Diamond & Gems
Diamond & Gemstones - (Diamond, Ruby, Sapphire, Emerald etc.)
Uncut diamond, not showing the prized optical properties of cut and polished versions
The popularity of diamonds has risen since the 19th century because of successful advertising in spite of a greatly increased supply. Diamonds are not normally used as a mainline store of value during times of crisis, because of their lack of fungibility and low liquidity. However, they may still be useful during times of hyperinflation.
Approximately 30% of mined diamonds are used in jewelry and 70% for industrial uses (such as lasers, drill parts and surgical equipment). Chemical vapor deposition is now used to produce synthetic diamonds which, unlike diamond simulants, inherit all the properties of gemstones formed in nature.
The highest returns seen in the diamond investment market have come from Pinks, Yellows, Blues and Greens. Some "Fancy Colored Diamonds" have doubled in price in recent years and are continuing to rise based on the principles of supply and demand, as well as new economies entering the market. The Argyle Mine in Western Australia is the world's largest producer of colored diamonds and Rio Tinto (NYSE: RIO) have announced its closure in 2016-2018, which will have a huge impact on the world's supply of these rare diamonds.
Diamond Characteristics & Prices
A diamond (from the ancient Greek ἀδάμας - adámas, meaning "unbreakable," "proper," or "unalterable") is one of the best-known and most sought-after gemstones. Diamonds have been known to mankind and used as decorative items since ancient times; some of the earliest references can be traced to India. The hardness of diamond and its high dispersion of light - giving the diamond its characteristic "fire" - make it useful for industrial applications and desirable as jewelry.
Diamond rings have been used to symbolize engagements since at least the 15th century; however their popularity today can be traced directly to the marketing campaigns of De Beers, starting in 1938. Product placements, associations with celebrities and royalty, and slogans like "a diamond is forever" were needed to sell the large quantity of diamonds suddenly available because of the large diamond finds particularly in South Africa. Since then, rough diamond prices have been controlled by The De Beers Group, which has a 40% to 50% market share.
Botswana is currently the largest producer of diamonds by value, with mines operated by Debswana, a joint venture between De Beers and the government of Botswana. Since the 1980s, other producers have developed new mines in Russia (world's largest producer by carat value), Canada and Australia for example, challenging De Beers' dominance (historically De Beers' market share was considerably higher). De Beers through its trading company DTC raised wholesale diamond prices three times in 2004 by a total of 14%.
Polished diamond prices vary widely depending on a diamond's carat, color, clarity and cut (The 4 C's). In contrast to precious metals, there is no universal world price per gram for diamonds. The industry refers to price guides such as the Rapaport Diamond Report, The Diamond Registry Wholesale Diamond Price List, Ajediam Antwerp Diamonds Monthly and The Gem Guide, which are published weekly or quarterly. Numerous institutions have varying standards which can be used to aid in diamond identification and pricing. GIA, HRD and IGI are three such institutions. Often these organizations focus on new research and education which they pass on to their members and the public.
|Category||Flawless||Internally Flawless||Very Very Slightly Included||Very Slightly Included||Slightly Included||Included|
Most gem diamonds are traded on the wholesale market based on single values for each of the four Cs; for example knowing that a diamond is rated as 1.5 carats (300 mg), VS2 clarity, F color, excellent cut round brilliant, is enough to reasonably establish an expected price range. More detailed information from within each characteristic is used to determine actual market value for individual stones. Consumers who purchase individual diamonds are often advised to use the four Cs to pick the diamond that is "right" for them.
Inclusions and Blemishes refer to the flaws found within diamonds, both natural and man-made. These flaws can also affect the dispersion of white light into spectral colors, which is the primary gemological characteristic of gem diamonds. There are particular names for each, and knowing these can assist tremendously in the quest for the attainment of the ideal diamond for the buyer.
The geologic definition of inclusion is any foreign object, be it solid, liquid or gas, trapped within a rock or mineral. In the case of diamonds, this includes any kind of damage to the crystalline structure occurring within the diamond. This is the far more important category to be familiar with, as inclusions are the most difficult flaws to be overlooked or corrected. Inclusions can greatly affect the transmission of light within and through the diamond, depending on the size (as measured in microns) and placement of the particular inclusion or inclusions. It is important to remember, however, that all natural diamonds have inclusions, and that the only inclusions that professionals are concerned with are those seen at 10x magnification or less, as well as inclusions that threaten the stability of the stone.
