Part 2: KPCSC wants Russia to help end impasse on new definition of conflict diamonds

In the first installment of this two-part exclusive interview with Shamiso Mtisi, the coordinator of the Kimberley Process Civil Society Coalition (KPCSC), we focused on illegal diamond mining in the continent and where the contraband ends up...


Part 1: KPCSC gives insight into illegal diamond mining, trading in Africa

Although the diamond watchdog Kimberley Process (KP) prides itself for significantly reducing the flow of conflict goods since its establishment in 2003, the Kimberley Process Civil Society Coalition (KPCSC) alleged that illegal diamond...

18 october 2021

The jewelry industry in Russia needs to be upgraded in a serious way

Dina Nasyrova is a vice-president of the International Jewelry Exhibition-Congress J-1 recently hosted by the Atrium of Gostiny Dvor in Moscow. As a partner and the Muse of the famous jeweler Ilgiz Fazulzyanov, she actively participated in the preparation...

11 october 2021

Smiling Rocks, a philanthropic business model, inspires companies to work for betterment of the world

Zulu Ghevriya, the CEO and Co-Founder of Smiling Rocks, Founder of Vedantti Jewellery and Managing Director of Prism Group has been in the diamond and jewellery industry for over 20 years. Zulu started his business, Prism Group, as a natural diamond...

04 october 2021

Work hard and you will find success

Eduard Utkin, Director General of the “Jewellers’ Guild of Russia” Association, expert of the RF Chamber of Commerce and Industry’s Committee on Precious Metals and Precious Stones, told R&P about implementing the SIIS PMPS (State Integrated Information...

27 september 2021

Diamonds vs coloured gemstones

15 march 2021

Rough&Polished correspondent Sergey Goryainov sat down for a talk with Professor Andrey Ametistov, a Russian gemologist to discuss similarities and differences between the diamond market and coloured gemstones market.

Over the past five years, the technologies for the synthesis of gem-quality diamonds have been developed by leaps and bound and there has been a corresponding industrial and commercial boom, as a result, the supply of high-quality large-sized synthetic stones is growing exponentially, the synthetics’ production cost is falling, and it can be said with a high probability that this process will develop quite fast. The diamond market has never seen such a situation before in its history unlike the market for coloured stones where high-quality synthetics at a relatively low production cost have been present for many decades. What is the situation today with the jewellery synthetics expansion on the coloured stone market?

Since the widespread implementation of the growth processes (Verneuil and Czochralski growth methods) for the production of synthetic spinel gemstones, sapphires, rubies ​​and other stones in the post-war period, mainly for the needs of electronics and optoelectronics, the coloured man-made stones have never occupied their niche in the premium jewellery market. The only exception was the jewellery manufacture in the USSR (interestingly, it was under the Ministry of Culture of the USSR). At present, it is impossible to find a synthetic centre stone set in an expensive precious metal (gold, platinum or palladium) in the national markets. The Russian gold jewellery market is no exception. The jewellery piece made of a low-end precious metal setting studded with coloured synthetics is considered futile. A few exceptions are the jewellery pieces supplied by swindlers or made by ignorant jewellers. At the same time, with the rare exception of the jewellery from Thailand and India, the pieces studded with man-made stones predominate on the silver and fashion jewellery market. Buyers of various wealth groups are willing to buy highly treated natural coloured stones and purely natural ones. At the same time, the majority of buyers refuse (at this point) to buy any synthetic coloured stones. The consumers prefer a heavily treated, lower-quality but natural coloured stone over a synthetic one. And this happens amid the steady increase in the prices for coloured gems by 10-80% per year, which we have seen over the past decade. Among the price rise leaders are the aquamarines of a Santa Maria colour, watermelon-colour and other bright tourmalines.

The methods of ‘enhancement’ of the coloured gemstones are constantly being improved, is there a convergence of the markets for ‘treated’ natural stones and synthetic ones?

