Tag Archives: Brazil Gemstones

Wikileaks, Zimbabwe & Blood Diamonds, Part II

blood_diamond_thumb

by Richard W. Wise, G.G.

©2010

Wikileaks, if it has done nothing else, has directed a searingly bright light on the hypocritical world of international relations in general and the Kimberly Process in particular.  For those who don’t know about it, The Kimberly Process comes down to a series of criteria, developed by the diamond industry, whereby a chain of ownership is established to enable sellers to certify that the diamond you are buying for your wife, to celebrate the birthday of the Prince of Peace, was not obtained from a starving West African miner at machete point.  The process was initiated because of a storm of press reports generated by Global Witness, another bunch of  whistle-blowing trouble makers who objected to people having their arms and legs hacked in the pursuit of diamonds to fund  bloody civil conflicts in West Africa.

In August 2010 the Zimbabwe government auctioned 71 million  in Marange diamonds certified by The Kimberly Process.  The Process as it relates to current events in Zimbabwe has become something of a joke.  In June 2009, Ian Smillie, a conflict diamond expert, architect and Director of The Kimberly Process resigned, stating:  “when regulators fail to regulate, the systems they were designed to protect collapse.”  In an interview with Bob Bates of Jewelers Circular Keystone, Smillie has this to say about Zimbabwe:

“With Zimbabwe, the government of South Africa is really protective of the Mugabe regime. But it isn’t just them. The Russians say this is not a human rights organization. But what is it exactly supposed to be? It’s there to protect people against conflict diamonds. Some governments are placing their small regional political interests over the interest of the diamond industries. Others in the region just hope that people won’t care. Interview with Ian Smillie former Director of The Kimberly Process: Source:  Jewelers Circular Keystone, 2009

Jennifer Connelly and Leonardo Di Caprio in a scene from the movie Blood Diamonds.  I have been to a lot of gem mines but I have never run into Jennifer.

Jennifer Connelly and Leonardo Di Caprio in a scene from the movie Blood Diamonds. I have been to a lot of gem mines but I have yet to run into Jennifer.

According to cables originating from the American Embassy in Zimbabwe, undocumented diamonds mined in Marange area are sold directly to foreign buyers:

“Although Zimbabwe is a participant in the
Kimberley process, the diamonds from Chiadzwa are
undocumented and therefore are not in compliance with
Kimberley, which requires loose uncut diamonds to be
certified.”
Source:  Wikileaks

This assertion is backed up by an article written by in 2008 by Chenjerai Hove a celebrated Zimbabwean writer who was driven out of Zimbabwe in 2001 for criticizing President Robert Mugabe.   “Marange and Chiadzwa are now international destinations. Israelis, Lebanese, Belgians, Afrikaners, Japanese, Americans, Germans, national political heavyweights and businessmen, all sorts of diamond gladiators who sniff the air for wealth, have been seen visiting the once-neglected Chiadzwa, Marange.” Read the full article.

The leaked cables go on to state:

“The highest quality diamonds are not sent to Dubai,but are shipped to Belgium, Israel, or South Africa for
cutting”
Source:  Wikileaks

It is important to that these quotations are taken from cables classified by Ambassador McGee, a representative of the United States government to assure that the information they contained would not be made public.  Who was at risk here, which sources and who’s assets?   According to the leaked cables these assets include:

“Cranswick said that RBZ Governor Gideon Gono,
Grace Mugabe, wife of President Robert Mugabe, VicePresident
Joyce Mujuru, Mines and Mining Development Minister Amos
Midzi, General Constantine Chiwenga and wife Jocelyn, CIO
Director Happyton Bonyongwe, Manicaland Governor Chris
Mushowe, and several white Zimbabweans, including Greg Scott, and Hendrik O,Neill, are all involved in the
Marange diamond trade.”

Source:  Wikileaks

Why were these cables classified?  Was it Ambassador McGee’s objective to protect the people named above or was it simply to avoid embarrassing a senior attache’s wife who might choose to wear her shiny new three carat diamond ring to an embassy cocktail party?

Grace Mugabe, wife of the President of Zimbabwe has filed a 10M dollar libel suit.  What's that on your finger, Grace?

