DE BEERS WON’T SUPPORT SMALL DIAMOND PRICES
Producers of small diamonds outside the Central Selling Organisation umbrella will no longer “get a free ride” from De Beers’ market protection and advertising, De Beers director Gary Ralfe told participants in the second Financial Times Diamond Conference in London Oct. 27. His blunt approach means that the two-tier diamond market is now a reality. Market forces will determine small diamond prices while larger stones remain De Beers-protected.
The new get-tough attitude prompted Antwerp banker Paul C. Goris, a director of Antwerp Diamond Bank, to say publicly what many have been saying privately: “We must reconcile to the fact that the days of a predictable and stable market and a single-channel supply, with guaranteed profits, probably are over and that the diamond business is in a transition to a free market environment.”
Predictably, Argyle’s rough diamond manager, Mike Mitchell, and a top Indian diamond manufacturer, Ashish Mehta, asserted that failure by De Beers to support the small-diamonds market eventually will weaken prices and demand for larger goods.
In his presentation, Ralfe warned that the CSO “may not defend prices in certain near-gem or cheaper qualities.” Nor, he said, will it allow producers such as Argyle or Russia to move in and gain market share in the sale of these diamonds while De Beers stocks them.
Ralfe drew the “tier” line at three-quarter-carat rough which polishes out to a fifth of a carat. He explained that rough diamonds larger than that represent about two-thirds of the total value of diamonds sold by the CSO. These stones have risen in price even in the “difficult ’90s,” whereas those below that size have been falling.
After the conference, a number of top Indian manufacturers complained that price erosion is indeed growing and blamed top CSO executives for adopting what they claim is a contemptuous attitude toward small diamonds. In the words of one Indian sightholder: “At the beginning of this crisis, the price declines were centered in the tiny stones under 50 per carat. Then it was the 5 to 7 pointers that were hit and now we are seeing problems even in melee and 20 pointers.”
Prices of some goods – especially smaller, brownish polished – have declined as much as 35% and are declining still, according to a major Indian firm. – Russell Shor
TV REPORT PROBES DRILLED DIAMONDS
Jewelers in the Philadelphia area braced for a pre-Christmas report on undisclosed fracture-filled diamonds and an attack on laser-drilled diamonds by TV consumer reporter Herb Denenberg, of the NBC affiliate WCAU.
Although the news segment featured reports of undisclosed fracture-filled diamonds, the bulk of Denenberg’s report took on the Federal Trade Commission’s ruling that allows jewelers to sell laser-drilled diamonds without disclosure.
“There are problems out there of all kinds, but I wanted to focus on laser drilling because the FTC has copped out, making legal what should be illegal,” says Denenberg.
In preparing his reports, Denenberg worked with retail jeweler John Anthony of John Anthony Jewelers, Bala Cynwyd, Pa., and New York diamond dealer and gemologist Craig Nass of Nass & Associates.
Anthony says that fracture filling of laser drill holes has become a real problem. “I’ve had four such stones – engagement rings bought elsewhere – come through my store in recent months, so I know the problem’s getting worse.” He believes many go undisclosed into cheaper tennis bracelets.
“I’ve taken in [for repair] two tennis bracelets like that and talked to jewelers who’ve discovered the fillings when they’ve repaired some of these tennis bracelets,” he recounts. “The torch goes on and all of a sudden the diamonds look crazy.”
Nass, a former instructor on fracture filling and diamond treatment identification for the Gemological Institute of America, says his role on the segment was to show people how to find fracture fillings on their own.
Like Anthony, Nass says he finds “drilled-filled stones in parcels all the time,” noting that filled laser drill holes are just as easy to detect as filled cracks and gletzes.
“I’ve learned to check everything. A few weeks ago, I had a parcel of 100 quarter caraters and found two filled stones.” – Russell Shor
MONTANA SAPPHIRE IN TROUBLE – AGAIN
American Gem Corp., the self-proclaimed largest sapphire mine in North America, announced on Sept. 27 that the company is restructuring in an apparent attempt to stay in business. Sapphire production has proven costly and while AGC claims to have a large inventory of calibrated goods, it has reported low sales year after year.