Common Inclusions: Feathers, Pinpoints, Carbons, Clouds, Twinning Wisps or Intergrowth, Needles.
Uncommon Inclusions: Knots, Internal Graining, Laser Lines, Bearding or Girdle Fringing, Cleavage, Cavities, Included Crystals or Minerals.
Examples of Blemishes: Polish Lines, Grain Boundaries, Naturals, Scratches, Nicks, Pits, Chips, Breaks.
Other characteristics also influence the value and appearance of a gem diamond. These include physical characteristics such as the presence of fluorescence as well as the diamond's source and which gemological institute evaluated the diamond. Cleanliness also dramatically affects a diamond's beauty.
Global Diamond Sales
The United States accounts for 35% of diamond sales, Hong Kong 26%, Belgium 15%, Japan 6%, and Israel 4%. Israel and Belgium are significant diamond-trading hubs thus their consumption numbers are misleading. Most diamonds are sold through retail stores at very high profit margins. The estimates on markups are broad, but retail jewelers typically mark-up diamond wedding rings by an average of 300%, with some up to 1000%.
Approximately 130,000,000 carats (26,000 kg) of diamonds are mined annually, with a total value of nearly US$9 billion, and about 100,000 kg (220,000 lb) are synthesized annually. Of this, mined gem production totals nearly 30 million carats (6 tonnes) of cut and polished stones annually, with the other 100 million carats (20 tonnes) of mined diamonds sold for industrial use each year, as are the 100 tonnes of synthesized diamond.
Today, 92% of the world's diamonds are cut and polished in India, mostly in the city of Surat. Some 85% of the world's rough diamonds, 50% of cut diamonds, and 40% of industrial diamonds are traded in Antwerp, Belgium - the diamond center of the world. Antwerp's association with diamonds began in the late 15th century when a new technique to polish and shape the gems evolved in this city. The diamond cutters of Antwerp are world renowned for their skill. More than 12,000 expert cutters and polishers are at work in the Diamond District, at 380 workshops, serving 1,500 firms and 3,500 brokers and merchants. Other important centers of diamond cutting and trading are London, the Diamond District in New York City, Tel Aviv, and Amsterdam.
Most natural diamonds are formed at high temperature and pressure at depths of 140 to 190 kilometers (87 to 120 mi) in the Earth mantle. Carbon-containing minerals provide the carbon source, and the growth occurs over periods from 1 billion to 3.3 billion years (25% to 75% of the age of the Earth). Diamonds are brought close to the Earth surface through volcanic pipes made by deep volcanic eruptions of magma, which cools into igneous rocks known as kimberlites and lamproites. Not all volcanic pipes contain diamonds, and even fewer contain enough diamonds to make mining economically viable.
Many deep-formed rocks (xenoliths) contain surface rock and even wood and fossils are found in volcanic pipes. These rocks are characteristically rich in magnesium-bearing olivine, pyroxene, and amphibole minerals which are often altered to serpentine by heat and fluids during and after eruption. Certain indicator minerals typically occur within diamantiferous kimberlites and are used as mineralogical tracers by prospectors, who follow the indicator trail back to the volcanic pipe which may contain diamonds.
These minerals are rich in chromium (Cr) or titanium (Ti), elements which impart bright colors to the minerals. The most common indicator minerals are chromium garnets (usually bright red chromium-pyrope, and occasionally green ugrandite-series garnets), eclogitic garnets, orange titanium-pyrope, red high-chromium spinels, dark chromite, bright green chromium-diopside, glassy green olivine, black picroilmenite, and magnetite. Kimberlite deposits are known as blue ground for the deeper serpentinized part of the deposits, or as yellow groundfor the near surface smectite clay and carbonate weathered and oxidized portion.
Once diamonds have been transported to the surface by magma in a volcanic pipe, they may erode out and be distributed over a large area. A volcanic pipe containing diamonds is known as a primary source of diamonds. Secondary sources of diamonds include all areas where a significant number of diamonds have been eroded out of their kimberlite or lamproite matrix, and accumulated because of water or wind action. These include alluvial deposits and deposits along existing and ancient shorelines, where loose diamonds tend to accumulate because of their size and density. Diamonds have also rarely been found in deposits left behind by glaciers (notably in Wisconsin and Indiana); in contrast to alluvial deposits, glacial deposits are minor and are therefore not viable commercial sources of diamond.
by Chemical Vapor Deposition (CVD)
Diamonds can also be produced synthetically in a high-pressure high-temperature process which approximately simulates the conditions in the Earth's mantle. An alternative, and completely different growth technique is Chemical Vapor Deposition (CVD). Several non-diamond materials, which include cubic zirconia and silicon carbide and are often called diamond simulants, resemble diamond in appearance and many properties. Special gemological techniques have been developed to distinguish natural and synthetic diamonds and diamond simulants.
