Who is the Cardinal gainer of emerald business? Miner?Manufacturer/Trader?

As per Industry sources, emerald rough prices have doubled in last 2-3 years hence polished goods being manufactured from costly rough are difficult to sell in the market. Some manufacturers avoiding cutting and polishing because they apprehend that they would sustain loss therefore is better to rather trade the rough. Thus margin of the manufacturer is going down: and the profit they were earning diminishes. As a result the money which was flowing to cutting centres is going in the hands of the Miner.

Gold and diamond prices have already gone up, while exorbitant emerald prices are tough for the consumer. Consequently consumers buying colored-gemstone for fashion and investment has been the last option.

Major auctions, trading, manufacturing of emerald takes place in Jaipur. Due to competition and stock building by Jaipur’s emerald traders, miners are taking advantage. If the local trade does not wake up now, the time will come when it will be difficult to sell the goods and lot of inventory will pile up in the trade and the organized mining company will reap the benefit.

There is no doubt, that organized supply of goods does help the industry and give assurance of constant supply, but the trader buy Emerald rough in auction from the miners and faces unhealthy competition every time and they are paying 30 to 40% higher prices to get the goods while in stark contrast stand the DTC Sight-holder system where the diamond rough sales they give rough diamonds on reasonably market prices and their prices increase every year from 5 to 10 % only.

According to the sources, mining companies are even planning to streamline the mining and supply of Mozambique ruby, already its prices have gone up by 30% in the last two months, as traders are stocking Mozambique ruby in the market. As traders know now, that once organized mining players get into it, they will repeat same what they have done in emeralds, and prices will be pushed 2 to 3 folds in as many years.

Mining company Gemfields plc, mining company, listed in UK, has sold whooping USD 160.5 Million in total revenue in last 11 auctions since July 2009. More than 95% percent of the goods are bought directly or indirectly in Jaipur, which means, utilisation of foreign exchange of approx Rs 850 Crores. The stock prices of Gemfields, which was averaging GBP 20-24 till Feb, 2012 has almost doubled to GBP 40-45 in Oct/Nov, 2012.

As per company’s financial report submitted in Oct, 2012, revenues doubled to USD$ 83.7 million from USD$ 40.2 million. Profit before tax increased by 140% to US$47.8 million from US$ 19.9 million. Year- end cash pile improved by 169% to US$ 26.6 million from US$ 18.7 million. Operational mining cost is as low as US$ 1.34 m/month only.