Grace Mugabe, wife of the President of Zimbabwe has filed a 10M dollar libel suit. What's that on your finger, Grace?

Yesterday it was reported that the wife of the president of Zimbabwe, Grace Mugabe had filed a defamation suit against the South African newspaper The Standard for reproducing reports from Wikileaks.

Are Zimbabwe Blood Diamonds Identifiable?:

Unlike colored gemstone that are, for the most part, formed in the earth’s crust and contain inclusions specific to the geographic areas where they were formed, diamonds are formed in the mantle.   For the most part, it is not possible to separate diamonds by origin.  However, I have read several reports that seem to indicate that these diamonds are easily identifiable, at least in the rough.  The following is quoted from www.diamonds.net:

“The source suspects that Marange diamonds were being filtered out to most of the major diamond centers, including Israel, South Africa and Belgium for larger stones, and India and Dubai for the smaller goods. He described Marange diamonds as being unique in appearance and therefore very recognizable “even to the layman.” They vary in value from $5-per-carat industrial stones to $1,000-per-carat gem-quality diamonds, he explained.”

This source gives not details as to how Marange diamonds might be identified by a layman, but according to one of our readers, Deepak, a diamond dealer from India, Marange diamonds do show a distinctive green  tint (see Part I, Deepak 12/19 comments).  Diamonds are color graded by placing them table down in a white tray under special lighting.   Under these conditions, according the Deepak, Marange stones will betray a slight greenish cast, we are not talking green diamonds here, just a very slight tint, but distinctive enough to be seen by an experienced grader.

The possibility that immediately comes to mind is that the green tint is the result of natural radiation.  Fancy green diamonds derive their coloring from natural radiation.  Is this the source of the green tint in the stones from Zimbabwe?   If so, these stones should be easily detectable.   It would seem that a U. S. Customs agent, armed with a Geiger counter, or a more advanced instrument,  might significantly reduce the flow of blood diamonds into the U. S., the world’s largest diamond market.

Wikileaks, Saint or Savior?

The U. S. Government is doing its best to demonize Wikileaks.  President Obama has taken a posture that has him,  seemingly, talking out of both sides of his mouth all at once.  “While I’m concerned about the disclosure of sensitive information from the battlefield that could potentially jeopardize individuals or operations, the fact is, these documents don’t reveal any issues that haven’t already informed our public debate on Afghanistan…” Mr. Obama said.”  Well, which is it?  Wikileaks revelations are damaging our national security or they are irrelevant?  Clearly people are dying in Zimbabwe, about five per week according to documents leaked.

Government sources are fond of using the term collateral damage. It means innocent people died, but usually not our innocent people.   When, for example, a drone strike is called in on a suspected Al Qaeda or Taliban gathering in Afghanistan, the civilians who are killed as part of our efforts to suppress these two movements is called unfortunate and ultimately dismissed as collateral damage.  In the case of Zimbabwe and its brutal exploitation of both its resources and its people, the outing of those responsible is necessary.  If it is not done, many more will suffer and by some accounts they have, at the rate of several per week.  The question we must ask is why the secrecy?  Why were  official U. S. Government cables detailing these atrocities suppressed by classifying them?  What vital American interests are we protecting?  De Beers, the diamond industry, big business?

I believe that it is opacity that is the true cause of collateral damage in this case and most others.   President Obama came into office with a promise of transparency.  It appears that this is another promise that will not be kept.   When Wikileaks reveals the names of American agents in the field, they are at risk.  When our government suppresses  information about blood diamonds in Zimbabwe, people die.   When we accept a public relations ploy such as The Kimberly Process in place of a real certification, a few people get rich and more people die.  I think the real issue here is not Wikileaks, it is transparency.  If we had transparency, Wikileaks would not only be irrelevant, it would not exist and there would be no issue and a lot fewer deaths.

Gem Prices follow Real Estate in the New Gilded Age

Gem Prices in The New Gilded Age


By Richard W. Wise, G.G.

