GemNotes

JAPAN DIVERSIFIES TO COMPETE

Despite recent headlines about a “dying” Japanese pearl industry, cultivators and dealers are hopeful for the future.

Their optimism may seem misplaced. While South Sea pearl powerhouses Tahiti and Australia increasingly woo consumers to their expensive products, freshwater pearls from China threaten to take over the market for smaller sizes. Prices are high (up about 12% in the first six months of 1997 over the same period of ’96) with quality goods scarce. And just when cultivators felt they had perfected the culturing process with state-of-the-art technology and research, they faced sudden, mysterious oyster mortalities and some really bad press.

Yet the Japanese are ready to bounce back by regaining their competitive edge. “The fact that different countries now produce pearls is an irreversible trend,” says Izumi Yamamoto, president of the Japan Pearl Exporters’ Association and chief executive officer of Yamakatsu Pearl Co. in Kobe, Japan. “We must take it in a constructive way. Consumers are always expecting something new and different.”

To meet that expectation, many Japanese wholesalers are adding or even switching entirely to South Sea pearls. These pearls accounted for 40% of Japanese pearl exports in dollar value last year. Going a step further, Tasaki Shinju Co. Ltd. of Kobe is experimenting with white and golden South Sea pearl cultures on Japan’s southern islands. This truly Japanese product so far makes up only a small percentage of the company’s total South Sea pearl inventory.

Dealing in larger pearls is a smart business move for Japanese companies, say wholesalers. “We’re seeing a reduction in quality in the akoya market, so that price and quality no longer match properly,” says Y. Shimizu. His Hosei Co. Ltd. of Kobe has specialized in South Sea pearls for 17 years. “The South Sea business is important for us,” says Shimizu, “because Japan has akoya pearl experience on its side. The Japanese have the right manpower, the know-how, access to a worldwide market and the ability to buy a huge amount of inventory to match fine quality necklaces.”

Despite the difficulties of a changing market, however, the Japanese aren’t ready to give up on their beloved local product. “We have to try to compete with countries that have lower wages and better exchange rates,” says Yamamoto. “Cultivators had better be thinking about how they can make good pearls and improve on processing, design and quality. They have to think about how to bring out the intrinsic value of jewelry.”

Indeed, the word “quality” is on everybody’s lips. Overproduction and poor quality tarnished the reputation of Japanese cultivators several years ago. Now fine quality is a priority, and many cultivators also are moving away from sizes below 6mm.

“The trend doesn’t necessarily mean larger sizes, but you need to consider the quality factor,” says Shunsaku Tasaki, president of Tasaki Shinju Co. “Small sizes are less profitable because they mean less weight and fewer momme [the Japanese unit of measurement for pearls, equal to 3.75 grams]. You have to have larger sizes if you expect dealers to pay more money.”

Oyster mortalities. The quest for quality also means keeping oysters happy and healthy so they produce the best nacre and roundest pearls – or any pearls, period. More than half of all nucleated oysters die before the nuclei become pearls; saving the other half is critical.

At the Mikimoto farm in Ago Bay, located in Japan’s Ise Prefecture, the sperm of healthy oysters are kept in liquid nitrogen and used to breed baby oysters in January each year. Millions of baby oysters live in large tanks and eat about a ton of plankton each day for three months. They join their nucleated older siblings in the bay at the end of April; there they grow for three years before they, too, are implanted with nuclei.

Plankton levels in the water are monitored daily: too much plankton signals a red tide, which can kill oysters within minutes once it strikes. When levels rise, oysters immediately are “evacuated” net by net to a different bay where plankton levels are safe. Researchers also monitor water temperature constantly and remove mollusks, which attach to pearl oysters to pilfer their food, in 10-day cycles. Technology even allows oysters to be monitored for stress. Despite this pampering, dozens of variables can and do affect the outcome of each year’s harvest.

Last summer, more than 148 million unnucleated oysters in Japan’s Ehime Prefecture died in droves. While shocking, the event was not unheard of. A thorough investigation is still underway, but rumors about the cause range from a virus carried by Chinese oysters smuggled into Japanese waters to overcrowding and even complicated theories about the weather.

While trying to learn of the cause of the disaster, the Japanese are beginning to acknowledge its effects. Total production volume at the end of the 1997 harvest totalled 10,690 kan (39.7 million grams), down 27% from 1996. Thousands of small pearl farms were forced out of business, and wholesalers also are feeling the impact.

“We’ve seen a 30% decrease in sales due to a lack of product,” says Shunsaku Tasaki of Tasaki Shinju. Wholesalers who attended the hama-age auctions reported lower overall quality and an extreme shortage of fine quality products.

Some cultivators are taking measures to prevent a recurrence. Thus, farmers of smaller-sized pearls in the Fuseda Area of Ago Bay are growing their own baby oysters so they won’t have to import oysters from Ehime Prefecture in the future. These oysters won’t be ready for implantation until April 1999, however.

RHODOCHROSITE: NAME OF THE ROSE

Much of the rhodochrosite seen on the market is used as an ornamental stone and fashioned into statuettes or bookends. Its banded rings of variegated rose-red and pink often are tinged with orange. Collectors look for the evenness of bands, their translucency, the juxtaposition of circles and the depth of color.

But more transparent varieties, while rarer, also are available. These are sought after for their relative degree of transparency, freedom from inclusions and depth of color. Some can compare with a fine “Padparadscha” sapphire for color.

