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“The demand far exceeds the supply,” says Dev Shetty, Founder-President & CEO of Fura Gems

09 may 2022

dev_shetty_xx.pngIn 2017, after a decade as chief operating officer and board member at Gemfields a coloured gemstone mining company, Dev Shetty took the courageous step of starting, from scratch, a mining company. He named it FURA Gems. Today, it is one of the largest organized colour gemstone–mining companies in the world.

Now based in the United Arab Emirates, FURA has more than 1,200 employees across the three mining subsidiaries, in Colombia, Mozambique and Australia, producing emeralds, rubies and sapphires, respectively. It is the first truly pioneering, nimble, creative and ethical enterprise to cover the entire spectrum of colour gemstones.

In just a matter of few years Shetty has, almost single-handedly, boosted transparency and stabilized supply in the colour gemstone trade. He wants his company to be the driving force in an industry that, so far, has lacked a unifying vision. The changes already are transformative. Shetty has also been instrumental in bringing in the fastest turnaround of the previously unorganized Australian sapphire trade.

Under his leadership, FURA Gems is the fastest-growing colour gemstone mining company with the sole objective of ensuring stability and traceability of ethically mined colour gemstones from rough to retail. Production plans for 2022 include 10 million carats of Australian sapphires, 8 million carats of Mozambican rubies and 400,000 carats of Colombian emeralds.

For the benefit of our readers, can you update on FURA Gems’ activities since we featured you in 2018, giving details of growth, expansion, new projects etc?

FURA GEMS has indeed come a long way since we last spoke in 2018. When we last spoke we had just acquired our first asset, which was the Coscuez emerald mine in Colombia. Since then we have acquired ruby licenses in Mozambique and sapphires licenses in Australia. In 2019, we began the procedure of acquiring ruby mining licenses in Mozambique and completed the acquisition of a 435 sq km land block by 2020.

By 2020-end, we completed the acquisition of operating companies in Central Queensland, Australia, to consolidate our sapphire mining base of a cumulative area of 20 sq km.

The year 2021, was our first revenue-generating year. The year saw 3 FURA gemstone auctions taking place. We did our first auction of Colombian emeralds in Dubai and Bogota in March, followed by our first Ruby auction in Jaipur and Bangkok in September. We completed the trilogy of the auction by hosting our first auction of Australian sapphire in Bangkok in November. All the auctions were well received by our customers.

In addition to our auctions, we also started our marketing initiatives in the American and Indian markets, by setting up the FURA marketing council (FMC). The FMC will help build aspiration and demand for emeralds, rubies and sapphires in our key markets, by providing the trade co-op marketing support, education for sales staff etc.

As we talk today, we are also setting up another mining operation in Madagascar for sapphires.  

Please give us more information on the mines as well as the gems sourced from Colombia, Mozambique and Australia. What’s the production volume in each of the gems per year?

Our mine in Colombia, the Coscuez emerald mine, has been producing emeralds for the last 400 years, and it produced as much as 70% of all Colombian emeralds in the 1980s. Since acquiring the mine FURA has worked on the development of the mine from a small scale mine to make it a large world-class mine.

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Though Covid 19 impacted us, as it did to most others, we made significant progress during the two years in terms of my development and understanding the geology. We are now employing close to 600 people, 90% of whom come from the surrounding community. Colombian emeralds have a global reputation because of their quality and limited supply. We plan to produce 400,000 carats in 2022 and over half a million carats in 2023.

We started mining for rubies in Mozambique in early 2020 and we have been delighted to find a broad spectrum of ruby in various colours from rich and vivid red to pinkish hues. The bright colour and fluorescence of these rubies are superior to rubies from other sources of Mozambique because of their increased concentration of chromium and vanadium, as opposed to iron, which gives a dark tinge.

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The colour and the fluorescence of our rubies matches those of the ones which are mined in Mogok, Burma. Mogok as you must be aware has produced the best rubies in the world. In January of 2022, we commissioned our second large wash plant in Mozambique which will take our production up to about 30 million carats.

