The ICA World Gemstone Mining Update/Part 2

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Brazil

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by Marcelo Bernardes

Brazil is a rich source of gemstones which, as the fourth largest country in the world, we believe has only been scratched on the surface when it comes to gemstone mining. This report on the current availability of gemstones from Brazil has been compiled from interviews with mine owners, rough gem dealers and personal notes.

Brazil is now the world's largest emerald producer. Nova Era is currently the major emerald producing mine with many neighboring areas currently being prospected. The production at Nova Era has reached 200 kilos a month of facetable rough, 10 percent of which is medium to superior quality. The siz is up to 100 grams. Future prospects are good and the overall stockpile is reasonable. Santa Terezinha is producing very little emerald, only a few kilos a month, with some emerald-bearing seams being worked 500 to 600 meters below the surface. Belmonte mine in Itabira has invested in survey campaigns to try to locate new seams but the current production is very low.

Bahia has become the second major supplier with the reactivation of the Carna Iba mine. Emerald prices are accessible but firm. Turning to rubellite, the Cruzeiro mine is back in production after one year of reorganization. However, the new output has not been as regular as before, but it is improving. The old stockpile is being used to compensate for the decrease in production.

Production of green tourmaline from various mines in Governador Valadares is low, but future prospects are reasonable. The attempt to mechanize production at the Para Iba tourmaline was unsucessful. The very narrow pegmatite-bearing seam is now being worked again in the traditional pick and shovel way. Results are not at all exciting but the mine is producing a few grams per month of new material. Prices continue to be high and growing stronger for semi-clean to eye-clean stones.

The Morro Redondo mine produced so much pink and bicolor tourmaline that we believe it will be around for a while. Prices are now holding well because the cutting and marketing has been channeled through a few solid companies. Production of aquamarine has declined continually for three years and has been very low in 1995. Production is low at Marambainha, Duas Barras, Calvalo Morto and Ipe.

Future prospects are reasonable at Ipe, which produces medium to low quality, but poor at the other mines. The material currently on the market is from old stock, which is becoming low.

Production of chrysoberyl cat's-eye at Teofilo Otoni and alexandrite at Novo Cruzeiro is low and stocks are also low. There is reasonable production of precious topaz from the Capao, Vermelhao and Dom Bosco mines. There is about 10 kilos per month of rough, from low to good quality in sizes up to 100 grams. Future prospects and available stockpiles are reasonable. Production of white topaz from Marambaia is low, only 100 kilos a month of rough, and prospects are poor.

Production of amethyst at Maraba in the state of Para is about 200 kilos per month of hammered material. The size ranges from 0.5 to 2.0 grams. Production is much better at Rio Grande do Sul in Uruguay, which is producing 400 kilos per month in sizes up to 10 grams which are marketed through Brazil. Prospects are reasonable and the stocks are good.

There is also reasonable supply of amethyst and ametrine from Santa Cruz in Bolivia which is marketed through Brazil, 200 kilos a month of amethyst and 150 kilos a month of ametrine. Supply of citrine is high from Rio Grande do Sul, particularly from the Serramine, which is producing 300 kilos a month of hammered goods. The Irai mine produces an additional 100 kilos a month of hammered goods.The overall mining outlook is not very good at the present time. Most of the major mines are getting too deep to be worked safely at a bearable cost.

The world recession in the jewelry industry has discouraged investment in new mining sites. Whenever the market finally heats up, there could be severe shortages of some goods.

Sri Lanka

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by Mohamed S.M. Fazli

Sri Lanka produces some of the finest quality gemstones in the world, including blue sapphires, star rubies, chrysoberyl cat's eyes, padparadschas, zircons, amethysts, moonstones, garnets, spinels, and many, many more. With the demand for coloured gemstones increasing by leaps and bounds, production has increased, and the industry in Sri Lanka has been very buoyant.

There are, however, some mining problems, including environmental problems which have resulted in restrictions in the use of dredges, government restrictions in the alluvial mining areas of the paddy fields, and an unusual change in the weather pattern, which has brought record rains. Nevertheless there was no halt to production in Sri Lanka.

Recently a few new mining areas were discovered, according to the National Gem & Jewellery Authority. One is within Colombo city limits, about five miles from the coast in a place called Koswatta in Rajagiriya. The other is only 20 miles outside Colombo in a place called Gampaha. At these two mines, a characteristic alluvial mixture of many kinds of coloured gemstones has been found. Material from the new mines includes many colors of sapphire, chrysoberyl, garnet, and zircon.

Tanzania

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by Abe K. Suleman and Damian Kigaila

There has been an important new alluvial gemstone deposit discovered in Tanzania in Tunduru, which is a remote area in the south east. Now it is well known for the production of about eleven different types of gemstones which include chrysoberyl, sapphire, tourmaline, alexandrite, spinel and other important minerals like diamond.

