The ruby auction at the Singapore Turf Club is conducted in near silence, as potential buyers sift through varied lots of stones, some barely slivers, others great chunks, watched over by security guards and attendants who weigh each bag of gems in and out. The entire haul – more than 300kg of rubies – has been flown in from the Montepuez mine in Mozambique, operated by Gemfields, a UK-listed company that has plans to reinvent the once-moribund coloured gems sector.
The venue, a racetrack out in the city-state’s northwest, was chosen over the glitzier hotels and conference centres downtown in part because of the huge viewing windows that overlook the track – natural light, and lots of it, is vital. On each inspection desk is a bottle of Johnson’s Baby Oil, which brings out the stones’ colour.
Most of the buyers come from Thailand, which is traditionally the global hub for cutting and trading in coloured gems. By the end of the week, more than 1.5 million carats of rubies are sold, in a record auction that brings in $44 million (£30 million) for Gemfields.
The trade in coloured gemstones, such as rubies, emeralds and sapphires, has long been an opaque and fragmented industry. Since the middle of the last century – and probably before – it has faded into the shadow of the diamond industry, which has successfully inserted itself into cultural rituals around the world. Over the last few years, however, it has begun to re-emerge, and is now bucking a wider trend in the luxury goods sector, which has been hit by an economic slowdown in China.
This year alone, Gemfields has sold close to $175 million worth of rough rubies and emeralds across five auctions.
The coloured stone industry stuck in the past. It never found scale and it never really recognised [the power of branding]. For whatever reason, it was complacent
Ian Harebottle, the company’s CEO, says that the turnaround for “colour” has been due as much to supply as it has to demand. He points to the revolution in the diamond industry that followed the opening of the Kimberley mine in South Africa in the late 19th Century, which was the foundation stone of what would become De Beers. The mine opened up a steady, reliable supply of diamonds into the market, which gave structure to the downstream businesses of cutting, setting and selling the stones.
“For the first time in gemstones you had one source that gave large volumes on a continuous basis… Downstream no longer had to do everything,” he says. You could specialise, and you found Antwerp, New York, London, began to specialise in diamonds. You knew that no longer you had to spend two-thirds of your time finding supplies.”
In Montepuez and its Kagem mine in Zambia, Harebottle thinks Gemfields has the ‘Kimberleys’ of rubies and emeralds, respectively. The company, which is listed on the UK’s Alternative Investment Market, owns 75 per cent of both mines. Around 30 per cent of global ruby production comes from Montepuez. Creating a consistent and stable supply should, he says, allow the downstream to develop, as will the company’s more systematic approach to grading and auctioning gems, which resembles the highly successful approach taken by the diamond trade.
Having built its bridgehead, the diamond industry grew post-war by embracing branding and marketing. The diamond engagement ring was essentially invented by De Beers in the 1930s and 40s. As the power of brands rose in the latter half of the twentieth century, the diamond industry created slogans and campaigns that became fixed in the public consciousness – “diamonds are forever”; “diamonds are a girl’s best friend”.
Gemfields bought Fabergé – the fabled makers of jewelled eggs for Russia’s Tsars – in 2012, in part to promote the use of coloured gems. In June this year the company launched a campaign to promote Mozambican rubies, to help build an identity for a product whose arcane terminology – “cabochon”; “jardin” – are still alien to many.
At the same time, Harebottle says he hopes that coloured stones will find an appeal amongst Millennials looking to break with the diamonds favoured by their parents.
“The coloured stone industry stuck in the past,” Harebottle says. “It never found scale and it never really recognised [the power of branding]. For whatever reason, it was complacent. Other people, like the diamond industry have gone ahead. Can we repeat that?”
