Home » 2005 » November

Archive for November, 2005

Australian Sapphire Industry 2005 Report

Posted November 26, 2005 By AussieSapphire

It’s been an interesting trading year for those in the Australian sapphire industry, difficult to say the least. It’s puzzling that coloured gemstones seem one of the only commodities not caught up in the resource boom with gold reaching new record prices as we speak and diamond sales strong at good prices to mention just a couple. There have been some talk overseas of an impending shortage of coloured gems causing price rises in the near future but we are yet to see this.

On a knife edge is how I would describe the Australian Sapphire industry. After 5 years of depressed and decreasing demand for our production, some really serious decisions will be made running up to Christmas. The decision for some to reopen as normal or have some time closed after the Christmas break will be in the minds of most of us. The market shows little sign of returning to pre Sep 11 2001 levels. It has been some time since parcels of rough sapphire were able to be sold on a regular basis at a price which gave both us, the miner and the buyer enough profit to operate effectively. As I write we have not had a Thai buyer here for 4 months and no sign that any will buy before mid January at the earliest. Over 5 months to wait for your pay check is Darn Hard!

We have found ourselves in the office much more in the last 12 months having ventured into online direct sales in January 2005. This has been very challenging but rewarding as we are now able to market our fine sapphire to the world in the way it deserves. I believe there is a future for this type of selling but dont be fooled, it is a hell of a lot of work. Selling individual stones, of course, can never replace the need to sell bigger parcels of mine run sapphire from time to time. Hence we have been working hard to find new markets and working alongside Wilson Gems to this end. So far, we have been working in India, China and with specialty stone into the USA – the first two leads have been disappointing so far as price always seems to rule us out no matter how hard we try and cut our margins. However, feedback from our US customers has been great with demand for guaranteed natural or basic heated sapphire direct from the mine being very good – people are becoming more interested in knowing more about where their gems come from.

One of the causes of a downturn in demand for coloured gemstones seems obvious to us – the rampant increase in the use of treatments to significantly alter the stone along with the widespread use of synthetics. We recently had a agent in China showing our stone to cutting factories there – he has reported being shown synthetic and treated rough in mine run parcels from other countries. This practice has also been reported by Vincent Pardieu of the AIGS in Thailand for mines in a number of ruby/sapphire mines in Asia and Africa. This is terrible to hear as it does the whole industry damage.

I have great difficulty with the word “natural” being used by the jewellery industry to describe non-synthetic gems regardless of treatment status. We must push in Australia for clear and accurate disclosure at all levels of the industry. We are in a great position as probably one of the few countries where gemstones of truly natural condition can be sourced with surety. These new treatments are here to stay but we must be able to market our fully natural or good old fashioned basic heat treated gems to their best advantage – this will be difficult until we get some assistance from the jewellery trade and large gemstone dealers.

I am frustrated by the supposed support from the larger wholesale gemstone dealers who claim that they support the Australian sapphire industry but choose to bypass Australian miners and travel to Thailand to buy sapphire of mostly unknown origin at the lowest price possible. We know of several larger operators who would bend over backwards to supply cut gems to the trade but these offers have not been taken up in the past. We hope that some wholesale dealers might reconsider their position on this in the near future.

There still seems to be some money out there for these special gems suitable for investment purposes. These are always hard to find but some still seem to be getting pulled out of the back of the safe by old miners as their pockets get emptier. We have sold several in the last couple of months to all corners of the globe (Germany, Malaysia, etc). It is a pity to see these very rare and irreplaceable gems leave our shores but it takes a certain type of collector to appreciate the value of these items.

We have found ourselves in the jewellery game. This started out as just a way of showcasing our gems so that customers could see the quality in a finished piece but we now find that we really enjoy being involved in the designing and manufacturing process. We now have a large catalogue of fine handmade pieces of all types. Most of these we have supplied to retail jewellers in the local region. We are certainly happy to talk to any jewellers who see the advantage in being able to stock an exclusive, limited edition range – something very different to the usual mass-produced products normally available.