In Australia, we started our mining towards the second half of 2020. Australian sapphires have a rainbow of colours to offer, like blue, teal, green and parti (multi-colour) and yellows. Australia in the 1990s was the largest supplier of sapphires to the world market. However, due to the lack of investments in modern mining and marketing, the Australian sapphires never got the recognition and price they deserved, as a result, production became unfeasible. We have in the last year created a world-class grading system that is adding immense value to the trade by ensuring better price realization at every level of the pipeline. At the first auction, we had buyers from all large cutting and polishing centres including buyers from Australia and New Zealand. We project a production range of 10 million carats of sapphires in 2022.

As a stakeholder in all the mines you source gems, what steps have you taken to date for the welfare of the mining employees and communities around the mining area?

Holistic community development is a compulsory task for the dedicated CSR wings of FURA GEMS at each mine. To start with, the Coscuez mine in Colombia has achieved gender parity with an all-woman wash plant launched in 2018, a first-of-its-kind in the gemstone mining sector. FURA GEMS strictly adheres to decent gender distribution in all its international operations. CSR has been an intrinsic element for FURA’s body of work, and we have taken significant measures to improve the standard of living of communities related to mining divisions from Covid-19 healthcare, education to infrastructure development.

To share a few instances, we launched the FURA Academy, which trains over 3,000 people yearly on 50 courses, thereby helping them generate employment opportunities in Colombia and abroad. We have also conducted afforestation drives with schoolchildren therein. During the Covid pandemic, we launched a program called “Community First” which provided meals to 4000 families of our nearby community for 2 months.

In Mozambique, we laid the foundation of a primary school in the Cabo Delgado province, which will increase the literacy rate and also create job opportunities for indigenous people right from academics to construction. We have also extended emergency transport services for villagers in Montepuez and are increasingly involving community leaders in our mining plan to sustain a shared long-term vision. We also supported the Government of Mozambique by providing them with 1 million PPE kits to tackle the Covid 19 crisis.

In Australia, we support the mining association with technological backup, sponsor the local community newsletter, provide nutritious meals at subsidized rates to needy, elderly families in Central Queensland under the Meals on Wheels programme. We are also revamping the sapphires mining sentiment by partnering with the local Gemfest, supporting local lapidary schools with cutting and polishing training and helping artisanal miners sustain tourism.

What are FURA’s efforts to ensure that all your gems are sustainably and ethically mined? Is artisanal mining an issue in the countries you operate? If yes, how does FURA manage to strike a balance?

As a large-scale miners in all the geographies that we mine, we not only adhere to all the laws of the land but also adhere to international best practices.

We ensure that not only do we pay all royalties and taxes we also pay over the minimum wages and ensure proper health and safety for all our employees.

We follow all the procedures in terms of safe mining and also taking care of the environment.

We encourage all our clients to give complete disclosure of the gem they are selling, which increases the confidence in the category. 

I feel Artisanal mining has its place in the mining world. Although the challenges of artisanal miners are less in most of the Fura operations, we have constant dialogue with the artisanal miners explaining to them the law of the land, engaging with them on understanding their challenges and we guide them to come to another source of earning through our CSR platform. In Colombia post-acquisition, many of the artisanal miners were given formal employment within Fura’sCoscuez mine and our CSR program including the Fura Training Academy is targeted towards supporting community members including artisanal miners to have long term sustainable earnings.

According to media reports, Andhra Pradesh is set to launch a huge search for gemstones… including diamonds. Does FURA have any plans for JV in mining projects in India… on the horizon?

India is a very important market for FURA GEMS. A significant part of our emeralds come to Jaipur for cutting and polishing. We are also seeing Indian companies expand into ruby cutting and polishing. In terms of a consumer market, India is among the top 3 markets and we will be spending a significant amount of our budget on marketing to build awareness and demand for our product category. We have so far not explored the mining opportunity in India, however, given favourable conditions for mining and identification of an exclusive gemstone, FURA Gems can certainly be interested.