Primitive interstellar meteorites were found to contain carbon possibly in the form of diamond (Lewis et al. 1987). Not all diamonds found on Earth originated here. A type of diamond called carbonado that is found in South America and Africa may have been deposited there via an asteroid impact (not formed from the impact) about 3 billion years ago. These so-called Space Diamonds may have formed in the intrastellar environment, but as of 2008, there was no scientific consensus on how carbonado diamonds originated.
Diamonds can also form under other naturally occurring high-pressure conditions. Very small diamonds of micrometer and nanometer sizes, known as microdiamonds or nanodiamonds respectively, have been found in meteorite impact craters. Such impact events create shock zones of high pressure and temperature suitable for diamond formation. Impact-type microdiamonds can be used as an indicator of ancient impact craters.
Scientific evidence indicates that white dwarf stars have a core of crystallized carbon and oxygen nuclei. The largest of these found in the universe so far, BPM 37093, is located 50 light-years (4.7×1014km) away in the constellation Centaurus. A news release from the Harvard-Smithsonian Center for Astrophysics described the 2,500-mile (4,000 km)-wide stellar core as a diamond. It was referred to as Lucy, after the Beatles' song "Lucy in the Sky With Diamonds".
Diamond Investment Features
Diamond has remarkable optical characteristics. Because of its extremely rigid lattice, it can be contaminated by very few types of impurities, such as boron and nitrogen. Combined with wide transparency, this results in the clear, colorless appearance of most natural diamonds. Small amounts of defects or impurities (about one per million of lattice atoms) color diamond blue (boron), yellow (nitrogen), brown (lattice defects), green (radiation exposure), purple, pink, orange or red. Diamond also has relatively high optical dispersion (ability to disperse light of different colors), which results in its characteristic luster. Excellent optical and mechanical properties, combined with efficient marketing, make diamond the most popular gemstone investment.
Synthetic diamonds of various colors grown by
the high-pressure high-temperature technique.
Gem-cut synthetic silicon carbide set in a ring.
Polished and rough diamonds lack some of the desirable attributes of investment vehicles, including liquidity, homogeneity and fungibility. There is also no natural shortage of diamonds, as they can be synthesized at a much lower cost than the equivalent natural diamond price. The chemical and structural purity of a synthetic diamond can exceed a natural one; however, the chemical composition is not the only factor that determines their value - the quality of the cut is of as much, if not greater, importance.
The increasing quality and size, and decreasing price, of synthetic diamonds is presented as a threat to the value of polished diamonds as a long-term investment, but has never impacted real investment-grade diamond prices. The possibility of low-cost ultra-high-quality diamonds becoming available in industrial quantities at some time in the future has never been a hindrance for long-term investors in diamonds; synthetic diamonds have been manufactured since the 1950s and have yet to make a major impact on the market.
An alternative example of such a price fall caused by introduction of a new simulant strongly undermining prices was the permanent fall in natural pearl prices with the introduction of cultured pearls. The mechanism by which prices were affected was complex. In part because of the social acceptability of wearing cultured pearls to much of the market, customers migrated from the natural to the lower priced cultured product. This altered the supply and demand situation for natural pearls and perhaps the overall prestige of pearls in general was lowered.
In cases where synthetic stones have been much less socially acceptable to the market as a replacement for the natural version, the prestige of the natural stones has been retained. Thus increased availability and lowered prices of synthetics may or may not have major implications for the future price of natural diamonds. In addition, the introduction of synthetic rubies in the late 19th Century did not appear to have a permanent effect on the price of natural rubies.
Diamond Terminal Market Needed
There are several factors contributing to low liquidity of diamonds, with one of the main reasons being the lack of a terminal market. Most commodities have terminal markets, and some form of commodities exchange, clearing house, and central storage facilities. Until recently this did not exist for diamonds. Diamonds are also subject to capital gains taxes in many countries, and to value added tax in the UK, EU, and sales tax in most developed countries, therefore reducing their effectiveness as an investment medium. In the near future all rough diamonds mined in South Africa will be subject to a 7% royalty.