At this moment, our colleague Jack Wilson is in Bangkok checking market trends. His initial report back to us after only one day there was that there did not appear to be any shortage of good blue sapphire on the market. Prices for some of this Madagascan sapphire appeared below our production cost – while this is good for the buyer in the short term, you must question how sustainable the prices and resource can be. There still seems to be a lot of very small Chinese dark sapphire (almost black and likely to be sold as Australian sapphire overseas) being sold at very cheap rates. We will have more news when Jack returns home – hopefully some of it will be good.

A new find in the Inverell area proves that there is still plenty of excellent sapphire to be found in Australia if market conditions encourage exploration and resource development. The sapphire I have seen from this exploration testing looks very exciting – good colour and large size should make it easily saleable. Of course, because of government red tape, it will take some time and considerable investment before this stone becomes available. See an example in the photo below.

There is talk of a buyer for a larger mine at Kings Plains that has been closed for a good while. I hope they have done careful research on the viability of this operation – it is a difficult business to be in at the moment.

To further illustrate this point, the large Queensland sapphire mining company Australis has just appointed an administrator – ASIC had taken action to appoint a receiver in October. The company has chosen to appoint the administrator and continue operating although a trading halt in shares is still in place. Hopefully this will work out ok for all concerned as there has been a large investment of capital into this operation.

THE FUTURE FOR aussiesapphire.com.au
With continued support from our local and overseas clients, we plan to keep operating in the New Year although not at full production. Costs are just too high to run the plant at full capacity until prices and demand improve, however we plan to keep our workers in a job as long as possible. What can you do to help ? Buy Australian wherever you can and keep asking your retail jeweller for all the facts – insist on knowing what you buy so you can make an informed decision. If they are unsure of the facts, find someone who knows their product.

Cheers from Andrew and Leah Lane and have a great holiday season. www.aussiesapphire.com.au

Remember that this report has been written from our point of view as an Australian sapphire miner and does not represent any official position from within the industry. It is presented for your interest only.

Gem of the Month: Citrine

Posted November 25, 2005 By AussieSapphire

Running a bit late with this Gem of the Month article but this cheerful gemstone is worth waiting for – better get a move on or it will be time to do the gem for December. Citrine is a very popular gem and is listed as the modern birthstone for November along with the much more difficult to find Golden Topaz.

As might be guessed from the name, citrine comes in a range of citrus colours ranging from lemon yellow, gold to the rich orange of a fine madeira. This affordable gem is ideal for a variety of uses as it is usually very clean, without inclusions and available in large sizes. For these reasons, citrine is often used by specialist cutters for custom shapes or new faceting techniques as seen in the concave faceted gem at left (image from Gem-by-Gem article).

Gemmology matters: Citrine is a macrocrystalline variety of quartz (SiO2) and is not the more valuable topaz. Citrine, like all quartz has a hardness of 7 . Ctrine has a hexagonal crystal system with no cleavage, vitrous lustre and conchoidal fracture.

Citrine may be found naturally but almost all commercially available citrine is heat-treated amethyst (much of it mined in Brazil). Good quality citrine found in its natural form is relatively rare. The color of citrine is due to trace amounts of iron impurities within the crystal structure – the difference between citrine and amethyst is only the oxidation state of these iron impurities. Heating amethyst reduces the oxidation state of the iron impurities and causes the purple colour of amethyst to fade and become yellow to reddish-orange (citrine). Care should be taken to avoid scratches/damage and prolonged exposure to sunlight and extreme heat.

Mythology and Lore: In ancient times, citrine was carried as a protection against snake venom and evil thoughts. It is said to promote creativity and intuition, help personal clarity and eliminate self-destructive tendencies. Citrine is also said to be very helpful in assisting one to acquire and maintain wealth. Citrine is the zodiac stone for the sign of Virgo and the anniversary gemstone for the 13th and 17th years of marriage.

Alternatives in yellow: There are a number of alternative gemstones with the range of yellows and oranges found in citrine. All of these have their advantages but are generally more expensive than citrine. Yellow or orange sapphire is readily available now at reasonable prices – while sapphire has the benefit of increased hardness (9), buyers should be aware that much of this yellow/orange material has been Beryllium treated (bulk or lattice diffusion). Fully natural yellow sapphires of good quality are much more rare and a price premium exists for these types – ideal for those wanting something really special.