What are FURA’s marketing programs…solo or on partnership? Can you spell out your current pattern of catering to gem buyers? Which market/s are you focusing on at present?

At FURA marketing is one of our key pillars. We believe that one of the reasons for this sector not to flourish is the lack of marketing. Last year we set up the FURA marketing council, which is the marketing arm of FURA GEMS. We have aggressive plans for supporting the trade and creating desirability for the category. We are currently working towards launching our first mega global campaign.

We will be supporting all our trade partners with a compelling point of sale material. We will also be working on co-op marketing campaigns with our retail partners to drive demand for the category. Another key area that we want to focus on is education. Our research shows that lack of product knowledge among retail sales staff is one of the important reasons why people don’t buy colour gemstone jewellery. We want to support the sales staff through both online and offline training modules which we plan to roll out in the 3rd quarter of 2022. Fura believes that partnership with progressive players in this space is the way ahead to push sales for our gemstones. Currently, we are focused on the USA, India, the Middle East and China.

Which global market/s do you see growth opportunities for colour gems exports in the future? Which countries do you export to at present?

FURA sells its rough gemstones through an auction process.

For our emeralds, we have clients from India, Colombia, the USA, Hong Kong and UAE, Ruby clients come from Thailand, India, Sri Lanka and Hongkong. Sapphire clients come from Thailand, Australia, New Zealand and Sri Lanka. These are predominantly countries that import rough for cutting and polishing. The cut and polished are sold to jewellery manufacturers across the world.

Finally, what kind of competition do you anticipate in the coloured gems sector in the future, given that production is on the rise leading to a fall in prices?

Fura assesses a massive gap in the demand and supply; the demand far exceeds the supply. Besides, as the narrative of sustainability gets stronger, consumers will lean towards ethically sourced gems. A large part of the industry is still unorganized, FURA sees tremendous opportunity both in terms of increasing supply and better prices.

In the case of this category, production rise is not going to lead to a fall in prices for several reasons.

1) Current demand exceeds supply. Of the total rough market of about US$ 2 billion for emeralds, rubies and sapphires only 15% comes from organized sources. This means that if FURA can further organize the unorganized market we will see a massive increase in organized sales.

2) The trade has not been assured of steady supply thus far. Now, with Fura’s promise of steady and scalable supply, manufacturers are expanding capacities. They too see the opportunity in increasing infrastructure as the demand has always been there.

3) Last but not least, as retailers down the stream identify the transparent and ethical source for varied gemstones from Fura, there will be a larger shelf space for such colour-gems.

Overall increased production will not only fill up the latent demand but create greater desirability due to the increasing visibility of colour-gemstones in the market.  

Confident of exponential profitability in this industry, Fura Gems harbours a shared vision of making colour gemstones a US$ 6 billion industry with the support of stakeholders and the interest of competitors over the next 5 to 7 years. 

What are your views on the coloured lab-grown diamonds (LGDs) scenario globally? Prices of LGDs are expected to fall … so, will LGDs be another area to compete for coloured gems, going forward?

Our research has shown us that lot of retailers are using synthetic colour gemstones because they are not able to find natural ones. Even if we double our production, we won’t be able to fully meet the demand for natural emerald rubies and sapphires.

It’s an interesting debate much like the global natural diamonds industry, which is going strong even after the invasion of LGD. That is because natural gemstones will always hold their enduring value and will get rarer with time. As opposed to lab-made products whose availability is subject to technology and mass-produced. It will lack premium-ness and fail to evoke the emotions that rare gemstones have the power to.

Natural colour gemstones, mined from depleting and exclusive sources, will inadvertently command rarity, popularity, long-term demand and therefore, a premium in the price. Natural colour gemstones will always have a league of their own as it is meant for a customer base that likes to value and treasure their gemstones forever.   

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished