In an industry traditionally dominated by the allure of clear, sparkling diamonds, a shift is emerging: diamond dealers are increasingly turning their attention to colored gemstones. Infact, since 2009, Gemfields the world’s largest colored stone miner, has tripled production at its Kagem emerald mine in Zambia to over 30 million carats per year. By 2023, revenue from this asset had surged eightfold, reaching approximately $90 million. Similar scenarios have taken place in Mozambican Rubies & Australian Sapphires.
Several factors fuel the rise in interest among diamond dealers in colored gemstones.
- The growing popularity of lab grown diamonds has created a more competitive environment, pushing traditional diamond dealers to explore new avenues.
- Colored gemstones, rich hues and distinctive character, offer an attractive alternative to consumers due to their undervalued nature.
- The rarity and exclusivity associated with certain colored stones offers products that stand out.
L – Graph shows the sharp increase in the average value per carat of rubies, rising from $154 last year to $290 this year. R- This graph illustrates the annual percentage increase in wholesale buying prices for sapphires, emeralds, and rubies since 2020. Rubies show the highest increase, followed by emeralds and sapphires.[3]
WHY ARE DIAMOND DEALERS BUYING COLORED GEMSTONES?
De Beers’ iconic marketing campaign in the 20th century, epitomized by “A diamond is forever,” positioned diamonds as the ultimate symbol of love and commitment. They reinforced this by controlling the supply chain, strategically stockpiling and releasing diamonds to maintain high prices and create a perception of rarity. This strategy provided the diamond market with decades of stability.
However, with the rise of lab-grown diamonds that offer the same visual appeal as natural diamonds at a fraction of the cost, market’s long-standing equilibrium was disrupted. Unlike natural diamonds, whose supply can be tightly controlled, synthetic mined diamonds has been produced in unlimited quantities, leading to price declines and diminishing the allure of natural diamonds.
Consumer attitudes have also shifted significantly. Today’s buyers are more informed and often prioritize transparency and ethical sourcing in their purchases. In response, many diamond dealers are diversifying their offerings by exploring the world of colored gemstones. The diamond alternative engagement ring market is one of the most lucrative reasons to invest in colored gemstones, especially sapphires.
IMPACT ON THE GEMSTONE MARKET
Supply Chain
Diamond dealers traditionally relied on stable supply chains in regions like South Africa and Russia, controlled by a few major players. In contrast, colored gemstones are sourced from diverse regions such as Southeast Asia, Africa, and South America. The World Bank estimates that over 80% of sapphires are sourced from artisanal and small-scale miners. As a result, diamond dealers must adapt while ensuring transparency and responsibility in their supply chains to meet evolving consumer expectations. This is the biggest reason why mining companies like Gemfields, Fura Gems & Gemrock mining companies focus on products like Ruby, Sapphires & Emeralds – because they are the ones Diamond companies mostly need to be sustainably sourced due to the consumer expectations as explained above.
Pricing
Over the last decade, we at NGM have steadily seen an increase in demand for unconventional sapphires like Australian Teal sapphires and Parti sapphires.
Today we as Gem rough buyers are facing the issues with supply due to the prices of raw material going up due to big diamond guys putting their money or some wanting to in the rough auctions. This is where we are seeing a huge amount of dollar going into and causing prices to go up every year. This is a very different business model because in the past 1000’s of gem dealers form an equilibrium price by setting the supply and demand naturally, without control.
Competition
Traditional gemstone dealers now face competition from established diamond dealers, who are leveraging their resources, marketing skills, and extensive customer networks to enter the colored gemstone market. This has prompted gemstone dealers to innovate, emphasizing unique, high-quality stones with a focus on ethical sourcing and craftsmanship. For example, Australian mining rules are as strong as the ones in Montana Sapphire mining.
Ethical Sourcing
The close scrutiny on gemstone mining has initiated in a vast change in mining policies around the world. This is particularly important for colored gemstones as most of the mining in done in a small scale and artisanal manner, thus ensuring minimum damage to the native environment and community. We source from leading sources like Fura Gems that is not only the first and only producer of the big-three colour gemstones but also is committed to socially and environmentally responsible mining practices.
Mozambique rubies are sustainably sourced, benefiting from an abundant supply, consistent quality, and favorable mining conditions. The country’s political stability and supportive regulations further enhance its position in the ethically sourced ruby market, ensuring fair pricing and just compensation for labor. Australian sapphires are similarly positioned in terms of consistent supply and ethical mining protocols as strict regulations need to be followed for any such procedures.
WHAT ARE THE CHALLENGES IN BUYING COLORED GEMSTONES COMPARED TO DIAMONDS?
Standardization and Quality Control
Ensuring consistent quality across diverse gemstone types requires a deep understanding of each stone and a rigorous quality control process, which can be difficult for dealers more accustomed to the uniformity of diamonds.
The challenge with colored gemstones lie in obtaining a consistent quality of stones, in the same calibration and sizes. Since, we at NGM have been working with colored gemstones for over 4 decades and 3 generations now, we understand these nuances. For this reason we would like to explain exactly what we did with these 5 mm round Australian sapphires; we mass produce and then assort by color; even though its difficult to name them; we categorize them as Light Green, Green, deep Green, Greenish teal, Blueish teal. This way of categorization helps make things within the range of colored stone buyers who are coming from “give me SI-GH- 0.01 ct 50 cts tomorrow” , so we are very ready for these type of buyers.
Our gem cutting factory in Bangkok, Thailand ensures a consistent supply of high-quality gemstones, particularly Mozambique rubies, Australian sapphires in all colors and also in custom calibrations. We create non traditional cuts like tablet cuts, portrait cuts, rose cut as well means that lesser rough goes to waste in the pursuit of traditional standards; and also non traditional shapes like Hexagons, Bagettes, Emerald cuts, Asschers and Kites.
