are clearly losing out in the race to the relatively new entrants in the industry. “We have to go forward.

We have to become the De Beers of coloured stones,” he emphasised in his passionate speech.

“We need to be serious about coloured gemstones, but you have to ask yourselves are you really serious? The coloured gemstone industry, in theory, should be on top of the pops in the sector of luxury goods. They are rare, and it takes 500 million years to form these beautiful products. Coloured gems have, from the beginning of history, been recognised to have an intrinsic value. Mankind, till the end of the world, will always value luxury products, and coloured gems will always be part of this segment.”

Historically, up to about the 1960s gems and jewellery were considered a luxury. “What defined value within a luxury good was rarity. There’s nothing rarer than rubies, sapphires and emeralds, which are rarer than diamonds. Today, the global market for emerald, ruby and sapphire cut stones –

not jewellery, but cut and polished stones – is estimated at around $1.5 billion.

“Unfortunately things have changed, and today the value of a luxury good has very little to do with rarity and everything to do with the position that it holds in the mind of the consumer. We need to get in touch with consumers or we will stay behind.” He emphasised that branding and marketing these colourful gems as rare, is the key to expanding this industry.

However, he noted that without supply the industry would crumble. For that, he suggested that working in partnerships would benefit all.

About 90% of the world’s coloured gemstones are cut and polished in India, and Harebottle expressed shock that the leading country exports only $300 million-worth of polished gems every year. “Gems are losing out to plastic,” he exclaimed, citing the example of LVMH goods. “They take plastic and leather, and simply by focusing on marketing they

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Branding is more than psychological – it has a very real and rewarding financial return. "We sampled over 100 jewellery auction results at Sotheby’s, where brands commanded a 136% premium of hammer price over the asking price, versus 73% for non-branded jewellery," South informed.

GEOLOGYNew HitsTop geologists from all over the world gave details about the gem sources and pockets that produced new coloured stones. They also spoke about the conditions of those who mined the stones, and what could be done to improve their lot.

Federico Barlocher, consultant to museums and gem collectors, is a prominent dealer of high quality Burmese and East Asian gems. In his talk he described the situation in Mogok, Myanmar, which produced the world’s finest rubies for nearly over 800 years. Barlocher stated that nearly half a million people in Mogok were engaged in sourcing gems like rubies, sapphires,

spinels, and there were approximately 1,000 cutters. The place has an ancient feel to it and visiting Mogok is akin to going back in a time capsule. “Nothing has changed here,” the famed geologist said.

The valley of Mogok has mines, alluvial deposits that are depleted. Hand mining is convenient. The best gems since the last 40-50 years have been coming from Mogok. “Unfortunately,” he said, “Smuggling is a national sport here and the safety box is their mouth.” Around 2,000 buyers come here daily to source gems. Women are involved in selling gems here.

While, ruby is the national treasure of Myanmar, Mogok also produces the best peridot in the world. It also produces good quality sapphire, spinel. The main production in Myanmar is jade. Last year $8 billion worth of jade was auctioned.

Peter Lyckberg, a Swedish gem researcher who has studied the minerals of Morocco, Sweden, Afghanistan, Pakistan, and Ukraine, said that huge prospecting was going on in the Ural mountain range where emerald and alexandrite mines

abound. “I expect a lot more gem finds in the future in the Hindukhush range and Russia,” he noted. Afghanistan, he said, was rich in kunzite, topaz, emeralds, morganite, and gem pencil tourmalines. “There is still plenty to come. North Pakistan is rich in emerald, green beryl – gemstones in unbelievable colours. We need to romance gems. Geologists are important to create and add romance,” he noted.

The mineral pizzottaite is named after Dr. Federico Pezzotta, a geologist from the Museo di Storia Naturale in Milan. He spoke about the global sources of tourmaline and gem deposits of Madagascar, which has been producing it only since the last 10 years. The old localities which produced gem quality tourmalines were Burma, Brazil, and California. Australia and the Congo have recently started producing this gem. Chromium tourmaline from Tanzania is not from pegmatite but metamorphic rocks. Tourmaline is only found on our planet. “They could be rarer D

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make billions every year. In 2009-10, they made a net profit of $2.5 billion. Plastic is kicking our a**!”

The clear winners in today’s scenario are diamonds, but once upon a time, coloured stones were far ahead, he noted, adding, “Diamonds are the young boys on the block!” But this could happen only because of De Beers’ blitzkrieg of promotional innovative campaigns like the ‘Diamond is Forever’, ‘Diamonds are a girl’s best friend’, three-stone ring, and many more that brought diamonds front and centre. “Today, the young boys are the leaders,” Harebottle said.

There are some problems that need to be urgently addressed. Unlike De Beers, which invested millions of dollars in hiring geologists, the coloured gemstone industry hardly invests in geology research. “In coloured gemstones, geology leads mining. Because of the different gemstones that are unearthed, geology is way more significant and is a

hugely complex science. It’s a pity we don’t have enough geologists to help tap new gem resources,” he noted.

Gemfields, on the other hand, has understood the role of geology in mining coloured gemstones. “We don’t do a single blast without our geologists. In geology you can always look forward by looking backwards. The coloured gemstone industry has largely remained a small scale mining sector, and as a result miners have done value erosion and not value addition.”

Harebottle is of the view that each segment should concentrate on doing his business in the best possible manner – so, let the miners mine, manufacturers cut and polish, retailers retail. “If the mining guys can guarantee supply then the manufacturers can devote 90% of the time to their business and growth opportunities, 5% of their time towards marketing.”