See photo at left of a natural (untreated) yellow sapphire ring from our range – sapphire is 1.5 carats set in 9k white gold (please enquire for further details).

Yellow and orange gems are also available in tourmaline, fire opal, topaz, garnet (spessartite, hessonite, etc) and beryl (heliodor or golden beryl). Of course, diamonds are also found in shades of yellow, champagne or orange – these are termed fancy diamonds and the colour may be natural or the result of some treatment process. There is often a large price differential between gemstones of natural colour and where colour is enhanced or altered by treatment so please insist on full disclosure on treatment status before any significant purchase.

Links of Interest:
International Colored Gemstone Association – Gem by Gem article.
Bernadine Fine Art Jewelery – Citrine Facts and Information
Mineralminers – Citrine Factsheet

Thank you for your interest. The December Gemstone of the Month article will appear shortly.
Cheers for now from Aussie Sapphire

School Project Information on Sapphires

Posted November 21, 2005 By AussieSapphire

Every now and then we get enquiries from students doing school projects on sapphire mining.  We are certainly happy to help out with these enquiries (from the student please – dont make Mum or Dad do your project for you) so in addition to the information already present on our website, here is a collection of useful sites and information that may help.

Sapphires are commercially mined in Queensland and northern NSW.  Although Australia once produced up to 70% of the world’s supply of sapphire, market conditions in recent years have been extremely difficult resulting in the closure of many mines.  Aussie Sapphire is one of only a few commercial miners left in the Glen Innes/Inverell district now. For this reason, some of the market information and operator details listed in the links below may be out of date. As always, when researching on the internet, you should attempt to double-check your sources and read with a critical eye.

General Information:
The relevant government authority governing mining in NSW is the Department of Primary Industries – see here for articles containing information on gemstone mining and fossicking in NSW. In Queensland, the mining industry is regulated by the Department of Natural Resources and Mines – see here for information on sapphire mining and fossicking. The Gemmological Association of Australia has produced a useful article giving an overview of Australian Sapphire which may also be of interest.

Commercial Mining:
We have a number of pages on our website which detail the process of commercial mining giving a step-by-step description with photos and short video clips. We are quite happy for these images to be used in projects (with due acknowledgement please). See here to begin the “Virtual Tour of our Mine” or see our photo gallery of images and video clips.  For photos of the largest commercial sapphire mine in NSW, see this website – a mine at nearby Kings Plains run by Wilson Gems and Investments – this plant is much larger as the photos indicate and is working a very rich resource of blue sapphire.

The sapphire mining industry in Australia is export-based with almost all production currently being exported as “mine run” to Thailand for further processing and sale. Although a small portion of the best sapphires are cut locally for domestic sale, this does not happen to a large degree. Unfortunately, on the world market, we must compete with other countries where costs of production are much lower. This, combined with low levels of demand in recent years are causing problems for many Australian sapphire miners.

Here at Aussie Sapphire, we value add much of our production and sell direct to wholesalers and retail customers.  Currently, over half of our sales are overseas with most of this to the USA – other countries include the UK, Ireland, France, Spain, Germany, Canada, Japan, South Africa and many more.

Environmental Protection:
Environmental protection is a priority for mining today. In most cases, miners have to pay a deposit or bond to the Mines Department to cover the cost of restoring the land to its original condition.  This bond is not returned unless the land is restored properly.  There are rules on how and where we can mine so that we do not cause damage to the environment.  In our case, as we also use our land for farming as well as mining, this provides a powerful incentive to look after the land as well as we can.

Sapphire mining is a relatively low-impact activity with small strip mining – the cut is backfilled continuously as it moves forward.  Top soil is set aside while the small area is mined and then returned when the cut is filled – the area is smoothed and then cropped or planted down to pasture. We expect good agricultural production from our land after mining is completed.  It is prohibited for mining activity to impact on water flow or quality. These environmental restrictions are in contrast to the lack of regulation on mining in some of countries which we compete with.  Severe negative environmental impacts are common in some of these countries where mining land is not restored to productive condition or mining is carried out directly within the river flow itself – the very low prices paid to the miner for their gems and the lack of government control do not provide much incentive to look after the land.