Losses have been substantial since AGC started in 1992. The Philipsburg Mail in Granite County, Mont., reports the firm showed a net loss of nearly $4 million in its first four years, while spending well over $12 million on property alone. Estimated losses were reportedly $3 million in 1995, $5.36 million in 1996 and $8.3 million through March 1997. JCK confirmed these figures with other sources.
To develop its properties, AGC offered shares through the Toronto Stock Exchange. An estimated $20 million worth were sold in its first years of operation, with another $10.5 million raised in October 1995 and an additional $1.3 million last August. Now, according to the Jewelers Board of Trade, AGC reportedly is offering shareholders a buyback at 55¢ per $1, subject to shareholder approval.
While the company claims it has mined a lot of rough – more than 4 million carats in 1996 alone – it has sold little. AGC has reported its value as $60 million, yet shows total assets of around $16 million. Sales from January ’94 through March ’95 were only $5,681. Sales for the year ending in March ’96 were $131,000, and rose to $1.4 million for the next year, through March ’97 – still not enough to offset expenses. This past year, Gregory Dahl stepped down as president and CEO, becoming chairman.
Great Northern of Australia, which mined 25 million carats of sapphire annually in that country, was under contract to mine the Gem Mountain area which AGC bought in 1994 for $4.2 million. Although that price was substantial, the area appeared potentially profitable. But the Australians have moved out, much of the mining equipment is gone and production now is in limbo.
Because most Montana sapphire requires heat treatment to enhance its body color, furnaces are needed. In an effort to become self-sufficient, AGC spent nearly C$4 million in late 1993 to buy Crystal Research, the company instrumental in bringing heat treatment to Montana. Such spending helps explain why the Securities and Exchange Commission decided to take a close look at AGC when the company sought listing on a U.S. stock exchange. “At present, there is no assurance that any of the company’s properties contain a commercially viable sapphire bearing deposit,” said an SEC spokesman.
AGC does not control all Montana sapphire, of course. None of these developments has affected the mining of sapphires at Yogo Gulch. These stones, with their intense, almost Kashmir-like color, are the only Montana sapphires which require no heat treatment. Jeff Kunisaki of Roncor says Yogo production will continue next spring, once the weather changes. – Gary Roskin
CSO MAY GET SOME BHP DIAMONDS
The BHP-Dia Met diamond mine in Canada’s Northwest Territories probably will divide its 3- to 4-million-carat yearly production between De Beers’ Central Selling Organisation and several major Antwerp rough dealers, according to analysts close to the project.
BHP will market all the mine’s production, says a company executive. He explains that no firm marketing decision has been made, though he does say that sales arrangements will “probably be implemented in several stages as the mine comes into production.”
De Beers’ official response is that talks are continuing. However, diamond industry analysts say that the Australian mining giant will market half or more of its Canadian diamonds through the CSO. They add that U.S. anti-trust laws probably will prevent the CSO from taking all of the goods.
EQUIPMENT MAY SOLVE TREATMENT MYSTERIES
Got a quarter million dollars to spend on gem testing equipment? Didn’t think so.
But GIA Carlsbad did just that. The latest addition to its research arsenal is the Raman Laser Microspectrometer. John Koivula, GIA’s chief gemologist and inclusion expert, says this computer-operated laser eventually will be able to determine not only the identity of a gem material itself, but the identity of important inclusions as well. These should determine within minutes whether the gem is natural or synthetic, impregnated or fracture filled, with no damage to the gem or its mounting.
Is it opticon with hardener, or is it oil? No problem. Is it heat-treated Mong Hsu natural ruby, or is that flux in a synthetic? The Raman Laser will tell you in just two and a half minutes.
The folks in GIA’s Research and Gem Identification Department are having an interesting time with it because it takes some special training to use. You or I would not be able to just sit down and “zap” the first emerald that came into the store. It also takes time to load the computer’s database. It needs information on materials we know, so it can compare that to the gemstone being tested.
This means that the machine and the gemologists are not quite ready yet to conquer the unknown, but they are testing themselves and the machine.