As diamonds in larger sizes become increasingly rare and valuable, any easily visible and readily understood pricing system has been difficult to establish. Martin Rapaport produces the Rapaport Diamond Report, which lists prices for polished diamonds; it is relatively expensive to subscribe to, and as such is not readily available to consumers and investors. Each week, there are matrices of diamond prices for round brilliant cut diamonds, by colour and clarity within size bands, and also other shapes. The price matrix for brilliant cuts alone exceeds 1,400 entries, and even this is achieved only by grouping some grades together. There are considerable price shifts near the edges of the size bands, so a 0.49 carats (98 mg) stone may list at $5,500 per carat = $2,695, while a 0.50 carats (100 mg) stone of similar quality lists at $7,500 per carat = $3,750. This may appear such a large difference as to defy logic, but in reality stones near the top of a size band (or rarer fancy coloured varieties) tend to be uprated slightly. Some of the price jumps are related to marketing and consumer expectations. For example, a buyer expecting a 1 carat (200 mg) diamond solitaire engagement ring may be unprepared to accept a 0.99 carats (198 mg) diamond.
There are numerous diamond grading laboratories, with each offering investors, consumers and dealers similar diamond-grading and verification services. The standards are high, and when they ever slip, immediate ramifications are felt throughout the diamond industry. When the market-leading Gemological Institute of America (GIA) saw a number of large, important and valuable diamonds overgraded some time ago, this resulted in legal action by one dealer against another dealer who had submitted them to the GIA for grading. A number of GIA employees left after the scandal emerged, and the GIA immediately changed a number of its procedures to prevent such occurrences from happening again. There are also a number of laboratories affiliated to CIBJO (Confédération Internationale de la Bijouterie, Joaillerie et Orfèvrerie, also known as the World Jewellery Confederation).
The non-linear, exponential pricing of different sizes (weights) of diamonds means that it is not realistic to exchange, for example, 2 quarter carats (50 mg) for 1 half carat (100 mg). With commodities such as gold, it is clear that 1 twenty gram bar is worth the same as 2 ten gram bars, assuming the same quality. In most terminal markets, there needs to be a readily available standard quality, or limited number of qualities, available in sufficient quantity to be tradable. This is a major factor which affects liquidity. The large number of variables in diamond quality makes commodity-like pricing difficult, especially with rarer stones that merit special handling above standard-issue diamonds.
There are also fashion and marketing elements to take into consideration. De Beers expends marketing efforts to encourage sales of diamond sizes and qualities which are being produced in relatively large quantities. They have also been known to take steps to discourage investment, primarily because they perceive that bubble prices which are followed by sharp falls are bad for long term consumer confidence in diamonds as a long-term store of value.
The investment parameter of diamonds is their high value per unit weight, which makes them easy to store and transport. A high quality diamond weighing as little as 2 or 3 grams could be worth as much as 100 kilos of gold. This extremely condensed value and portability does bestow diamonds as a form of emergency funding. People and populations displaced by war or extreme upheaval have utilised this portable asset successfully. In 2009 an exchange was launched by DODAQ to trade categories of polished diamonds. The DODAQ exchange is intended to be a terminal market for round polished certified diamonds (the most liquid part of the market) and hosts its centralised storage facility in a Freezone. The exchange is an attempt to overcome the traditional investment barriers of sales tax and low liquidity on the resale market.
The diamond's high value has also been the driving force behind dictators and revolutionary entities, especially in Africa, using slave and child labor to mine diamonds to fund conflicts. Public outrage and humanitarian efforts are starting to affect consumer demand to avoid these so-called "blood diamonds". The Canadian Government has set up a body known as "Canadian Diamond Code of Conduct" to help authenticate Canadian diamonds. This is a very stringent tracking system of diamonds and helps protect the "Conflict Free" label of Canadian diamonds.
Diamond Mining Companies
Major Diamond Producers
The largest diamond company in the world is the Russian Federation Joint Stock Company Alrosa, which surpassed De Beers in carat production in 2008. Alrosa is currently government owned, so is not listed on the stock market. De Beers is privately owned by Anglo American (85%) and the Botswana government (15%), so its shares are not directly traded on the stock market. However, the Oppenheimer family recently sold their 40% stake in De Beers to Anglo American (OTC: AAUKY) in 2011.