Workplace Safety:
Although mining is often a dangerous occupation, the particular nature of sapphire mining means it is relatively safe.  Safety is governed by Workcover NSW and all workers are covered by workers compensation insurance to cover workplace injuries or accidents. Safety is regarded as a priority at Aussie Sapphire and regular meetings are held with the aim of improving safety.  A mine manager must be appointed to oversee all operations and take responsibility for operating a safe worksite.  Operators must be qualified to work the excavators. Hearing protection is worn when operating machinery or trucks. Suitable clothing is also worn to prevent snagging on machinery or exposing skin to excess sun. In larger mines where there may be a danger from rocks falling from height, safety helmets are worn for head protection. Safety signs are posted to warn of potential hazards and gates are locked to prevent casual access by visitors who may not be aware of specific dangers on the site.  See the NSW DPI website for more information on mine safety.

Jobs within the industry:
Commercial sapphire mining involves the digging of sapphire wash, processing the wash, separating gems from the concentrate, grading of these gems.  At this point, gems may be sold in the rough or further processed for sale by cutting or faceting and making into jewellery.  Marketing of the gems is an important job – the internet is playing an increasingly important role in this task nowadays.  General office administration (record keeping, invoicing, ordering, etc) is another important job.  In small mines like ours, the mine operators need to be very multi-skilled – we do most of these jobs ourselves. In larger mines, these jobs might be allocated to a number of different people.

Gem cutting is a very specialised job which takes skill and experience – we have a small number of local people who cut the best of our larger gems while much of the very small sapphire is cut overseas where labour costs are cheaper.

Problems in the sapphire industry
Problems in the sapphire industry generally relate to the difficult market conditions currently being experienced.  We are competing in a global market with countries whose costs of production are much lower than ours and where there is significantly less government regulation.  To overcome this problem, we need to market our sapphire as being ethically produced in an environmentally responsible manner.  See the Ethical Gem Mining page on our website for more on this issue.

Another problem is the poor reputation of Australian sapphire as being over dark and inferior in quality.  While it is true that the basaltic type sapphire produced by Australia is generally more saturated in colour than some other resources, it ignores the fact that Australia does produce excellent quality sapphire of very fine colour.  Every resource produces a wide range of colour and type – which means both good and bad stone.  Unfortunately, Australian sapphire has been marketed in such as way that the fine quality has been mislabelled leading to a unfair perception that we only produce poor quality.  Difficult to overcome this attitude but we are trying to educate the buyers – see our Reddestone Sapphire and Sapphire Colour pages for more information on this issue.

The other problem in the gemstone industry is the lack of disclosure of enhancement treatments.  Many gems have been treated in some way to enhance their appearance – in the case of sapphire, almost all commercially available gems have been treated in some way.  While basic heat treatment is standard within the industry and accepted by buyers, some of the newer treatments have a significant impact on gem value.  Difficulty and cost in detecting these treatments have caused problems within the coloured stone market.  See the Gem Treatment page on our website for more on this issue.


Hope this information has been of some use – please let us know if there are any other areas which need covering.  Remember, Australia still produces very high quality sapphire so support our local industry – “true blue” Aussie Sapphire.

cheers for now from Aussie Sapphire

New Listings on Ebay

Posted November 21, 2005 By AussieSapphire

Just announcing that we have just put online a number of new listings for sapphire rough and other itesms – these are available now at the Aussie Sapphire Ebay Store. Demand for quality sapphire rough has been excellent with a number of repeat buyers and lots of new bidders – we certainly appreciate your support and will be continuing to list more great stones very soon.

Production in recent weeks has been of excellent quality although quantity is a little down due to other work committments (we are in the middle of planting summer crops at the moment so the mine has not been operating full time). However, there will be some fantastic new rough coming soon. In the meantime, check out our current listings.