©2007

Gem prices are definitely on the rise. However, these price increases seem to be following general market trends that is, the largest price increasing have been at the very upper end of the market while commercial qualities have remained more or less static. This compares almost exactly to the situation in the U. S. real-estate market.

From Florida’s Miami Beach to The Berkshires of Massachusetts, homes in the under 1 million price range are languishing on the market while homes priced in the one million plus category find ready buyers. In a recent article the New York Times it is reported that condos priced at a median price of 1 million in the Miami area have slipped slightly while those at the 1.5 million level have actually seen a slight increase. In the upscale Berkshire Mountains of Massachusetts the story repeats itself. Prices on single family homes below 1 million are not selling while the market for 1 million plus homes is described as brisk.

Likewise, Prices for fine quality Black opal have doubled in three years and prices for ruby, particularly the very rare fine unheated stones has risen 60%. Due to a diversity of sources, prices for unenhanced fine blue sapphire, the most popular colored gemstone in the U. S. is up a paltry 20%.

Some of this increase is due to the weak dollar which is down 40% against the Australian dollar, 20% against the baht and 22% against the Columbian peso. This has made U. S. real estate relatively cheap for foreign buyers. Since the international gem market operates mainly in dollars the effect has been similar.

As we move toward the low-end, gem prices have hardly moved at all. The bread and butter market is in the doldrums, commercial to good qualities have hardly moved upward at all. In fact, the entire low to mid range jewelry industry is experiencing something of a recession.

I Get Letters:

Seems like I get at least one question like this every week:

Judy from Melbourne writes:

Hello,

Thank you for your site and all your wonderful articles and books.
I wonder if you can help with how to appraise a very unusual stone my partner is thinking of buying. It is a 66ct peridot, loupe clean, square step cut with a deep pavilion, very dark green (but not olive) with almost no yellow, evenly saturated, and bought in Burma from the Burmese owner of a small mine.

The price being asked is around…(removed)…Appraisers here in Melbourne have never seen a similar stone, and say they have no benchmark for it, but it has been suggested that collectors might pay substantially more than the price being asked.

I would very much appreciate any guidance you can give me.

Answer:

Like Antiques Road Show in braille.

Judi,

How does one answer such a question without seeing the stone. I get quite a few similar emails so, if you don’t mind I will post the question and answer on my blog. This reminds me of a call in program occasionally run on our local radio station, WAMC. Two antique dealers are asked to value items described by the callers. They never actually see the item but that fact does not seem to get in their way. Its like Antiques Road Show in braille.

One of a kind stones, big stones are difficult to appraise even when they are in front of you. Is there a peridot worth that price, certainly! Based on a respected price list, the top retail price for Peridot in that size would be $360 per carat. for an extra fine gem. Is your stone worth that much? I really have no idea. The best one I ever saw had an asking price of $5,000 per carat. You say its not olive meaning no gray mask? The depth of color (saturation, tone, crystal and the quality of the cut would be the remaining key factors.

My best advise: Show it to someone who knows. In lieu of that, its anybody’s guess

Whats a buyer to do?

Follow me on gem buying adventures in the pearl farms of Tahiti. Visit the gem fields of Australia and Brazil. 120 carefully selected photographs showing examples of the highest quality gems to< img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer;" src="http://3.bp.blogspot.com/_jPHBjO2OLDs/RjD1BsdOzzI/AAAAAAAAALU/cJrRFFng7C8/s400/Front+cover++3-D+art.jpg" alt="" id="BLOGGER_PHOTO_ID_5057811790999506738" border="0" /> educate the eye, including the Rockefeller Sapphire and many more of the world’s most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur’s Guide To Precious Gemstones.


“Wise is a renowned author… He’s
done a marvelous job of this first book, monumental work, a tour de force…My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

whether you like to know what the best colour is in Tanzanite, or how to grade a Diamond, you will find it in this book. No other book I read before dealt with this topic is such detail as Richard Wise’s masterpiece.”