Rio Tinto (NYSE: RIO) and BHP Billiton (NYSE: BHP) are the next largest producers, but diamond mining is only a small part of their commodity portfolio. BHP is the largest mining company in the world.
Other Large Diamond Producers
Petra Diamonds (LSE: PDL) is the second largest diamond producer in Africa with 7 of the world's 24 most productive mines, including the famed Cullinan Diamond Mine (known for its very large and blue diamonds), with operations in South Africa, Tanzania, and Botswana. Gem Diamonds (LSE: GEMD) produces some of the world's highest quality diamonds from the Letseng mine in the Kingdom of Lesotho, Ellendale mine in Australia, and Ghaghoo mine in Botswana (production expected in 2013). Harry Winston Diamond (TSX: HW)(NYSE: HWD), formerly called Aber Diamond Corp., is a Canadian diamond producer that also retails its diamonds through the company's chain of jewelry stores. Rockwell Diamonds (TSX: RDI) is an example of a small-cap established producer of South African alluvial diamonds.
Diamond Exploration & Development Companies - with areas of focus and project names
Paragon Diamonds (LSE: PRG) Diamond projects in Sub-Saharan Africa, in Lesotho and Zambia, Botswana, Sierra Leone, and Tanzania.
Firestone Diamonds (LSE: FDI) Africa: Lesotho Liqhobong Mine; Botswana BK11 Mine, plus 43 diamondiferous out of 174 kimberlites.
Mwana Africa (LSE: MWA) Africa: Mines gold, nickel, base metals. South Africa Klipspringer diamond mine, plus DRC, Angola, and Botswana.
Namibian Resources (LSE: NBR) Africa: Sperrgebiet alluvial diamond mining concession for NAMDEB, in the Luderitz district of Namibia.
Stellar Diamonds (LSE: STEL) West Africa: Sierra Leone Kono & Tongo; Guinea Droujba & Bouro pipes, plus Mandala alluvial diamonds.
Cape Resources (LSE: CAPE) Elandslaagte diamond mine in South Africa; plus coal and other projects in Africa.
Namakwa Diamonds (LSE: NAD) South Africa: Kao kimberlite mine in Lesotho; NW Province alluvial diamonds; Namibia marine; delisting.
Lucara Diamond (TSX: LUC) Africa: Karowe diamond mine in Botswana; Mothae project in Lesotho.
Diamond Fields Intl. (TSX: DFI) Namibian marine & West Africa diamonds (plus gold), Atlantis II Red Sea poly-metallic, Madagascar nickel.
Diamcore Mining (TSXV: DMI) South Africa Krone-Endora (near De Beers flagship Venetia Mine), long-term alliance with Tiffany & Co.
African Queen Mines (TSXV: AQ) Botswana and Namibia diamonds; Mozambique, Ghana and Kenya gold and other metals.
Metalex Ventures (TSXV: MTX) James Bay "Ring of Fire", Attawapiskat, Kyle Lake, Ontario & Quebec Canada. Angola, Mali & Morocco Africa.
Delrand Resources (TSX: DRN) Tshikapa kimberlite plus iron, Kasai-Occidental Province in the Democratic Republic of Congo, Africa.
Tsodilo Resources (TSXV: TSD) Newdico and Gcwihaba diamonds and base-precious-REE metals projects in northwest Botswana, Africa.
Gem Intl. Resources (TSXV: GI) Tanzania Africa: Maganzo & Kolandoto diamonds in Shinyanga region; Handeni & Bagamoyo gold projects.
Afri-Can Marine Minerals (TSXV: AFA) Targets large marine diamond deposits in unexplored areas of Namibia, Africa.
Mountain Province Diamonds (TSX: MPV)(AMEX: MDM) Developing world's largest & richest new diamond mine with De Beers in NWT.
Stornoway Diamond (TSX: SWY) Developing Quebec's first diamond mine, the Renard Diamond Project near the Otish Mountains.
Shore Gold Inc. (TSX: SGF) Developing the Star kimberlite and others in the Fort à la Corne forest in central Saskatchewan Canada.
Peregrine Diamonds (TSX: PGD) Diamond projects in the Northwest Territories, Baffin Island in Nunavut and Manitoba.
Archon Minerals (TSXV: ACS) Diamond projects in the Northwest Territories of Canada.