One interesting item is a very large corundum specimen weighing 195 carats. This stone is totally opaque and so cannot be regarded as gem quality but it has an excellent even blue colour throughout making it quite an attractive piece. Currently being auctioned and still at a bargain price – take a look at Item 5054335295 for more information.

The other interesting item are some sapphire cabochons we have just got back from the cutter. These are very nice and definitely something different. We have just picked out a few to start with in contrasting colours for your interest. One spectacular example of a parti sapphire showing striking zoning through the stone has been listed in the Cut Sapphire section of our store. It is always difficult to get good photos of cut gemstones and this one is no exception. However, the blue and yellow stripes across the body of the stone create a wonderful effect that must be seen to be truly appreciated – see Item 5056607826 for more information.

Regular visitors to our Ebay Store will have noticed a couple of new info boxes at the top of each category page. With the vast quantity of cut and rough gems being traded on Ebay (and elsewhere), it becomes difficult for the buyer to really know what they are buying. The only way to be really sure is to buy direct from the source – gems from our mine are always sold with a certificate of authenticity so you can be sure of getting the "real deal". While we do not intend to question the honesty of other traders, it is becoming an increasingly difficult task to buy quality gems at reasonable cost and certainly very difficult as a miner to compete with the flood of inferior and/or synthetic gems at giveaway prices. We touched on this in our last post "Ethical Purchasing of Gems" and will explore this issue further in a future article on this blog.

Cheers for now from Aussie Sapphire

NB: we welcome feedback on our blog and suggestions for future articles so please feel free to contribute. Thank you to all our customers who help to make Aussie Sapphire a success.

Ethical gemstone purchasing

Posted November 17, 2005 By AussieSapphire

We recently received an email from an American dealer which brought into sharp focus the difficulties faced by miners worldwide who have to negotiate with buyers who are only interested in the cheapest price with no consideration of ethical and environmental issues. His approach to trade negotation involved insulting our character and the quality of our product (sight unseen), quoting an amazingly low price he claims to have paid for unspecified sapphire rough from Africa and asking if we could match the price which was significantly below our cost of production. While we lose no sleep over not being able to do business with people like this, it did make us think about ethics in the gemstone industry and how the lack of it hurts everyone except these dealers who profit from paying too little and charging too much.

Here at Aussie Sapphire, we operate a commercial sapphire mine in Australia – a country with a high level of government regulation and very high running costs. In some ways, this puts us at a competitive disadvantage to producers from developing countries. However, we take pride in being able to offer a high quality product at comparable prices with sound ethical and environmental production methods. The following article provides some discussion of these issues and relevant links for those who are interested in ethical gemstone purchasing. One link I would like to focus on at this point is this excellent field trip report by Vincent Pardieu from the AIGS laboratory in Thailand – An update on Ruby and Sapphire mining in South East Asia and East Africa – some of the photos in this article come from this report (see acknowledgements).

Environmental protection
While mining obviously requires some temporary disruption to the local environment, it is possible to mine in such a way as land is protected and restored completely. In Australia, environmental protection is legislated by the government and enforced by periodic and thorough inspections – we are required to have zero impact on water quality in the nearby stream and must restore all mined land back to original or better condition. As we also farm this land, it is in our best interest to take care of it in any case. However, in many other countries, lack of government regulation or illicit mining activities result in significant environmental damage.

Mining in Tanzania. Photo: V Pardieu, 2005

River mining in Sri Lanka. Photo: V Pardieu, 2005

Our mine – topsoil is set aside and replaced after cut is filled in. Environmental impact is minimal and ground restored to full agricultural production. Mining within a water course is prohibited and all activities must not affect water quality or flow. Photo: Aussie Sapphire, 2004

Conditions for workers
Mining can be a dangerous occupation. However, our mining is restricted to surface level, open cut (single trench) mining only which is extremely safe. Our excavator drivers must be qualified to operate the machinery and there is strict regulation on Health and Safety in the workplace which must be followed at all times. While complying with all safety rules is costly, operating a safe mine is a priority at Aussie Sapphire with no shortcuts taken.

In contrast, mining in other countries can be extremely hazardous for those who must operate their mines at depth or in remote areas with little equipment. The use of child labour is another problem with many small-scale mines in developing countries – banned almost everywhere but difficult to eradicate as many families rely on the income brought in by these small children.

