Ruby : Why the Source Affects the Price

Ruby enjoys a storied history extending back to the earliest recorded times. From the Bible we learn that wisdom was considered “more precious than rubies.” A Sanskrit text refers to ruby as the “king of precious stones.” Other ancient writings attest to this gem’s special powers. It was believed to banish evil thoughts, engender peace of mind, and protect the wearer from harm. During the Roman empire, ruby was ground up and ingested for its medicinal value. Medical texts from 13th-century India promote it as a cure for digestive disorders. Burmese soldiers were known to insert ruby beneath their skin for protection during battle.

If its purported powers are now the stuff of apocryphal folklore, ruby today is still cherished for its beauty and rarity. A key factor affecting ruby’s value is the country of origin and in some instances the specific region from which the stone derives.

Burmese ruby: Mogok vs. Mong Hsu. The most famous source for ruby is Burma (now called Myanmar). The mining tract in the Mogok region historically has been the source for the world’s finest ruby. Mogok ruby is a pure red that holds its color under all lighting conditions. The supply of classic Mogok ruby is scarce, which is why these prized gems bring top dollar in auctions.

More recently, the Mong Hsu region of Myanmar has yielded a large quantity of ruby. These gems are typically treated at extremely high temperatures to attain their fine color. This has sparked a controversy in the industry not only regarding treatment but also over whether rubies from Mong Hsu should be distinguished from others of Burmese origin.

There is a difference. Yet there’s no consensus in the trade on how to address this difference. When a Mong Hsu ruby is heated, most commonly it’s protected with borax, which melts and becomes a glass that fills tiny surface fissures. There’s a debate over whether this is an intentional filler that should be disclosed or merely an innocent by-product. Adding confusion to the debate, the borax can also act as a flux, allowing the healing of fractures. Whether treated or healed, these rubies from Mong Hsu are at the center of the disagreement.

“Currently there is a lot of focus on residue or so-called glass-filling in Mong Hsu,” says Robert Kane, former director of the Gübelin Gemmological Laboratory in Lucerne, Switzerland. “But the trade should recognize that today many heated rubies that contain fissures will also contain residue. This includes material from Mogok. In addition to heat treatment, the presence and quantity of residue is noted on reports from the Gübelin Gem Lab.”

Does the distinction between Mogok and Mong Hsu matter? C.R. “Cap” Beesley, president of American Gemological Laboratories (AGL) in New York, thinks it does. “When separations like Mogok vs. Mong Hsu can be made, they should be made. There is a clear difference between the Mong Hsu and Mogok materials. To lump both together as Burmese will only demean the integrity of the origin call.”

Others agree. “If I think a ruby is Burmese, I’m not going to offer it before we have a cert prepared,” says William Milne, former director of fine jewelry at Butterfield, Butterfield, & Dunnings in Elgin, Ill. “When I say Burmese, I mean the classical Mogok material and not the new Mong Hsu. A cert stating classical Burma can more than double the value of a beautiful ruby.”

But the issue is more complex than just Mong Hsu vs. Mogok, says Kane. “Although distinguishing the Mong Hsu material is generally not difficult, the real problem is that there are many other sources in Burma for ruby. Burma has been known to produce ruby from many different areas, including Mogok, Mong Hsu, Momeik, Nanyaseik, Sagyin Hills, Pyinlon, and Namhsa. The Mogok stone tract alone comprises more than 100 mines.”

Other countries that produce ruby – such as East Africa, Sri Lanka, and Vietnam – likewise have distinct areas where gems were formed by separate geological events. Further complicating matters, a gem deposit may extend from one country into the next and produce gemstones identical in nature. That’s the case, for example, with rubies from Thailand and Cambodia.

Some dealers, believing that the Burma designation sends a false message of quality and rarity, are cautious about using these reports. They point out that the Mong Hsu material is not saleable before treatment or even after normal heat treatment. Only after extreme heating does the material transform to a bright-red, classic Burma look-alike.

Selling the origin. There are two basic categories of ruby: Burmese and those from all other countries. The others are lumped together because their locations do not affect price. The overall quality of a non-Burmese ruby dictates its price regardless of its origin. While laboratories occasionally get requests for origin reports on rubies from Thailand, Vietnam, and elsewhere, the reports are intended primarily to distinguish genuine from synthetic stones rather than to discern their origin. Says Milne, “A beautiful ruby from Thailand will sell without a cert. But if a ruby is from Burma and they are selling it without a cert, everyone wants to know what’s wrong with it.”

Without a cert, a Burmese ruby is just another ruby. While some may risk their investments in hopes of future financial gain, most are unwilling to take that risk. That’s why any Burma ruby of importance will have paperwork to certify its origin.

Origin matters. At the 1998 Tucson gem shows, dealers offered several rubies of importance for sale. A beautiful 2.05-ct. oval-shaped ruby with a top red color of unknown origin carried an asking price of $3,500 per carat. A 2.21-ct. untreated pear-shaped Burmese was priced at $7,500 per carat. Another high-rated ruby of unknown origin was a 4.16-ct. pear shape at $6,000 per carat. However, a 3.11-ct. cushion Burmese was $11,500 per carat and a 4.09-ct. cushion Burmese was $15,800 per carat. The Burmese and non-Burmese rubies for sale in Tucson were all upper-end gems, but the former commanded much higher prices.