A. Van Acker, FGA
Amazon June 2005

“Secrets Of The Gem Trade: The Connoisseurs Guide To Precious Gemstones by Richard W. Wise is an impressive new reference for dedicated dealers and collectors of gems, gemstones, and … pearls. Introducing and descriptively exploring each and every gem covered in the easy-to-use reference, Secrets Of The Gem Trade contains an illustrated summary of each stone inclusive of its history and general information, hue and tone, saturation, which may be noticed as the finest, an understanding of the particular gems rarity, and the caution for synthetics and how to depict them, however depending upon the stone there may be description of clarity, color fading, multi-color effect, etc. Secrets Of The Gem Trade is very highly recommended to anyone interested in gemology as a superbly organized, authoritative, comprehensive, and easy-to-follow reference.”

Midwest Book Review
April 2006

Only $37.95. Read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com

Big Spike in Topaz Prices

















Mine Owners Manipulate Local Market

By Richard W. Wise, G.G.

© 2007

Collectors in the U. S. have noticed a substantial spike in topaz prices. Rumors have recently been circulating in the trade to the effect that price hikes were the result of forced closings of topaz mines by government environmental officials. I heard similar rumors from usually well informed dealers on a trip to Brazil in late January. (image: above left slightly orangy-pink Imperial topaz ring courtesy R. W. Wise, Goldsmiths)

According to David Epstein, author of The Gem Merchant and an American dealer living in Brazil the latest price increases are a result of market manipulation by the owners of Capão, Brazil’s largest commercial topaz mine. According to Epstein, Capao’s owners are systematically buying all the peach topaz produced by the 10-12 smaller mines currently active in the area in the topaz producing area. (image left: 0672 medium toned pinkish orange summer or ripe peach topaz from Capao Mine) Capão is located about five kilometers from the small village of Rodrigo Silva almost dead center of the two hundred ninety square kilometer topaz belt running in an east-west direction west of Oro Preto. (Image above: #2622 2.13 carat light toned pinkish orange spring peach topaz) For more on the Capão mine: http://Topaz; A Visit To the Mine

This buy up has been targeted at stones in the peach hues that the mine owners consider undervalued. Peach can be best defined as a pinkish-orange-brown to orangy pink range of hues. You will note that I do not use the term “Imperial” because the traditional distinction between precious and imperial makes little sense. Is an Imperial topaz not precious? Imperial is one of those terms that confuse rather than clarify. I like the terms spring, ripe and winter peach. A bit faciful? Yes, but fairly descriptive. As the orange tone deepens the stone goes from spring to ripe to overripe (winter), rotten would work but thats a hell of a way to market a gemstone.

The geographically limited production of topaz has made the market control scenario more than just possible. Commercial quantities of precious topaz ( all topaz other than the blue irradiated material), is mined in just one place, a twenty-square mile area in the Brazilian state Of Minas Gerais immediately adjacent to the city of Oro Preto. Capão is, in fact, one of only two large mechanized mines and the only one that currently sells commercial quantities into the world market. According to Epstein Capão’s owner Dr. Wagner and chief buyer Sr. Edgar have been aggressively buying up peach stones for more than two years.

Capão’s aggressive buying has born fruit. Prices in Brazil have jumped between two to three times previous levels. Oddly enough topaz prices in the higher priced pink, red and sherry colors have remained stable. According to Epstein, Capão’s principals believe that prices in these rarer categories are already high and they miners feared a falloff in demand if they attempted to push them higher.

Quick Review: The Gem Merchant, How To be One, How to Deal with One by David Stanley Epstein:

David Epstein’s The Gem Merchant has been out for several years but I have had a number of readers contact me for advice on how to become a dealer. Read this book! It is an excellent primer for those interested in entering the arcane world of the gem dealer. If you are interested in tax-deductible travel to exotic places, buying and selling beautiful things, read this book before you buy your first air ticket.

Mistakes made by neophyte gem dealers can be costly. David Epstein has been a practicing buyer’s agent in Brazil for twenty years and he knows whereof he speaks. This book will save you money.

“This book should be carefully read and digested, by those involved in buying and selling gemstones…”

Austrailian Gemmologist

Order direct from the book’s author
www.gembuying.com


Interested in reading more about real life adventures and secrets of the gem trade? Follow me on gem buying adventures in the exotic entrepots of Burma and East Africa. Visit the gem fields of Austrailia and Brazil’s famous Capao mine. 120 photographs including some of the world’s most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur’s Guide To Precious Gemstones.