Olivut Resources (TSXV: OLV) HOAM project in Canada's Northwest Territories; Itapoty project in central Paraguay, South America.
New Nadina Explorations (TSXV: NNA) Monument diamond in Lac de Gras NWT; Owen Lake BC Silver Queen copper-moly-gold porphyry.
Shear Diamonds (TSXV: SRM) Diamond projects in Canada's North, including the Jericho diamond mine in the Kitikmeot region of Nunavut.
Diamonds North (TSXV: DDN) Amaruk diamond project in Pelly Bay Nunavut Canada, plus copper-silver and Washington State gold.
Diadem Resources (TSXV: DRL) Diamond targets in the Franklin Bay, Parry Peninsula area of the NWT Canada, plus gold projects.
Williams Creek Gold (TSXV: WCX) Barkerville and other gold projects in BC, NWT Canada and Nevada USA; ATW diamonds MacKenzie NWT.
GGL Resources (TSXV: GGL) Canada diamonds (Ch, Doyle & Fishback Lakes) and gold, nickel, VMS in the NWT; gold and copper in B.C.
Canterra Minerals (TSXV: CTM) Canada diamonds, base metal and uranium in the NWT, Nunavut, Alberta, Saskatchewan and Ontario.
Grizzly Discoveries (TSXV: GZD) Canada: Alberta potash; B.C. gold & base metals; Alberta Buffalo Head Hills & Birch Mountains kimberlites.
Star Uranium (TSXV: SUV) Uranium, base metals, oil & gas in Canada. Sask. Fort à la Corne and Peace River Alberta diamond JVs with V.UUC.
United Uranium (TSXV: UUC) Uranium and base metals in Canada. Sask. Fort à la Corne and Peace River Alberta diamond JVs with V.SUV.
Batla Minerals (PARIS: MLBAT) French contract miner of diamonds in Lesotho, South Africa, and the DRC, for De Beers, Gem Diamonds etc.
Venus Metals (ASX: VMC) Australia: Argyle Smoke Creek alluvial diamond resource; Yalgoo iron ore resource; plus gold, PGE & base metals. North Australian Diamonds (ASX: NAD) Australia: flagship Merlin deposit, plus Kimberley, Arnhem Land, and other diamond projects. Blina Minerals (ASX: BDI) Alluvial diamond tenements Kimberley Western Australia. Sourcing new base & precious metals projects. Torian Resources (ASX: CFR) Australia: Copeton & Bingara diamonds (+ tin) in NSW, gold near Ballarat Victoria; Varun Madagascar gold JV. Rimfire Pacific Mining (ASX: RIM) Australia: Sorpresa greenfields gold discovery, Fifield district, and Bingara Copeton diamonds in NSW. Llonrho Mining (ASX: LOM) Lulo alluvial diamonds, Cuango River, with Endiama the national diamond company of Angola, Africa.
Gemstone Focused Junior Miners
Search to discover hundreds of small-cap diamond, resource & non-resource stocks, at InvestorsGuru.com's Small Cap Directory.
Today there are a few funds that are investing in diamonds. These funds purchase unique diamonds (very large in size or color); each stone is checked by a few professionals and negotiated until the fund decides to purchase it. Then a marketing team goes into action and through an extensive work the fund yield is gained. Between 2007 and 2008 the price of a diamond from the top range of color, clarity, cut and carat went up by over 50%.
In 2008 Diapason Commodities Management listed an investment company called Diamond Circle Capital (LSE: DIAM), which aims to invest in rare colored and colorless diamonds worth more than $1m each. This closed-end fund now trades on the London Stock Exchange. Business publications have been reporting that various precious gems investment funds and diamond ETF's have been filed for exchange approvals, or have been proposed recently, by companies such as The Rapaport Group, ETF Securities, IndexIQ, and others.
Gemstone Characteristics & Classification
Group of precious and semiprecious stones -
both uncut and faceted - including (clockwise
from top left) diamond, uncut sapphire, ruby,
uncut emerald, and uncut amethyst.
A gemstone or gem (also called a precious or semi-precious stone, a fine gem, or jewel) is a piece of mineral, which, in cut and polished form, is used to make jewelry or other adornments. However certain rocks (such as lapis lazuli) and organic materials (such as amber or jet, and to some pearl) are not minerals, but are still used for jewelry, and are therefore often considered to be gemstones as well.