The lab is using two diamonds with fairly obvious and interesting inclusions to practice with the Raman Laser. Here’s how it works. You place the gem to view through a microscope like the type you used in biology class – not the one on your jewelry counter. Focus the cross-hairs seen through the oculars on the inclusion. If it is sizable, 5X magnification will do, making it easy to focus. You’ll need higher magnification – 20X or the maximum 50X – for smaller inclusions. Unfortunately, it’s harder to locate and focus exactly on an inclusion under higher magnification. Once in focus, the laser strikes the inclusion, sending back data of its physical structure and chemical make-up. In GIA’s two diamonds, one inclusion, a bright green crystal, was found to be chrome diopside and the other pyrope garnet. Neither find was startling, but made for good practice.
While not yet ready to perform routine testing, the lab tried its new toy on a very dark red, opaque cabochon with an over-the-limits refractive index spot reading. Though there was no normal way to view inclusions, it was an easy ID for the laser: almandite garnet. – Gary Roskin
BIRTHSTONE REPORT: GARNET, THE JANUARY GEM
It may seem rather basic, but stocking and knowing about birthstones is vital to colored stone sales. So over the next 12 issues, we’ll devote a few columns to each month’s gem, emphasizing traditional sales tips, as well as current trends and availability.
You say you hate your birthstone? You’re not alone. Although I was born in March, aquamarine just isn’t my style, nor is bloodstone a must-have gem for me. Indeed, unless you were born in April (diamond), May (emerald), July (ruby) or September (sapphire), you – like many of your customers – probably wish you could choose another birthstone.
Perhaps you can, because there are many ways to get around the standard set of stones. There are birthstones of the Zodiac and for the days of the week.
And while garnet is the birthstone for those born in January, their astrological sign will be either Capricorn (Jan. 1-20) or Aquarius (Jan. 21-31). Capricorn’s stone still is garnet, but the birthstone for Aquarians is ruby. Even Capricorns who hate garnet because they think it means their grandmother’s old “carbuncle” are in for a pleasant surprise.
Almandite (or “Almandine,” for the purest) is that purplish-red variety so many customers dislike. But garnets come in a wide range of varieties and colors. And even almandite itself now comes in fashionable bullet or tongue shapes, used as accents on stylish bracelets, necklaces and earrings.
It’s up to you to give that old carbuncle some company in your display case and start promoting the “new” colors of January.
THE GARNET RAINBOW
Garnet’s different species give you a choice in almost any color. In greens there are the fiery demantoid and beautiful tsavorite. Then there are ruby red pyropes, orange hessonites, golden grossulars, raspberry, strawberry, plum and grape rhodolites and even change-of-color garnets. Surely your customer can find a suitable birthstone alternative in one of these.
Green (tsavorite and demantoid)
Tsavorite, one of the more beautiful garnets, is a transparent grossular garnet. A very bright and saturated green, the finer qualities can rival some top emeralds. The greens do vary slightly – from a pure hue to those accented by yellow and even, rarely, blue.
Discovered only 25 years ago, tsavorite is named for its original source, Tsavo National Park and Game Preserve in Southeast Kenya, which still produces the finest qualities. Tsavorite is found only in Kenya and Tanzania (East Africa). Colors are very saturated and pure. Clarities range the full spectrum, since tsavorites can form with few or no visible inclusions at 10X (“Flawless”).
Tsavorite forms under great pressure in nodules resembling a medium-sized potato. When removed from the ground, these “potatoes” typically crumble. The size of the pieces that result dictates how large a gem you can fashion. It is possible to find 5- to 10-ct. faceted stones, but anything larger is close to unobtainable. Most tsavorites range up to only a few carats.
The other green garnet, demantoid, was popular in the early 1900s. This rare gem from Russia has a high refractive index and high dispersion that make it very lustrous and fiery. While the most sought after tsavorite color is a saturated pure green, demantoid shows off its rare dispersion when body color is a medium, slightly yellowish-green. There are reports of new demantoid finds in Namibia and Russia; the Russian material may rival some of the original Ural deposits. This could enhance the already popular estate jewelry market.
A relatively new discovery of chrome pyropes in the southwestern U.S. could single-handedly rescue the idea of a red birthstone for January. These bright red garnets had never been seen in such a saturated color before; it results from an extremely high chromium content. Unfortunately, they do not come in very large sizes; 6.5mm rounds are some of the largest for commercial sale.