Forty years ago, the radiation treatment, impregnation, gluing, crack healing, doubletting, scribing, atomic and molecular volumetric and near-surface diffusion, and much more ways of treatment were added to the simple thermal treating the coloured stones to improve their colour. The widespread implementation of these new technologies resulted in the concepts of synthetic and natural stones coming closer. The difference between 100% natural stones and highly treated composite studs in jewellery pieces is gradually disappearing. The price gap is also narrowing. For example, in 2002, the price of an untreated ruby ​​of average quality was ten thousand times higher than that of a ​​similar quality ruby with healed cracks. Now, you can find an untreated ruby, which is only 10 times more expensive than a hardened and filled stone. The market for coloured stones has adapted to the demand for stones ‘that were originally natural’ and over 80% of the coloured and other gemstones are now treated. At present, 99% of rubies, 97% of emeralds, 95% of sapphires of various colours, 30% of aquamarines, 70% of morganites, 95% of tanzanites, 30% of demantoid garnets, 99.99% of topaz of various colours in the world market were thermally treated and underwent highly complex treatment, as well as 95% opals that required their proper drying (otherwise, the stones would simply fall apart while wearing a jewellery piece). Most tourmalines (except for Paraiba colour stones), red garnets and tsavorite garnets, alexandrites, amethysts and a great many of the most beautiful, rare gemstones - the demand for which is constantly growing on the market - remain untreated so far.

Is there a trend towards improving the technologies aimed at making it difficult to identify synthetic stones?

The speedy progress of the technologies for precious stone growing intended not for optoelectronics but for a jewellery market, mainly in the United States and Japan, fell on the period from 1990 to 2010 and saw only some temporary success. The Chatham firm was able to use the silicate fluxes to obtain the emerald crystals in the form of druses - the twin clusters of hexagonal prisms - on a reproducible basis. The crystals could be obtained with any number of structural defects, with the inclusions typical of natural emeralds of matrix rocks, with simultaneous alloying with two Cr+V chromophores and, accordingly, of any ‘Zambian’, ‘Colombian’ or other colour. For three years, the Chatham emeralds triumphantly hit the precious stone markets. Then, sufficiently effective identification methods were developed and these synthetics disappeared from the qualified markets. Although, judging by the repeated mistakes made by the Russian expert laboratories, the Chatham emeralds remain the most difficult synthetic emeralds to identify.

For some time, the Gilson’s project for the manmade ‘rod-globular’ opals synthesis was economically efficient. The project was profitable for 10 years due to high prices for Australian opals, although the identification of the Gilson opals was not difficult from the very beginning (the rod structure of cabochons from the girdle side). However, the discovery of a deposit of Ethiopian hyalites - water opals - with anticipated reserves of up to 40,000 tonnes in the Wollo Plateau led to the almost complete disappearance of these man-made stones from the markets. The Ethiopian water opals turned out to be cheaper than their synthetic counterparts and practically crashed many opal mines and opal processing factories in Australia.

The third rather successful project for the synthesis of one of the most popular gemstones continues to be profitable even now. This is a semi-synthetic turquoise produced by Kingman (USA). The Kingman dyed turquoise stones synthesized from natural white phosphate do well, they are set in gold and platinum and sprinkled with small diamonds in any jewellery pieces, but in the USA only. The high-end jewellery studs are called ‘Kingman Turquoise’. So, they really make no secret of the fact that the stone is synthetic. Moreover, at present, 50% of the turquoise stones on the world market are represented by the dyed howlite minerals, 10% - the dyed wastes of the aluminium production, and by 25% - by the dyed magnesite. The annual turnover of the synthetic substitutes of one the most popular gemstones in the world is up to $100 mn per year.

So, it can be said that the synthetics have taken their own niche, and there is practically no competition with the natural stones, at least for now.

How big is the market for jewellery with coloured synthetic stones?

