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Emeralds

Few gems can outshine the awe inspiring beauty of a quality emerald.  Having been the favorite gem of ancient cultures Emeralds have dominated in history and are now realizing an incredible rise in value and rarity for top grade stones.

An interesting industry fact is that Emeralds are far rarer than diamonds in nature resulting from the unique conditions of their formation.  This is reflected in their value where top emeralds are far more valuable than diamonds as a cost per Carat.

Emeralds offer an excellent investment opportunity for anyone who is looking for hard assets with international value. Prices per carat have been rising steadily over the past few years, due to the gigantic emerald hype amongst celebrities. In addition the "good luck" colour associated with the emerald make demand of this precious gem by Asian cultures very strong, with demand of high quality stones far exceeding supply.

In a recent article in the Chicago Tribune, Christopher Ducet, a renouned Jewelry designer, was quoted: " An emerald is rarer than a diamond by far, and large emeralds are very expensive and exceed the costs of diamonds"

A November, 2012 article from BLOOMBERG BUSINESS aptly states:  " High-quality emerald prices increased more than 10-fold in the past three years, out pacing a 21% gain in diamonds, according to calculations based on Gemfields and WWW International Diamond Consultants data."

So what is happening to the emerald market to attribute the rise in prices ?  As a summary consider the following:

  • Increased demand for quality Stones especially in Asian Markets (green denotes luck and good fortune)

  • Decreased supply

  • Method of mining, as readily available deposits become exhausted, miners are forced to dig deeper using more expensive mining methods as well as extensive blasting which destroys much of the quality crystal and results in smaller emerald sizes.

  • Lower production volumes globally attributed to political instability (partly due to the death by cancer of the self proclaimed  Columbian "Emerald Tzar" Victor Caranza)

  • Increased exposure through Hollywood stars preference for the stone.

Bogota may 2015 emerald prices continue to rise

Prices for wholesale Colombian emeralds have continued increasing into 2015, showing no signs of slowing anytime soon. Analysts were predicting a 30% rise however market sources put this figure closer to 60%.

In a recent interview, Bogota broker Orlando Beltran said ‘I’ve been in this business 35 years and I’ve never seen anything like it, it’s as if when the old man died so did the stones and prices just keep rising’ making reference to the death of emerald tzar Victor Carranza in 2013.

 

PRODUCTION

Formerly the world’s biggest producer of the green gemstones, Colombia has slipped behind Zambia and Brazil in recent years as its aging mines lack investment in new machinery, according to Oscar Baquero, the head of the country’s emerald federation ‘Fedesmeraldas’.

Open pit mining is forbidden, and the only ongoing exploitation is in tunnels and shafts mined by dynamite and electric hammer, a process which has changed little over the last 60 years.

Colombia’s total emerald output in 2014 was 2 million carats, a decline of -25% from 2013

EXPORTS

According to Fedesmeraldas, emerald exports in the first quarter 2015 have plunged, falling 15% in January and an incredible 26.8% in February. This is due to the production issues mentioned above but largely because of new government legislation which seeks to record every step of an emerald’s journey beginning with the mine of origin and the individuals supplying the stones through to the cutting and polishing.

The aim of this exercise is to provide the government with greater transparency and of course additional tax revenue, every individual or company in the chain must demonstrate that taxes have been paid in order for stones to leave the country. As a result export costs have doubled.

Fine and extra fine quality stones are so rare that pieces in excess of $50,000 -$100,000 per carat are not uncommon.

RARITY

The value of emeralds stems, in part, from their scarcity: they are over 20 times rarer than diamonds, a consequence of the extraordinary conditions required to create them. Fine and extra fine quality stones are so rare that prices in excess of $50,000 -$100,000 per carat are not uncommon.

RECORD AUCTION RESULTS

Bonhams London first fine jewellery sale of 2015, held on April 22, 2015, clearly demonstrated an increase in demand for coloured gemstones with fierce bidding taking place in the saleroom, on the telephone and online, from buyers across the globe.The auction house had tracked a significant increase in the price-per-carat achieved for coloured gemstones in its auctions over the last decade, culminating in the dramatic sale prices achieved by colored gemstone lots at its London first fine jewelry sale for this year, some lots selling for as high as 7 times the pre-sale estimate. The auction house believes the trend will continue during the year 2015, and has proclaimed 2015 as the year of the coloured gemstone.


  Bloomburg Business Article - Exert April 2015:  " For colored stones, prices often increase with supply as jewelers acquire enough stock to justify marketing the gems to customers. Take regular emeralds: their value has appreciated 1,000 percent in five years as Harebottle’s Gemfields Plc and peers expanded mines, while marketing campaigns fronted by Hollywood star Mila Kunis gave demand a boost."

 

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