Purple (rhodolite and almandite)
This fruit bowl of garnets offers raspberry, strawberry, plum and grape colors. Rhodolites, one of the more popular garnets of late, are found in East Africa, Pakistan, India and Sri Lanka. They can vary from a pure hue (Concord grape) to those accented by red or even pink (raspberry). The name, originally applied to stones from North Carolina, apparently derives from the local rhododendron.
Rhodolite actually is a combination of two garnets, almandite and pyrope; the color, not its chemistry, supplies the name. Not all purple garnets are rhodolites, however, so you need to go beyond color to make identifications in this family. Refractive index, spectrum and plain old magnification (to view inclusions) are usually enough to begin to identify a piece.
Orange (hessonite and spessartite)
Looking for a different color? How about orange? Garnet gives you two choices: hessonite, a yellowish orange grossular (same species as tsavorite) and spessartite, a fiery reddish orange garnet (its own species). Hessonites are somewhat unusual because graining may make them appear slightly turbulent inside. Hessonites have a lower R.I. than spessartites and are relatively inexpensive.
More fruity stones include “Mandarin orange” spessartites (or spessartines) from Namibia and “kashmirines” from India and the Pakistani border (a take-off of the incredible Kashmir sapphires). A more muted orange distinguishes “malaya” garnets, which are a combination of almandite, pyrope and spessartite. The term malaya, meaning “out of the family,” is appropriate since it doesn’t fall within one of the proper garnet species.
Mali, a small internal African country, has an enormous find of garnets as well as other gems. One of the more noteworthy is grossular-andradite in yellowish-green and reddish-brown colors. This recent discovery will appeal to customers seeking the rare or unconventional.
Change of color garnets show a different color when viewed under incandescent or fluorescent light. There may be no particular standard colors for these garnets, which are fairly rare. You’ll want to show customers stones with an obvious change in which each color is attractive.
Round brilliants and cushion cuts are fine for the more classic styles of jewelry. However, more modern cutting styles can enhance color or highlight the natural beauty of rough.
Concave faceting, a relatively new concept, is one way to release more brilliance and color from a gem. In theory, a concave facet, which curves inwards, eliminates the “window” (see-through) effect of a flat surface. Reducing the window allows more light to bounce around within the gem, picking up more color as it travels.
Natural surface gems – which are partly polished or faceted, leaving portions of the natural rough crystal – are the latest way to highlight the beauty of mother nature’s work. Drusy garnets offer a very fresh way to wear your birthstone. Pronounced “droozy,” these geode-like specimens show waves of tiny crystals on somewhat flat, irregularly shaped matrix.
Availability & Prices
It is relatively easy to own your inventory of garnets, as most are readily available and modestly priced. Many fine jewelry designers use the more intense colors for their finished pieces, since garnets are much more affordable than the emerald, ruby, sapphire trio. Expect to pay the most for tsavorite and demantoids.
Sticking with the more commercially available quality and size ranges of fine 1- to 2-ct. gems, we find the following per-carat prices:
All transparent grossulars except tsavorite will command $35-$45. Translucent material is generally less expensive than the transparent. Fine quality tsavorites are $600-$900, with exceptional stones a lot more.
The stereotypical brownish-red pyrope is $8-$12. Current availability puts prices for the beautiful chrome pyropes at $400-$600.
Almandites also are $8-$12, with the grape material from India at $30-$40.
Spessarites are $8-$12, too, except those from the “little three mine,” the “hercules mine” and the new find of kashmirines. These are $125-$175.
Demantoids (when you can find them in fine quality) are listed in The Guide at $700-$2,000, and the new Russian gems at $2,000-$6,000.
Rhodolites of fine color are $20-$30, with malayas at $70-$100. The new yellow-green Mali garnets are $400-$700, with the higher prices for Ceylon stones with an almost alexandrite-like color change.
(Note: Prices were provided by Richard Drucker at The Guide, Charles Vargas at Apache Gem Co., Eric Braunwart at Columbia Gem House and Josh Hall at Pala International.)
Garnets don’t need too much care and attention at the bench. There are no treatments to worry about as yet. Garnets are not heat treated, fracture filled or irradiated. Of course, like any gem, they should be protected from the heat of manufacture and repair, but no special attention is necessary.
