Rapaport Magazine
Colored Gemstone

Team Green

As “green” practices become ever more important in the colored gemstone world, U.K.-based Gemfields is emerging as a leader for its reliable and ethically produced Zambian emeralds.

By Brook Showell

Ana de Costa

More than just a mining company, Gemfields is showcasing active involvement in every aspect of the life of a colored gem, from excavation to the end user, leading the way in marketing, education and promotion of colored gemstones worldwide. Along with making a name for itself as a major gemstone producer, Gemfields is championing the fully transparent, environmentally and socially responsible Mine to Market strategy. 

   Founded in 2004, Gemfields achieved a major milestone with its 2009 acquisition of Zambia’s Kagem mine, a 500-million-year-old deposit previously owned and operated by the Government of Zambia. Twenty-five percent of the Kagem mine still is owned by the government of Zambia, on behalf of the people of Zambia.Gemfields’ Kariba amethyst mine, also in Zambia, and ruby mine in Mozambique have similar structures. “Each one of them we’ve done in partnership with the local people and communities, so it’s not just some foreigner that comes in and takes out all their assets,” explains Ian Harebottle, Gemfields’ chief operating officer (CEO), who took over the company’s
reins in February 2009.

   From Kagem, Gemfields now produces approximately 20 percent of the world’s emerald supply. The mine, in fact, is the world’s single largest operating emerald mine, producing between 2 million to 3 million carats of beryl as well as emerald, whose color ranges from rich saturated green to a vibrant green with slight bluish undertones. Kariba currently produces about 40 percent of the world’s amethyst. As for the ruby mine in Mozambique, the company is waiting for the country’s political climate to stabilize before making it
fully operational.

Growing from Emerald Base
   Gemfields reported $40 million revenue in fiscal 2011, which ended on June 30,
and said that revenue from rough and polished emerald sales rose 57 percent year on year to $45.7 million for the six months that ended on December 31, 2011, and net profit
rose 42 percent to $22 million. Admittedly, part of the reason for the company’s growth
is because it came off a rather low starting base and colored stones were
previously undervalued.

   “We’re reinvesting in marketing, communication, education, training, technology, environment, etc.,” Harebottle states. The company has spent $30 million on efforts to move waste and has invested heavily in plants, machinery and geology, not to mention bringing the Mozambique mine on board and going underground in Zambia. “I think that’s important that it’s not pure profit taking — it’s part of building the foundation and building the industry,” says Harebottle.
   In November 2012, the company came full circle with its Mine to Market strategy when it acquired the iconic jewelry firm Fabergé for $142 million, giving Gemfields a renowned jewelry brand to showcase the gems it mines.

Going Greener
   Focusing on beneficiation in its practices, which includes preserving the environment, nurturing relationships with local communities and upholding human rights, Gemfields is spreading the principle that green is good. “We realized of course that our emeralds were green, but we also realized increasingly that people had the word green on their lips: socially green, ethically green, environmentally green,” Harebottle explains. Putting green into practice, Gemfields planted 300,000 trees at Kagem’s old mine dumps and turned mine pits into lakes with a carbon neutral footprint, built schools and clinics in Zambia and set up organic farming with local villagers. The company’s outreach projects include working with organizations like the World Land Trust on nature conservation programs, with nongovernmental organizations (NGOs) for HIV/AIDs awareness and education and with British agricultural universities on farming developments.
   As “ethics” becomes an increasingly important buzzword in the mind of the consumer, Harebottle notes the advantages when ethical practices come to the jewelry consumer at no extra cost. “If you can show people two emeralds or two rubies of the same quality and the same price, and you can say to them, ‘One is questionable, and one we can guarantee its ethics,’ then, you’re able to get a much higher take on the ethical one,” he states. “People are talking about ethics, but they don’t want to pay a premium for it. But if you can give them ethics without a premium, it really works. Then people can have the product at good value, plus the feel-good factor comes as a freebie.”

Turning a Spotlight on Color
   In addition to its altruistic focus, Gemfields is actively promoting a love for color
among consumers. Though colored gemstones have been around forever, Harebottle
points out that diamonds have eclipsed color in recent decades, in large part because of diamonds’ highly successful marketing campaigns. “We’ve working now to remind people that there’s a place for color,” says Harebottle. He makes the analogy: “If De Beers is Microsoft, Gemfields is Apple. We’re much younger, much funkier, much sexier. There’s a place for both, and they’re both very important.”

   Fittingly, the promotional strategy involves partnerships with colored gemstone dealers and manufacturers. The company will help educate retailers on pricing structures, the differences in quality among various rubies, emeralds and sapphires and what makes
the Gemfields approach unique. Part of that dialogue, Harebottle explains, is teaching consumers to ask the right questions: “Where does it come from?” “How was it sourced?” “Are there any treatments?”

   Selling the glamour and intrigue of colored stones has been helped recently by Hollywood starlets wearing multihued jewels on the red carpet and flaunting colored
gem engagement rings, and even by conservative luxury goods markets like London, where a rainbow
of jewelry is being displayed in the windows of the high-end shops on famed Bond Street. Another notable partnership helping to create markets for colored gemstones is the company’s new affiliation with leading designers such as Cartier, Kimberly McDonald and Nam Cho, who will use Gemfields stones in their luxe designs. “I always say, ‘Gemfields is a mining company that markets.’ We mine and we sell our rough stones to a cutter, we help the cutter sell his stones to a manufacturer, we help the manufacturer sell to a retailer,” Harebottle states. “No matter where our gems are in that process, they are not sold, they are not finished, they haven’t found their home until they’re around the neck of a beautiful woman.”
   Beyond Gemfields’ success, building excitement over colored gems has the benefit of moving the entire industry forward, Harebottle explains. Rubies, sapphires and emeralds look loveliest when paired with diamonds in a dazzling setting that bring out each stone’s brilliance. This means that each Gemfields emerald that is sold to the consumer presents
an opportunity to also sell diamond accent stones. As the company’s CEO states, “Everybody in our industry benefits when colored stones are doing well.” 

Article from the Rapaport Magazine - January 2013. To subscribe click here.

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