Already a big number of illegal miners, dealers and big companies are flocking in the place. The biggest problem facing the area and that community as a whole, is the apportionment of land with mineral potential. The Ministry of Water, Energyand Minerals has already authorized about nine prospecting licenses. At present there are about five to ten thousand men and women either doing illegal mining or buying gemstones in the area, and the flow of people into the area is still going on. Therefore it may be very difficult in the future to evacuate these individuals to allow large scale mining.

This is the second major new mining area recently found in Tanzania, following the discovery of sapphires and other gemstones at Songea, in southern Tanzania. The number of small scale miners in Songea has been increasing rapidly and has now reached 10,000 people. In contrast production of ruby and sapphire from established mines hasdecreased. Most of ruby and sapphire mines in Tanzania are owned by big companies.

The ruby production in Longido is dwindling mostly due to lack of supplies of basic mining consumables. Since the reopening of the mine in August 1994 there has been slow production growth. Other ruby and sapphire mines in Tanga and Morogoro are closing down. Owners are now rushing to the southern part the country for the new discoveries in Songea and Tunduru. Some methods of mining by some companies especially in Morogoro have led to the total destruction of land and mineral reserves. Currently it is difficult to reclaim the land and to invent another mining method.

Also the dwindling of ruby and sapphire is discouraging miners to operate in small scale mining. Production of all gemstones in Tanzania is expected to increase during the dry season.

Thailand

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by Santpal Singh Chawl

In 1982, Thailand's exports were less than US$200 million dollars in gems and jewellery. Last year, exports totaled US$1.8 billion dollars,nine times the value of 12 year ago. And the market remains healthy. Last year's sales grew almost 10% compared to 1993.

The gemstone industry in Thailand is changing due to pressures and demands from world markets. The ruby market has traditionally been Thailand's mainstay. We are the largest exporter in the world. Prices rose dramatically from 1985-1991 due to high demand and low supply. Borai in Chanthaburi province and the Pailin area of nearby Cambodia produced 70 to 75 percent of the world supply of rubies from 1963 to 1993.

The opening of a single major new mine-Mong Hsu in Northern Burma in 1992-made a dramatic impact on what was a comparatively stable market. Today the ruby market is saturated. Prices have fallen-and demand is threatening to fall as well, because over availability of some qualities and sizes have reduced the distinctiveness of this stone in the marketplace. Traditionally the ruby has been a high-concept stone, a stone with a special feeling or mystique. It was seen as having a rarity and was difficult to find. But the new availability reduced both prices and profitability formany suppliers.

Thailand's ruby exports have been steady at some US$200 million dollars annually for the past five years. At least another US$75 million dollars are sold to local jewelry manufacturers producing mainly for export. I do agree with other Thai producers who feel strongly that the ruby market has considerable scope for expansion with improved promotion for market awareness and development.

The sapphire market is quite different from that of rubies. More than 50 percent of Thailand's supplies come from abroad-especially from Sri Lanka, Australia, and many parts of Africa. The market is strong because of the continued impact of long-term promotion in Thailand and abroad, especially through the Thai Government's Department of Export Promotion. Thailand's supplies of locally-mined sapphires in Kanchanaburi and Cambodian stones from Pailin are limited and falling in quantity. A promising African mine in Madagascar has yet to produce significant quantities but we hope this will become an important future source of supply.

Perhaps most unexpected-surprising even-is an important new market for sapphire. Growing quantities of calibrated Sri Lankan and other sapphiresare now direct marketed on television as standardized mass-produced jewellery. Direct Response Television was developed in the United States where growing numbers of shoppers use thier telephones to bypass traditional retail outlets. Customers reaching out for telephones to buy a simple ring in Los Angeles, New York or Chicago are part of a trend-an American trend that is spreading to Singapore, Hong Kong, (Tokyo?) and other Asian cities.

For some producers this trend will mean making larger quantities of less varied items, perhaps thousands of pieces in particular sizes. Emeralds are relatively new to the Thai market. Thai manufacturers and consumers are being educated about emerald, but cutters don't yet handle emeralds as well as rubies and sapphires. The market is dominated by Indian and other traders who have relocated from elsewhere in search of lower overheads and ready markets.

Now Thailand has become an excellent source of finished emeralds. Better quality stones, especially Colombians, are entering the market for sale to wealthy Thais - and to an expanding export market. Thailand has cut and processed stones such as tanzanite, amethyst,aquamarine, peridot, topaz, tourmaline and tsavorite only since the mid-1980's. When diversification began, lower costs in Thailand than in other centers allowed this part of the industry to grow dramatically.

Currently Thailand accounts for 12% of total world trade in colored stones with some US$465 million sold in this area alone. Despite some sluggishness in the market in recent years, Thai producers see an expanding market-both intelevision-oriented mass audienece marketing and in increasingly up-market sophisticated and costly designs.

Thailand is primarily known as an exporter, but it should be noted that Thailand is also the world's number two consumer of S Class Mercedes Benz automobiles-and the wealthy Thais buy large quantities of 24 karat gold and increasingly more valuable stones and jewellery creations. Thailand is also a growing market as well as an export center.

Reprinted with permission by ICA Gembureau, New York

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