Most gemstones are hard, but some soft minerals are used in jewelry because of their luster or other physical properties that have aesthetic value. Rarity is another characteristic that lends value to a gemstone. Apart from jewelry, from earliest antiquity until the 19th century engraved gems and hardstone carvings such as cups were major luxury art forms; the carvings of Carl Fabergé were the last significant works in this tradition.
The traditional classification in the West, which goes back to the Ancient Greeks, begins with a distinction between precious and semi-precious stones. In modern usage the precious gemstones are diamond, ruby, sapphire and emerald, with all other gemstones being semi-precious. This distinction reflects the rarity of the respective stones in ancient times, as well as their quality: all are translucent with fine color in their purest forms, except for the colorless diamond, and very hard, with hardnesses of (8-10) on the Mohs scale. Other stones are classified by their color, translucency and hardness.
Examples of semi-precious gemstones include: Alexandrites, Aquamarines, Opals, Pearl, Spinels, and Topaz.
A selection of gemstone pebbles made by
tumbling rough rock with abrasive grit, in a
rotating drum. The biggest pebble here is
40 mm long (1.6 inches).
The traditional distinction does not necessarily reflect modern values, for example, while garnets are relatively inexpensive, a green garnet called Tsavorite, can be far more valuable than a mid-quality emerald. Another unscientific term for semi-precious gemstones used in art history and archaeology is hardstone. Use of the terms 'precious' and 'semi-precious' in a commercial context is, arguably, misleading in that it deceptively implies certain stones are intrinsically more valuable than others, which is not the case.
In modern times gemstones are identified by gemologists, who describe gems and their characteristics using technical terminology specific to the field of gemology. The first characteristic a gemologist uses to identify a gemstone is its chemical composition. For example, diamonds are made of carbon (C) and rubies of aluminium oxide (Al2O3). Next, many gems are crystals which are classified by their crystal system such as cubic or trigonal or monoclinic. Another term used is habit, the form the gem is usually found in. For example diamonds, which have a cubic crystal system, are often found as octahedrons.
Gemstones are classified into different groups, species, and varieties. For example, ruby is the red variety of the species corundum, while any other color of corundum is considered sapphire. Emerald (green), aquamarine (blue), red beryl (red), goshenite (colorless), heliodor (yellow), and morganite (pink) are all varieties of the mineral species beryl.
Enamelled gold, amethyst and pearl pendant,
about 1880, Pasquale Novissimo (1844-1914),
V&A Museum number M.36-1928.
Gems are characterized in terms of refractive index, dispersion, specific gravity, hardness, cleavage, fracture, and luster. They may exhibit pleochroism or double refraction. They may have luminescence and a distinctive absorption spectrum. Material or flaws within a stone may be present as inclusions.
Gemstones may also be classified in terms of their "water". This is a recognized grading of the gem's luster and/or transparency and/or "brilliance". Very transparent gems are considered "first water", while "second" or "third water" gems are those of a lesser transparency.
Whether a gemstone is a natural stone or a lab-created (synthetic) stone, the characteristics of each are the same. Lab-created stones tend to have a more vivid color to them, as impurities are not present in a lab and do not modify the clarity or color of the stone.
There is no universally accepted grading system for gemstones. To a large extent a gems value is truly in the eye of the beholder, as historically all gemstones were graded using the naked eye. As described above for grading diamonds, today gems are also graded by the GIA system using the "four Cs", at 10x magnification for grading clarity.
In diamonds, cut is the primary determinant of value, followed by clarity and color. Diamonds are meant to sparkle, to break down light into its constituent rainbow colors (dispersion), chop it up into bright little pieces (scintillation), and deliver it to the eye (brilliance). In its rough crystalline form, a diamond will do none of these things; it requires proper fashioning and this is called "cut". In gemstones that have color, including colored diamonds, it is the purity and beauty of that color that is the primary determinant of quality.
Gem prices can fluctuate heavily (such as those of tanzanite over the years) or can be quite stable (such as those of diamonds). In general per carat prices of larger stones are higher than those of smaller stones, but popularity of certain sizes of stone can affect prices. Typically prices can range from 1USD/carat for a normal amethyst to US$20,000-50,000 for a collector's three carat pigeon-blood almost "perfect" ruby.
Rare or unusual gemstones, generally meant to include those gemstones which occur so infrequently in gem quality that they are scarcely known except to connoisseurs, include andalusite, axinite, cassiterite, clinohumite and red beryl.
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