“Wise is a renowned author… He’s
done a marvelous job of this first book, monumental work, a tour de force…My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

Only $39.95. You can read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com

Rockin in Rio

“Rio, when my baby smiles at me I go to Rio de Janeiro”

Arrived in Rio last Sunday night. Not long after my book came out in 2001 I received a letter from Hans Stern, 84-year-old founder of H. Stern the world’s fifth largest jewelry company. It was gratifying to know that a man like Mr. Stern had not only liked the book but had taken the time to write. “Next time you are in Rio, stop in and have a Café Zihno.” So taking the man at his word I called. Next thing I knew a car arrived and my wife Rebekah and I were on our way to Stern’s headquarters in Ipanema.

We spent an enjoyable hour as promised over Café zihno. For those of you who have never been to Brazil, Café Zihno is the national drink and is very much like Italian espresso. Mr. Stern may be an octogenarian but he still loves his job and is in the office every day

Mr. Stern brought out his personal gem collection, which included a carat plus Emerald cat’s-eye. I haven’t seen one so fine since 1987. He also showed us a tray containing several hundred carats of sherry topaz and an exceptional large red topaz from the Capao mine, the best I have ever seen. We topped it all off with a personally conducted tour of the Stern headquarters.

Lecture Series

I have been invited on this 2007 Regent (Radisson) Seven Seas World Cruise to deliver a series of lectures on gemstones. I have a grueling schedule that requires a 50-minute lecture about every three days. Other than that Rebekah and I are free to enjoy the many pleasures of the world cruise. Regent cruises are the last word in luxury, everything is included. With ports of call like St. Helena, Walvis Bay, Cape Town and Mombassa we will have little time to get bored.

St. Helena

Four days by ship out of Rio, we arrived sighted the island. St. Helena is a small island off the coast of West Africa. When Napoleon Bonaparte escaped from Elba the English, taking no chances exiled him to this small bit of volcanic rock, 500 miles from nowhere, after his final defeat at Waterloo. The former Emperor of the French spent his last six years on the island under the watchful eye of the British Army.

Originally discovered by the Portuguese, St. Helena was used for a refreshment station by Portuguese, Dutch and English ships navigating around the Cape of Good Hope. In those days, mariners often left goats and sheep and planted vegetables at places along their routes to reprovision other ships traveling that way.

The famous French Gem dealer and traveler, Jean-Baptiste Tavernier, the man who discovered what was to become the Hope Diamond, arrived on the island on February 8, 1649, twenty-two days out of Cape Town on a voyage from Batavia and noted the many lemon trees that grew on the island. Lemon juice, in those days, was the sovereign remedy for Scurvy, a disease caused by a lack of fresh vegetables.

We took the tour. Seems like you can see the whole place in about three hours. As to what the 6,000 or so present inhabitants on St. Helena’s 47 square miles is a mystery to me but the fishing is good.

Namibian Diamonds

Dateline: Walvis Bay, Namibia. Namibia, one of Africa’s “newest” nations, stretches 1300 km down Africa’s southwest coast, bordered in the north by Angola. to the south by The Republic of South Africa.

In 1908, a railway worker discovered the first diamonds in what was then the German colony of South West Africa. The discovery set off a free-for-all gem rush that ended only when the Colonial administration absorbed all private leases into one huge Concession, stretching the length of the country’s southern coast and some 100 km inland.

After the world war the territory became a League of Nations Protectorate administered by South Africa, which managed t
o hold onto the colony until 1990. Namibia has the richest marine diamond deposits in the world, with an estimated reserve of over 1.5 billion carats. All these deposits are secondary deposits meaning that the diamonds originally came from volcanic in situ deposits that were transported via the Orange river from South Africa and swept northward by the northwest current that runs just off the coast.

The average size of diamonds mined off the Namibian coast is a bit over ½ carat. A whopping 95% of these stones are gem quality.

Diamonds are responsible for 42% of all export earnings and 52% of government income and account for between 7-10% of the country’s GDP.