Large quantities of man-made stones are widely used only in silver jewellery. Basically, these jewellery pieces are manufactured by the Asian cluster jewellery giants in the cities of Shenzhen, Panyu (a suburb of Shanghai with a population of 7 mn people), Bangkok, Chanthaburi. At these factories, the central very low-quality natural stones are surrounded exclusively by cubic zirconia. The financial turnover of these silver giants is comparable to that of the entire jewellery industry in the rest of the world. But cubic zirconia is the main synthetic stone used, by volume. It is followed by the imitations of jadeite and jade – China accounts for the entire volume of imitation of these two stones. In India, glass and goshenite simulants of emeralds dominate as well as aleksites. The aleksites are not produced in the same quantities as turquoises or synthetic opals, but they are promising. The aleksite is a super-slow curing glass with a short-range order and a Mohs hardness of 6-7. Aleksite is alloyed with rare earth metals from China. It is easy to distinguish aleksites from the natural stones. But, for example, the sultanite sold to the tourists in Turkey for 5 years has been the only one like that.

Recently, the diamond industry has been actively discussing the topic of blockchain in relation to the diamond trade. It is said that the ethical aspect of the goods is very important for the new generations of consumers, therefore, it is necessary to provide the buyers with full information about the diamonds, covering all parts of their supply chain from their mine to a store, so that there are no armed conflicts, crime, child labour, etc. Probably, the major diamond producers ALROSA and De Beers and other companies are capable of creating blockchains - distributed ledgers - that truly reflect the full history of diamonds. But it is also obvious that the idea becomes meaningless when a buyer purchases, say, a ring with an emerald as a central stone surrounded by five small diamonds; the buyers will be able to get complete information for the diamonds, and as for emeralds, they will be able to get, at best, a standard gemological certificate, in which the history of the stone is not indicated. Considering that up to 10% of diamond engagement rings now have ‘coloured’ stones as a central one, is it possible, in principle, to develop a technology that allows to accurately trace the coloured gemstones from their mine to a store, and is there any use at all in using such technologies?

This attempt is doomed to failure for the following reasons:

- it is necessary to clearly establish an exact correlation between the stone ‘on the finger’ and its trace in the Internet. That is, the stone must be marked. Otherwise, it is not clear what exactly all the blockchain information would relate to. At present, the problem is more or less solved for polished diamonds. Possibly, the problem can be solved for individual non-stressed spinel gemstones. And that’s all. The ratio of the dynamic limit of the destruction of coloured stones having a non-cubic structure, their unidirectional natural dislocation pattern, strong anisotropy of all the mechanical and strength properties and thermal conductivity will lead to the inevitable destruction of any girdle of a coloured stone under strong thermal and mechanical exposure of a laser beam. In this respect, luck can come in the desktop researches only;

- the simplicity of counterfeiting and repackaging stones for marking them in various blisters, which can be made in China by a phone order within 5 days with their delivery to any place in the world, also gives an advantage only to organized fraudsters;

- finally, one need to clearly understand that a more or less powerful and well-focused laser can be assembled by any graduate student - a ‘skilled assembler’- in the garage. The marking laser is expensive for individuals only. Any organization can afford it.

As far as the ethical aspect of gemstones mining is concerned, this ‘fig leaf’ used by the mining companies is pretty self-explanatory and is meant for media. Without exception, all the mining companies operating in Africa have impoverished and continue to impoverish millions of Africans to the point of starvation for one simple reason. The miners’ concessions are paid to the governments of the countries, and hundreds of thousands of families are deprived of the means of living for a long time. The direct assistance is provided by the mining companies to local employees and their families and communities just for the advertising purposes. Local African artisanal miners prefer to work for a huge informal organization of the Guineans, the immigrants from Guinea (Conakry is the capital). The turnover of these coloured stone purchasers is many times greater than the sales of both Tanzanite One Minning Co and Gemfields Group. Taking into account the purchases made by the Indian and Thai ‘purchasers’ of stones, the annual turnover of the Guinean communities can reach $300-$400 mn. These are the most conservative estimates. Of course, these market players are not interested in blockchain.

