Gemfields Resources, a London-based gem exploration and mining company, through a subsidary, recently acquired a 75 percent stake of the Kagem Emerald Mine in Zambia, arguably the world’s largest emerald mine, and raised $60 million to fund the increased development of the mine. The project has a total marketing capitalization of more than $200 million.
But owning the mine and increasing production is just one step in the process. On Aug. 19, the company will officially open a cutting and polishing plant in Jaipur, India. In addition, the company is working toward the following goals:
* Build an exclusive network of manufacturers to purchase rough as well as cut and polished emeralds;
* Create a certification program that will tell consumers, among other things, the gem’s origin or whether it is treated;
* Have third-party certification of the mine’s environmental and social impact; and
* Develop a marketing program that will be used throughout the supply chain.
The company should be able to start supplying emeralds in this consolidated effort by January, 2009, Gilbertson said.
An example of emeralds from the Kagem mine on display at IIJS.
The idea, Gilbertson, said, is to consolidate the emerald industry by creating emeralds whose origins can be traced from the mine to the retail jeweler so consumers will know the history of each stone.
“We want to provide rough, and cut and polished gemstones to the market in a timely and ethical fashion,” Gilbertson said. “This gives people an unprecedented level of confidence that the Gemfields emerald they purchase is a credible product.”
In addition to being more ethically sound, there are business advantages of being the only mining company that can provide a particular gem from a single source. For example, it will mean that jewelry designers and manufacturers will be able to quickly provide uniform stones for jewelry sets.
“What we are now in a position to do is bring these emeralds straight to the manufacturing jeweler,” he said. “There’s no one else who can do that.”
In addition to having the capital to put the plan into place, the company also boasts some strong pedigree. Mining investment company, Pallinghurst Resources LLP, purchased the 75-percent stake in the Kagem mine. Pallinghurst is headed by Brian Gilbertson, the former CEO of BHP Billiton plc, the world’s largest mining company. He also happens to be Sean Gilbertson’s father.
The younger Gilbertson is a director in Fabergé Ltd. (a Pallinghurst portfolio company).
In addition, the founder and executive vice chairman of the company is Rajiv Gupta of the Gupta family of Jaipur, one of the world’s largest emerald dealers.
This pedigree at least partially explains why Gemfields is entering into a 15 year license with Fabergé Ltd. to use the Fabergé name in branding, marketing, and selling colored gemstones (which includes a variety of colored gemstones from other mines that the company is operating). Gilbertson said his company will be supplying the top emeralds from the Kagem mine to the famed luxury jeweler.
With the mine in operation and a cutting and polishing plant coming on board, Gilbertson said the company is now building its network of suppliers. He said the company is being very selective on who they will choose and is still trying to define how to qualify these suppliers and deliver the gemstone. However, he does seem opposed to the sightholder model.
“I wouldn’t actually say we are doing sights,” he said.
Gilbertson does say there is demand for his emeralds. As an example, at the Gemfields booth at IIJS, where the interview with JCK was taking place, there were a handful of people milling about. Gilbertson said they were all gem dealers dying to get their hands on some emeralds.
In regard to the marketing plan, again he didn’t provide specifics, but mentioned the Tanzanite Foundation as an example of a successful “structured and coordinated” marketing campaign.Follow JCK on Instagram: @jckmagazine
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