World Of Gems Conference 2017 Proceedings Book

WORLD OF GEMS CONFERENCE V - 39 - SEPTEMBER 2017 F ew people engaged in the colored stone trade realize the market layers that the products they handle pass through before reaching the ultimate consumer. Unlike diamond, the colored stone supply chain is highly frag- mented. The typical colored stone is mined by small scale ar- tisan miners who cannot access the international market. As a result, their products will pass through no less than 10 sep- arate transactions before reaching the retail consumer. At each of these transactions the price of a gem is expected to be enhanced. After the initial transaction, the rough can assume to produce a minimum 100% value increase as it transfers from broker to cutter. The highest value capture will occur at the treat- ment and cutting stages and then again as the stone moves from wholesale to retail. The typical stages of the supply chain include: Production (mining), sale to broker, sale at local market, sorting of qual- ities (gem, near-gem and non-gem), processing (treating, preforming) cutting (faceting), sorting (parcel and single stone lots), sale to wholesale dealer and then sale to the retail jeweler. From its initial transaction to when it sells to a retail con- sumer, the typical colored stone will achieve a value capture of approximately 10X. Of all participants in the supply chain, the miner and the country in which the gem was mined will realize the least economic benefit from its sale. The miner, however, will assume the greatest risk. In recent years, gem producing countries, especially in Africa are increasingly looking to in-country processing and manu- facturing to increase economic benefit derived from their mineral resources. In time, this may shorten the supply chain and increase market transparency. u REFERENCES 1. Braunwart, Eric, per comm. June 2016. 2. Archuleta, Jennifer-Lynn The Color of Responsibility: Ethical Issues and Solutions in Colored Gemstones. Gems & Gemology, Summer 2016, Vol. 52, No. 2 PRICING: A GEMSTONE’S TRIP THROUGH THE MARKET Stuart Robertson, GIA GG GEMSTONE PRICING POSTER ABSTRACT PHOTO 1 - A student in Tanzania learns faceting as part of a government sponsored beneficiation program. PHOTO 2 - Miners have few options for reaching the international market at the source. Rough is typically sold to a broker who then accesses the local market. Multiple transactions will occur before the gem reaches the retail consumer. PHOTO 3 - unlike diamonds, the vast majority of colored stones are pro- duced by small scale artisan mining.