Wages for our staff are paid at prescribed rates with all included benefits including superannuation (retirement benefits) – no piece work rates or casual payments which are common in this industry in other countries but offer the worker no long-term security. All of our mining income is declared so all relevant taxes are paid.

Woman mining in Sri Lanka. Photo V Pardieu, 2005
Women and children work in many mines to help support family income – working conditions and pay rates vary greatly.

The Black Market and Illegal Activities
Gemstones of all varieties provide criminals and terrorists with an ideal method of transferring and laundering money because they’re high in value, hard to trace, very light and easy to move across borders. Sanctions against various countries have been imposed (eg. Liberia, Myanmar, etc) as a form of political protest – however, this fuels the black market trade and depresses prices everywhere as this illicit trades sets a price benchmark that legitimate operators find difficult to match.

Australia is a country with no political unrest (just some polite disagreement every now and then) and there are no economic sanctions imposed on gemstones or other products. The business environment is excellent with Australia being very safe for travelling, financial transactions and postage. Our terms and conditions at Aussie Sapphire should give you confidence to buy any of our products and we can provide references upon request. Negotiations are undertaken in the English language and payment is in AUD – a stable currency with favourable exchange rates to the US dollar. If you want low-risk buying, Australia is a good choice.

Another challenge for the buyer is to be sure that the gemstones are natural and accurately described. Synthetic gems have been mixed in with rough to boost profits in a number of mining areas and is a trap for the unwary buyer – the recent field trip report by Vincent Pardieu notes this in a number of regions – in Madagascar he states that “Foreign stones from other African countries and possibly other continents are probably mixed with local stones or sold as local gems. Tumbled synthetics are present in all mining areas as well as rough stones dyed with ink. Heated rough that did not react correctly to heat treatment are also present in the markets as well as stones locally heated at low temperatures”. When a gemstone is described as natural but is a bargain that seems too good to be true – a wise buyer would be very careful before parting with their money. However, buying from Aussie Sapphire presents no risk – satisfaction guaranteed or your money is refunded – the gems from our mine are direct from the ground. Where basic heat treatment is used, this is fully disclosed – we do not use any other form of gemstone enhancement (bulk diffusion, irradition, etc).

For those interested in learning more about these issues, here are just a few relevant links:

Child Labour:
Child Labour in small-scale mining (IPEC)
Article by Anthony LoBaido: Africa’s new bloodstained gems.

Conflict diamonds and other political issues
Wikipedia article on conflict diamonds
Myanmar:The Whispering Land – an article by Robert Weldon, G.G.
Article on diamond mining in Liberia – available at Gemscout.com

General issues – environmentalproblems, prevalence of synthetics, etc
Article on $250m-Trade in Tanzanite Hit By Fakes – available at Gemscout.com

A comprehensive collection of papers dealing with these issues was published from the Fourth CASM Annual General Meeting and Learning Event held at Colombo, Sri Lanka in 2004.

Again, Vincent Pardieu’s excellent report on mining in the region: An update on Ruby and Sapphire mining in South East Asia and East Africa

Obviously none of these problems will be solved overnight. Banning the use of child labour in gemstone mining and processing is a noble cause but without a holistic approach, it will inevitably cause real economic difficulty to the families who rely on the income brought in by family members. Without effective government regulation of the mining industry, there is no incentive to follow environmental or workplace safety best practice. The real problem lies with the dealers and ultimately retail buyers who insist on buying on price alone – this affects both industrialised miners who cannot compete with the low prices and miners in developing countries who accept the low prices but are being exploited in doing so. Nobody wins in this scenario – a fair price paid to all would do more to solve these problems than anything else.

So, if you are someone who wants to buy in an ethically sound manner, please consider supporting the Australian sapphire industry. Here at Aussie Sapphire, we can provide sapphires of world-class quality with the assurance that you are buying a product that has been mined in a responsible manner – our “mine to design” philosophy means you can wear any of our jewelry pieces with pride. Be impressed with the best and surprised by the price.

cheers for now from Aussie Sapphire