GEMFIELDS' inaugural ruby auction in June. Photo: the GIA

GEMFIELDS' inaugural ruby auction in June. Photo: the GIA

Gemstones on Jermyn Street: White is a Colour

Issue 104, October 2014

Continued from Page 2 ➤

Politics

What are the risks? Political risk is one of them.

Mimicking Botswana's decision in diamonds, Zambia's government placed a ban on overseas emerald auctions last year, threatening the company's ability to fly supply to the jewellery industry, which instead now has to board connecting flights to Lusaka.

Per carat prices have not been impacted, hitting new records in the capital, but the episode highlights the fact that coloured gemstones are rarely found in docile jurisdictions, largely explaining why the industry has deterred capital to date and remained a fragmented niche.

Trading

Harebottle's response to the ban was immediate.

The company has upped its trading operations, generating sales of $22m in the last 12 months, making it decreasingly dependent on any one government. Besides emeralds in Zambia and rubies in Mozambique, it also has exploration licenses in Madagascar, trading offices in Brazil and as of last month, sapphire trading operations in Sri Lanka.

“We're not a trading company,” Banks says, “and we focus our trading efforts in the areas where we are mining, or hope to be mining in the future, to get a better understanding of the market, but it is becoming a more important part of our business and a part we hope to expand quite rapidly. It also helps us to channel the supply and to be sure that the right goods are going into the right hands.”

“We're as concerned about who we sell to as the price we sell for,” says Harebottle, putting an emphasis on jewellers who invest in promoting coloured gemstones at the retail level. The company invited 50 companies to its inaugural ruby auction, which it intends to refine towards 30.

Factoring in ruby revenue and Kagem could soon account for less than a third of overall group revenue, even before an expected growth in trading, or rising sales at Faberge, the company's retail outlet, which is intended to foster demand at the high end of the consumer market, where faux leather handbags vie for attention with a British Airways gold card.

Harebottle says “nothing is finalised as yet”, but also intends to negotiate a low-cost expansion into Colombian emeralds. Historically a hotbed of gangsterism and grenade attacks...

Continue

“Mila had her baby last night.”

RELATED NEWS

US Buyers Turn to Emeralds, Rubies & Sapphires

Coloured gemstone imports
surge in Switzerland, China and the US

............................................

Gemfields Tightens Controls Over Coloured Gemstone Supply

Emerald heavyweight Gemfields expands into rubies on output from Montepuez

............................................

India's Rupee Crisis Threatens Rough Diamond Prices

Business stops on the Bharat Bourse, as dealers are priced out of the market

............................................

............................................

Brian Gilbertson:
The Industry's Godfather

BHP Billiton's founder gives widest ranging interview of his career, tips "Ivan" for industry leadership

Rapaport: Bomb Threats, Diamonds & Bullet Proof Vests

Martin Rapaport's perilous route to becoming the diamond industry's most influential body