Over the past hundred years, a huge amount of gem-quality diamonds have been mined, some of which are again in the market due to the new generations of their owners. In the diamond market, the impact of the pressure of this constantly growing ‘deposit’ on the current prices is estimated in different ways, but no one is able to provide accurate quantitative data. What about the secondary market for coloured stones? Does it affect the current prices, say, for rubies and emeralds, and if so, to what extent?

Actually, it does not affect. The secondary market for coloured stones is most developed at the auctions in Hong Kong, UK. Approximately 50% of the ‘inherited’ coloured stones have a fake provenance. The famous spinel gems, rubies, sapphires and emeralds with a real history of more than 20 years are rarely sold. Up to 95% of the family jewellery pieces sold at the Hong Kong jade auctions, at Christie’s and Sotheby ones are modern replicas.

An abundance of sectoral regulatory and advisory organizations such as the Kimberley Process, the World Diamond Council, etc. is characteristic of the diamond market. There are practically no such institutions in the coloured stone market. In your opinion, is the absence of such transnational regulatory organizations a positive or negative factor for the market?

The transnational regulatory organizations in the coloured stone market are currently impossible and unnecessary. There are too many types of goods, and there are even more deposits in many countries. The concepts of ‘still-born’ non-market organizations like CIBJO - the World Jewellery Confederation - headquartered in Paris, imposed upon the market, are rightfully rejected. After more than five years of the pressure on the market in emporiums and on the trading floors, the terms like a ‘composite’ are still not accepted, and the recommended postulates like a ‘processed [stone] means not a natural and non-precious one’ and ‘a lot of documents are needed to sell any truly precious stone’ were totally rejected by the global market. The market still uses its own terms and quality criteria. Moreover, the main thing in these established criteria is that for each type of coloured gemstones, the quality and price criteria are different, which is needless to say. The ‘fine’ characteristic for an emerald barely reaches the ‘commercial’ purity characteristic of a sapphire. The ‘vivid green’ colour of an emerald is quite ‘liquid’, and the ‘reddish pink’ colour for a ruby moves the stone to the category of rather inexpensive pink sapphires. Any regulations and standardization imposed on the market will not result in noticeable changes either in prices or in the supply and demand ratio. Over the years, the only factors have really regulated the market for coloured stones - the depletion of the traditional sources of rough stones and the discovery of new deposits as well as the development of new treatment methods.

What are the most striking events that had a significant effect on the coloured stone market over the past 50 years and resulted in significant price fluctuations?

Each of the below events caused a market redistribution in the amount of $0.5 bn or more:

- the 1970s, plus/minus 5 years. The Ceylon gem treaters developed a simple low-temperature annealing technology for geuda sapphires by way of blow-pipe heating to produce sapphires with the unique and inimitable cornflower blue colour. The exact reproducibility of the cornflower blue colour after annealing in ovens was not achieved for the rough gemstones of any origin;

- 1967 and 1968. The discovery of the colour change from polychromic, brown and gray zoisites mined at the Merelani mine to bright dichroic crimson-blue tanzanite (Tiffani proposed the name). The first annealing was carried out occasionally in a fire. In 2012, a simple and reliable sufficient indication of a ‘rough’ tanzanite was found;

- 1989. A foreman of an artisan miner team (garimpeiros) got the first occasional experience in annealing the tourmalines on a coffee hotplate at the São José de Batalha mine in the Paraiba state, Brazil. For the first time, a tourmaline of the brightest blue-turquoise colour was obtained. Before that, there was only one coloured turquoise stone - annealed brown zircon from the Ratanakiri deposit, Cambodia. In 2015, the process of losing the identity of the Paraiba tourmaline colour started, and the price declined and the market trend changed;

- 1992-2006. The technology for strengthening the fractured rubies from the Mong Hsu deposit in Burma was developed and this technology was used for block-shaped monocrystalline rubies in the zoisite rock mined at the Tanzanian Merelani deposit. The strengthening and slight improvement of the red colour was achieved by impregnating the rubies in a superfluid melt of light orange oxide Pb2O3 at 600-750 degrees Celsius. The volume of the ruby sales in the world market has increased more than 100 times;

- 2008. The richest deposit of opals of various basic colour and structure was discovered on the Ethiopian Wollo plateau. This resulted in the significant price drop for Australian opals, including the black ones;

- 2008-2012. The world’s largest alluvial blue sapphire deposit, Bo Phloi, in the Thailand’s Kanchanaburi province totally depleted. In the 21st century, the deposit was developed using excavators and the flotation plants for selection. Until 2015, every four out of five blue sapphires used in jewellery pieces all over the world came from this mine. The prices for blue sapphires increased more than threefold.

The rough diamond market is divided between several major companies, dozens of small producers traditionally operated on the coloured stones market, but the Gemfields Group appeared and broke this tradition. Can this experience be considered successful and setting the trend for the market defragmentation?

The Gemfields’ experience is mixed. The first concession acquired for some part of the Kafubu emerald deposit was extremely successful, but only thanks to the way - revolutionary for Africa - of selling the selected stones, and not the stones mined during a day or a week in ‘dirty’ piles that buyers cannot identify. First, they were sorted out according to their quality, then the dealers from Israel, India were invited and they got the stones they required for their clients. In the rest of Africa, this simple principle does not work. There are extremely unsuccessful purchases of the stone parcels by the Israel’s cutters and Indian craftsmen, since everyone purchases stones not only for their customers.

The Gemfields’ second experience - the purchase of a ruby ​​mine in Montepuez, Mozambique, balances on the brink of profitability and future prospects due to the initial evaluation of the red stone quality. There is no public information about this, but all the rubies from Montepuez are ‘two-dimensional’ and they are flat. The Montepuez rubies have the only possible crystallization form - a low hexagonal prism; besides, during the growth, the layers in the prism were prone to twinning around the basic axis ‘C’ with indices of the <0001> type in the hexagonal lattice of corundum. As a result, it is quite possible to cut ten 1.5-2 carat rubies from the largest 40-carat Rhino flat ruby found at the mine, but not two rubies weighing 5-10 carats. However, from each ruby ​​from the Mogok and Mong Hsu deposits in Burma, or from the Tanzanian Morogoro or Winza deposits, one gemstone can be cut and polished, but its weight could be half or 35% of the rough ruby. The rubies with an octagonal bipyramidal crystallization form dominate at these deposits. Gemfields has enormous losses when selling its stones from the mine because they do not take into account the simple form of the crystal growth pattern.

A couple of years ago, the Gemfields Group announced a total expansion into the mining markets of other African countries and Brazil. But all the company’s price proposals in these countries were categorically rejected.

Historically, the diamond market has evolved under the monopoly control by De Beers, which bore the burden of the global generic marketing for a long time and financed its diamond advertising campaigns - engine of the market growth for several decades - using their super-profits. After the De Beers’ monopoly control over the market came to an end, the generic marketing practically stopped and diamonds were rather behind other sectors of the luxury market. There has never been any monopoly or organized generic marketing in the coloured stone market, nevertheless, it is relatively stable. What makes consumers to take their interest in the coloured gemstones today?

The factors of the growing popularity of the coloured gemstones is explained by their rarity, availability, the widest choice of colours, sizes, qualities and, most importantly, commercial legends. The coloured stones have many unique, almost mystical optical effects like the cat’s eye, dichroism, adularescence, labradorescence, iridescent diffraction, iridescent opalescence, the strongest multicoloured play of light in sphenes, zircons, demantoids, Mali garnets, golden labradorites, as well as the light change effects in various types of corundum, alexandrites, andesines, garnets, sultanites, and blue opalescence due to the Tyndall effect in moonstones, and much more. The choice of the effects you like is practically unlimited.

Sergey Goryainov, Rough&Polished