Rhodochrosite, a manganese carbonate, owes its color to manganese, although gray, yellowish and brown colors also are found, according to Gems by Robert Webster, Fifth Edition. It is one of the few gems that is not treated or enhanced, except for cutting.

Legend has it that the Inca Viracocha discovered the material in the 13th century when the Incas were laying claim to what is now northern Argentina. Some ancient artifacts bearing rhodochrosite have been found in Inca graves. Indeed, it’s often called rosa del inca or rosinca, meaning “Inca rose,” in Argentina, where many of the ancient mines still are worked. It generally is considered the national gemstone.

The Capillita mine in the province of Catamarca is Argentina’s main source today. The gemstone also is mined commercially in Romania, India and South Africa. Colorado is the only quantity producer of the transparent variety, but Bryan Lees, owner of the Sweet Home Mine, says it produces only enough material to fashion about 100 cut stones per year.

“Mineral specimens for collectors are the main cash crop,” he says. Cut gems in the fine, 3- to 5-ct. range are wholesale priced from $100 per carat and up. Lees says the largest rhodochrosite found weighed 65 carats; it now resides in the Denver Museum of Natural History.

Banded rhodochrosite may be confused with rhodonite, another ornamental material. The latter, which also is colored by manganese, generally has black spots and veins; rhodochrosite does not. Rhodochrosite’s refractive index is 1.597-1.817; rhodonite’s is 1.733-1.747. The large birefringence in rhodochrosite is eye-visible in transparent stones, making them appear hazy and velvety.

Rhodochrosite is quite soft (3.5-4.5 on the Mohs Hardness Scale) and susceptible to scratching since it isn’t very tough. It is best worn as beaded necklaces or earrings as well as pendants and brooches. Experience is needed to cut and set rhodochrosite because it reacts to heat and some acids. Stones may be cleaned in warm soapy water, or with a toothbrush, and then dried with a soft, cotton cloth.

DIAMONDS VERIFIED AT ARCHANGEL SITE

Archangel Diamond Corporation, an international diamond exploration company, announced that independent accreditors have verified the presence of diamonds at Pipe 441 on its Verkhotina tenement in northwest Russia.

Societe Generale de Surveillance (SGS), a leading mineral testing firm, and independent consultant Steffen, Robertson and Kirsten (SRK) of the United Kingdom released reports verifying the presence of diamonds in a 20-metre drill sample from Hole 123. Representatives of SGS/SRK monitored drilling and processing of the sample from June 28 to July 5. Four diamonds totaling .28 ct. (equaling 1.3 carats per ton) were recovered at the Pomorye processing plant in their presence.

The SGS report states, “the kimberlite sample monitored originated from Pipe 441, and all diamonds observed originated from the same source.” In addition, SGS states, “the results of core sampling of the holes drilled prior to this accreditation process should be considered as reliable.” This is believed to be the first such accreditation undertaken in Russia.

Franco Boulle, chairman of Archangel Diamond, says, “the financial markets today are understandably skeptical of any announcement of a new discovery.” The company believes, however, that these reports “should remove any lingering doubts and bolster the veracity of the Pipe 441 discovery.”

Roy Spencer, Archangel’s chief geologist, reports that 28 holes of 112mm diameter have been drilled in and around the Pipe. Diamonds have been recovered from 14 of the 17 holes analyzed so far. Kimberlite also has been recovered from mini-bulk sample holes at locations #46 and #49. Based on material from these samples, the company expects to disclose some preliminary resource tonnages, grades and stone qualities by year end.

PEARL BOOK TO AID PRESERVATION

Golay Buchel Japan is offering a special English edition of Cultured Pearls, commemorating the 100th anniversary of the cultured pearl industry. Proceeds from the special edition will help maintain the Japanese cemetery in Broome, Western Australia. The cemetery holds the graves of hundreds of Japanese divers who died retrieving pearl oysters during the 19th and early 20th centuries.

The first 100 copies of the English edition – written and signed by Andrew Muller, head of Golay Buchel’s Japanese operations – are available for $300. Non-commemorative copies are $60. The lavishly illustrated book traces the history of pearling from ancient times through the first cultured pearl harvest in 1898 and the subsequent spread of the industry throughout the Pacific. It offers an in-depth look at each type of cultured pearl on the market today.

Muller, who collects historic works about pearls, says, “There is little published material on the cultured pearl, where it comes from and how and why it was developed.” His book is designed to fill that serious gap in an “educational yet interesting” manner.

Contact Golay Buchel Japan, P.O. Box 237, Kobe 651-01, Japan.

C3 READY TO SELL STOCK & MOISSANITE

C3 Inc., based in North Carolina, markets moissanite, a lab-grown silicon carbide and convincing diamond substitute. Its hardness, appearance (unmagnified) and thermal conductivity reportedly helped it fool some gemologists and conventional diamond testers in market studies. (See JCK, December 1996, p. 32.)

Now C3 says it will offer the first commercial supplies of moissanite in the first quarter of 1998. To obtain new financing, the company has filed a registration statement with the Securities and Exchange Commission to offer 2 million shares of common stock. (The underwriters would have the right to acquire an additional 300,000 shares to cover over-allotments.) Jeff Hunter, president of C3, expected shares to go on sale in November at $12-$15. The prospectus was available from the Syndicate Department, Paulson Investment Co. Inc., 811 S.W. Front, Suite 200, Portland, OR 97204.