Fine Red Ruby on a Beer Budget

RAPAPORT... When the ban on importing rubies from Burma took effect a year ago, many predicted that prices for fine rubies would skyrocket by 30 percent to 50 percent. But the weak economy intervened, reducing demand to the level of the limited supply available. As a result, prices for Burma rubies have, for the most part, remained stable for the past year. The market for lower- to medium-quality material has weakened a bit, but prices for fine stones at the top of the market have remained firm.

Supply and New Demand
The ban on Burma rubies has made an impact on the market in another significant way, however. It has increased demand for ruby from other countries and encouraged the development of new deposits, one of which, in Niassa, Mozambique, is offering nice ruby at an even nicer price.

Thanks to the Burma ban, the main source for fine-quality ruby imports is now Winza in Tanzania. Winza produces some stones of exceptional clarity, with a color similar in intensity to Burma stones, although not identical. What’s more, Winza produces a fair amount of ruby that does not require heating. These fine all-natural stones are still in demand, despite the economy. “If you have a special untreated Winza, there are always buyers for it,” says Benjamin Hakimi of Colorline in New York.

The new Mozambique ruby supply is similar to Winza’s. In the past, Mozambique was known only for low-grade ruby that was heavily treated, sometimes with lead glass. The new Mozambique ruby, which started hitting the Bangkok market in quantity in May 2009, has a much better quality than previously seen and some stones don’t require heating.

Niassa: The New Locality
In March 2009, the Gemological Institute of America’s (GIA) research laboratory in Thailand released a preliminary report on the new ruby, which it calls Niassa ruby, named after Niassa National Park in northern Mozambique, which is near the mining area. According to the GIA report, available at www.giathai.net, likeWinza rubies, the new Mozambique material contains iron, unlike the iron-poor ruby from marble-type deposits in Burma, Vietnam, Morogoro and Afghanistan. But the new ruby has less extinction than the iron-rich ruby from basalt deposits in Thailand. According to the report, Niassa ruby tends to be more included than Winza material and does not display the blue zones seen in Winza ruby.

GIA research gemologist Vincent Pardieu is currently in Mozambique, collecting samples that will provide data for GIA to issue origin reports for Niassa ruby. GRS Gemresearch Swisslab (GRS) and American Gemological Laboratories (AGL) are already issuing “Mozambique” origin reports on the material.

Mozambique and the Market
Niveet Nagpal of Omi Gems, Los Angeles, spent a lot of time sorting through large parcels of Mozambique ruby on a recent trip to Bangkok. “There are three kinds of ruby from Mozambique,” he explains. “There is heated material that looks similar to Burma. There is a decent amount of this material around but not enough to create parcels of calibrated stones. Most is lower-quality Lai Thai-type material. There are also unheated natural rubies: many smaller, average-color stones. I have seen some beautiful stones up to 4 to 5 carats. A few stones blew my mind. At first glance, I thought they were Burma.”

The prices of Mozambique ruby, however, are much lower than prices for similar Burma rubies. For a fine, unheated stone, for example, Burma might be double the price, Nagpal says. “A nicer, unheated Mozambique ruby that is $10,000 a carat would be around $20,000 to $25,000 a carat if it was a Burma ruby. The price difference could be even greater for larger, finer stones.”

This makes Mozambique ruby a good value, dealers say.  Better Mozambique material is cleaner than Burma, although the color is slightly different, and larger sizes are available.

“Mozambique produces bigger sizes, which is one of the advantages,” says Sam Sulimanov, MCR Gems, New York. “I sold a 10-carat stone from Mozambique. It wasn’t fine but it was a great value. You can find 8- to 10-carat stones for much less money. The color is similar to Thai rubies, but better. Generally, it’s not as clean, but there are always exceptions. You have to cherry-pick. Prices are still good. Every time you have a new mine, prices are low until people get familiar with it. It’s a good time to buy.”

“It’s fairly decent material,” agrees Hakimi. “You can find 4- to 5-carat stones that are not superexpensive and 7- to 8-carat stones that are good. It fills a void in the market. I have a 7.02-carat stone that is $4,000 a carat. I have to tell buyers that it is Mozambique; it isn’t Burma. If it were Burma, it would be $6,000 to $7,000 a carat.”

“It’s beautiful material and a good value. It’s still rare in fine quality but there is enough to make a market,” Nagpal says. “It’s brighter and more crystal than Burma but generally the color has a purplish undertone that reminds you of Thai ruby. Some stones rival Burma. They are rare but available.”

Although Mozambique has increased the supply of ruby to the marketplace, it can’t replace Burma as a supplier of high-quality calibrated stones.

“We do carry Mozambique, Tanzanian and Madagascar material and are even experimenting with heating old Siam material, but we have not found a substitute for Burma,” says Joe Orlando of Stuller, Lafayette, Louisiana. “There is no alternative source for 6 by 4 ovals that I can stock and put in the catalog.”

And Burma remains unrivalled at the top of the market as well. Rare fine gems are now rarer, thanks to the ban.

“Rubies are rare. That’s the dilemma of the ruby market now. You’ve taken away the biggest source,” says Jeffrey Bilgore of Jeffrey Bilgore, New York. “In these sorts of times, it will take longer to go through the inventory but prices are firm because you can’t replace it. I had an order for a pair of emerald cuts yesterday. I can’t fill it. Nice stones from anywhere but Burma are slim pickings.”

Article from the Rapaport Magazine - October 2009. To subscribe click here.