The hardness of garnet is 7-71/2; its toughness is fair to good. Hardness is the ability to withstand scratching. Diamond is the hardest at 10 on the Mohs scale; only another diamond can scratch it. Toughness is the ability to withstand a blow. Diamonds aren’t the toughest gemstone. If you hit a diamond in the right (or wrong) direction, it may well chip, fracture or even split.
Where does garnet fit into this scheme? Garnets will be scratched if abused and can chip or break if struck hard enough. They are definitely less durable than rubies and sapphires, but somewhat tougher than emeralds. Dust (which is rated approximately 7 in hardness) can scratch the gem’s surface and ruin the polish. Always use a liquid to wash away dust before wiping with a gem cloth.
Garnets, like tourmalines and feldspars, are identified mineralogically as a “group.” Groups are comprised of a number of species. These species all form in the same crystal system and crystal habit. The chemistry of each species, while not exactly the same, does follow a simple formula.
As mentioned, it is difficult to positively identify garnet species because so many grow together – pyrope with almandite, almandite with spessartite, all three together, grossular with spessartite, grossular with andradite, etc. We can make assumptions, or broad identifications, which allow us as jewelers to make a species call, though it may be less than completely accurate, scientifically.
More importantly, however, we can tell that it is a garnet. And by studying its inclusions, we should be able to tell whether a gem is natural or laboratory produced.
There are a number of lab-grown garnets, such as YAG (Yttrium Aluminum), GGG (Gadolinium Gallium) and a host of other combinations, but none can even remotely be confused with a natural gem.
Garnet species and varieties are:
Rhodolites – Almandite pyrope
Malaya – “Pyralspites” pyrope, almandite, spessartite
Mali – Andradite grossularite
Garnets form in the cubic system, the most symmetrical, creating a singly refractive gem (one RI reading). Its crystal habit, the shapes in which it commonly occurs, are dodecahedral (12-sided rhomboid), trapezahedral (24 sided) and combinations of the two.
The chemical formula for garnets is written 3A0 B2O3 3(SiO2), where the A and B are either one or a number of the following metallic elements:
A = magnesium, manganese, iron and/or vanadium.
B = iron, chromium and/or vanadium.
Five of the better-known garnet species for jewelry include:
Grossularites – an iron aluminum plus calcium silicate.
Pyropes – a magnesium aluminum plus chromium silicate.
Almandites – an iron aluminum silicate.
Spessartites – a manganese aluminum silicate.
Andradites – a calcium iron silicate with chromium.
(Other species and varieties exist, but are not commercially available in large enough quantities to make them relevant for the retail jeweler.)
Because of their different formulae, each garnet species will have different gemological properties.
Refractive index is the strength of bending light as it passes into and out of a gem.
Tsavorite is typically in the lower range, around 1.735.
Hessonite is typically higher: 1.75.
Translucent (usually jade substitutes): 1.70-1.73 (1.72 spot reading on cabochons).
Pyropes (ruby reds from northern Arizona): 1.74-1.75.
Almandites (grape almandites): 1.76-1.83, over the limits (OTL) of the standard refractometer.
Spessartites (kashmirines and mandarines): 1.80-1.82 (OTL).
Andradites (demantoids from Russia and Namibia): 1.885 (OTL) .
Unlike other garnets, demantoids show visible dispersion, the splitting of white light into spectral colors. The greater the split, the more visible the individual colors. Measuring the RI difference between the blue and red wavelengths (opposite ends of the rainbow spectrum) gives you a dispersion measurement. Demantoid’s dispersion, more obvious than diamond’s, measures 0.057, while diamond is 0.044.
Spectrum is the absorption of certain wavelengths.
Pyrope: colored by chromium, shows absorption lines in the red end of the spectrum.
Almandites: iron, shows absorption lines and bands in the green and yellow end of the spectrum.
Andradite: a strong absorption band in the blue caused by iron and/or chromium.
Inclusions: Very thin needles are commonly seen in tsavorites. Hessonites usually show swirled graining and rounded “bubble-like” crystals
Pyropes have intersecting short needles
Almandites have intersecting short needles
Spessartites, with their pegmatite origins, usually have two-phase and feather-like inclusions (liquid and gas).
Demantoids usually show flowing golden fibers. – Gary Roskin