Gemfields has been one of the exceptions, in that it is a large scale

miner in a small scale industry. Currently, it mines emeralds, amethyst, and ruby. It assures consistent supply and has on an average 18 months of production in stock. Harebottle revealed that two-and-a-half years ago, Gemfields’ operating costs were 90 cents a carat and it sold emeralds at 50 cents a carat. Now, its operating costs are 40 cents a carat, and it sells emeralds at $4 a carat.

“We also have a downstream commitment. We believe in disclosures to our buyers and consumers. We are environmentally-conscious and trying to be a carbon-neutral company. We fill old pits with water and feed them with fish so that the locals can catch fish and earn money. We aim to plant 300,000 trees and are already working towards it. We are committed to make social investment, and are engaged in farming projects; we have built four schools, two clinics for the locals where we have our operations.”

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than diamonds,” he believes. The mining industry in Madagascar, he said, is plagued with problems. There are no regulations governing the functioning of the mines and it does not help the locals in the mining areas.

Future begins nowThe engaging and interactive sessions throughout the two-day conference put forward interesting solutions to streamline the coloured gemstone pipeline effectively. This was the first time the coloured

gemstone industry had met to discuss the issues that had plagued it for so long. The interactive session helped gain insights into the problems faced by each segment of the pipeline. The give and take will lead to a better understanding and cohesive action going forward.

Rajiv Jain said in his closing remarks, “I am happy to note that the first Mines to Market for coloured gemstones has created awareness about the need to grow together. Seminars such as these are an

eye-opener. I am sure every one of us will benefit and take away some key points that will help us achieve our goal collectively in the long run.”

GJEPC vice chairman Sanjay Kothari said that this was only the beginning. “At a later date, we may even consider holding the conference in Thailand or China. The Mines to Market initiative is an ongoing process in that it will not only bring positive results for our country, but the industry across the globe.” IC

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Modernise Mines

Gavin Pierce, head of business development & research, Richland Resources, the largest miner of tanzanite, said that his company was a large scale gemstone miner providing regular bulk supply of gemstones to meet the needs of the world’s gemstone producers and distribution channels. “Our customers in India require tonnes of gemstones every day and that is what we deliver,” he said.

Governments of small countries expect a greater return from their economic resources, and that includes coloured gemstones. Small scale production and artisanal mining do not provide that. A lot of these governments, especially in Africa, have been relying on international aid to make ends meet, but this is not the case anymore. For instance, Tanzania’s aid budget from the UK was cut in half. The country was increasingly scrutinised by the aid agencies and world governing bodies like the UN who questioned what the country was getting out of its resources. “The country realised that it wasn’t benefiting from small scale artisanal mining, but it was gaining from having large, organised mining, which was paying its taxes and at the same time meeting the needs of the coloured gemstone industry,” Pierce said.

He continued, “About 100 years ago the diamond and coloured stone industries were about the same size. Along comes De Beers, which started large scale mining, moved into exploration, processing and distribution, and all of a sudden today we have rough diamond production currently worth about $10 billion per year. And the global value of coloured gemstones production is only around $2 billion. Why is that the case?

“Diamond prices have gone through the roof over the last 50 years, while coloured stones have seen small increases in recent years, but nothing compared to diamonds. If coloured stone prices grew then it would allow for further exploration, mining and production would rise significantly, which, in turn, would provide more material for the Jaipur and Indian markets to send out to the world.”

Unlike the diamond industry, which is characterised by mechanised mining, coloured gemstone mining is fragmented and dominated by artisanal, small scale mining, which is associated with poor mining conditions,

poor health and safety standards, and poor environmental practices, lack of legal rights, child labour, and no collection of royalties or taxes. As a result, there is very little going back to the local communities or governments.

All these factors lead to irregular supply, price fluctuations, and a lack of consumer confidence. “We all need price stability, regular production and we all want to be able to market our goods well,” Pierce said.

Richland’s TanzaniteOne mine produced 2.6 million carats this year and next year’s projections are higher. “Our customers need more goods and we will find it for them. Our geologists have measured the deposit all the way down to the reserves to some 2,100 metres. That works out to about 50 million carats of tanzanite. If we produce at 2.5 million carats per year, the mine will have life of 20 years.”

He informed that the level of infrastructure needed to sustain production at that depth is incredible and requires a lot of money and investment. “We picked it up at the stock exchange and from people who invest into gemstone mining for that very reason – stable supply going forward. We utilise modern techniques, geophysics and geochemistry to find the next deposit so that you have got something to polish tomorrow,” Pierce commented.

He observed that the majority of the coloured gemstone industry has not employed advanced cutting techniques, which can bring out the beauty of the stone and deliver it down to consumers in new and innovative way. Most would choose a ‘weight cut’ and compete with each other on the basis of price, rather than produce the optically best cut and compete on the basis of beauty.

“Coloured gemstones are so unique and so much rarer than diamonds, but we have fallen so far behind the diamond industry over the last 50 years. These difficulties are also opportunities and there’s a call for action for the entire industry to get involved not only in your own area of expertise, but in every aspect of the business from mining, polishing and marketing. There are opportunities for everyone to vertically integrate to move further into the business. Only then will the coloured gemstone industry catch up with the diamond industry and surpass it by a mile,” Pierce concluded.