It stands to reason that an inferior-quality gemstone may fetch a higher price if it’s lucky enough to come from the right country. That raises the question of whether it’s the quality or the origin that sells. Beesley adds a qualifying statement to his report if he feels the quality is not representative of the area. But some dealers question whether this goes beyond the scope of an origin report. Some are interested only in establishing the source of the material and leave it to their clients to determine the value.

“Certain gem localities, by reputation, enjoy an elevated status,” says Kane. “However, gemstone buyers should not forget that many gem deposits produce a full range of qualities, from excellent to poor. This includes Mogok. Just because a gemstone is from a famous and revered locality, it does not guarantee superior quality. Regardless of the country of origin, important quality factors such as color, clarity, cut, and the presence or absence of enhancement must also be considered. After studying a laboratory report, don’t forget to hold the gem and ask yourself if it’s beautiful.”

“Origin reports are a matter of importance to today’s clientele,” says Josh Hall, vice president of Pala International, Fallbrook, Calif. “[In rubies] approaching extra-fine quality, country of origin is critical. You will not sell finer-quality rubies of significant size today without an origin report.”

When the Mong Hsu rubies started to appear, most speculated that the price of rubies, in particular the classic Burmese, would drop. While Mong Hsu rubies and those from other countries did come down in price, the reason had more to do with treatment than with origin. The large supply of Mong Hsu rubies combined with the treatment controversy precipitated a price reduction not unlike the way Opticon created a decline in the emerald market. On the other hand, classic untreated Burmese ruby is all the more desirable now, and so its price has remained unaffected (and may even be on the rise).

The market surely responds to origin reports. That impact is felt most strongly among auction houses, which rely on these reports for gems of importance. The issue of treatment along with the origin question has forced the auction houses to depend on these reports more than ever.

“When we take in an important gem for auction, we always send it in for papers,” says auctioneer Joseph DuMouchelle of DuMouchelle Fine and Estate Jewellers in Plymouth, Mich. “We think it is special, and we like to tell people it’s special and why. Even if I am confident of what something might be, it’s like going out and getting a second opinion.”

Accuracy of origin. Here is where the controversy heightens. If a ruby is determined to be from Burma, the price escalates. But what if the laboratory is wrong? There is always a slim margin of error when it comes to origin. The key to determining the country of origin is still visual observation of key characteristics such as the inclusion trace element study.

The Gemological Institute of America’s Gem Trade Laboratory does not determine country of origin, but GIA officials haven’t ruled out doing so in the future. Given their massive database, they could conceivably enter this arena. For now, they realize that origin determinations are not always conclusive and feel that further research is necessary.

Beesley says it comes down to a laboratory’s level of confidence. “We will only issue a country-of-origin statement as part of a colored stone report when we are completely confident the representation is true,” he says. AGL does so in about 80% of cases.

Not all laboratories distinguish Mong Hsu from other Burmese locations. The effort to determine individual mine locations within the same country may be futile. Says Hall, “It will get to a point where it will be guesswork, and then the reports will be so iffy that the effect will be gone.”

Beyond Burma. There are many sources of ruby, but two recent discoveries are noteworthy because of the origin issue. In the 1980s a goat herder discovered ruby in the mountains of Nepal. The clarity of Nepalese ruby is usually low to mid-commercial, and occasionally a fine crystal turns up. Crystals range in size up to about 5 cts. The color is pure red to pinkish-purplish red and often strongly color-zoned. Even so, the initial excitement quickly subsided when people realized that Nepal’s harsh elements would discourage commercial development.

Vietnam had significant discoveries in 1983 north of Hanoi and in 1987 in Luc Yen. Between November 1989 and March 1990, the Vietnamese mined more than 3 million carats of ruby and pink sapphire, all from one deposit. Word spread quickly in the trade that the color of the finest material was comparable with that of Burmese. However, unlike the Mogok material, the clarity of Vietnamese ruby is mostly lower, with few eye-clean gems.

Richard B. Drucker is the president of Gemworld International and publisher of The Guide, a pricing periodical he began in 1982. He is an international gemstone consultant and has published numerous books on the jewelry industry.

The Labs:

The following laboratories currently perform country-of-origin determinations:

•American Gemological Laboratory 580 Fifth Ave., Suite 1211 New York, NY 10036 (212) 704-0727

•American Gem Trade Association Laboratory 18 E. 48th St., Suite 1002 New York, NY 10017 (212) 752-1717

•Gübelin Gemmological Laboratory Maihofstrasse 102 Ch-6000 Lucerne 9 Switzerland (41 41) 429-1717

•SSEF Swiss Gemmological Institute Falknerstrasse-9 Ch-4001 Basel Switzerland (41 61) 262-0640

•The Gemological Institute of America’s Gem Trade Laboratory offers laboratory reports that confirm whether a stone is natural or synthetic. The GIA laboratory currently does not determine country of origin.

•GIA Gem Trade Laboratory The Robert Mouawad Campus 5355 Armada Dr. Carlsbad, CA 92008 (760) 603-4500