A girl's new best friend?

AMERICAN ACTRESS HALLE BERRY SAID 'YES', but it wasn’t a diamond ring that French actor Olivier Martinez slipped onto her finger. The stone was a four-carat emerald estimated to cost over $100,000 (Rs 55.49 lakh). The green stone is not just a Hollywood fad; former Maharashtra chief minister Vilasrao Deshmukh, politician Bal Thackeray, UB Group’s chairman Vijay Mallya, Sahara India Pariwar head Subrata Roy Sahara, as well as Bollywood stars Amitabh Bachchan and Shah Rukh Khan, all wear emeralds. In Mumbai last year, actress Madhuri Dixit hosted a big-ticket emerald auction as a fundraiser to save elephants.

Gemfields, a British company that produces 25% of the world’s coloured gemstones annually (emeralds, rubies, sapphires, etc.) produced 33 million carats of rough emeralds last year. At an auction of high-quality emeralds in Jaipur this June, the company was paid close to $40 per carat, almost 10 times what it got in 2009 when it began auctions here. High demand has resulted in Gemfields holding nine auctions in India so far.

Globally, the demand for coloured gemstones has increased, pushing the prices of high-quality rough emeralds up almost 10 times in two years from Rs 230 per carat in 2009. That’s more than double the price rise for rough diamonds. According to the World Gold Council, high-quality rough emeralds have even outperformed gold in the last three years; emerald prices have gone up 770% compared to 82% for gold.

Part of the lure is rarity. The stones are 20 times more rare than diamonds because it’s difficult to find an emerald without flaws or inclusions (materials trapped within the stone). Fissures in a standard emerald can make cutting and setting difficult even for a skilled gem cutter. The yield or recovery on a rough emerald is just 25%—that’s 10% less than the yield on a diamond.

Because clear emeralds are so uncommon, (so much so that they are immediately suspected as fakes until validated) prices can go up to $35,000 for a relatively clean one-carat stone, while a one-carat diamond of good colour and few inclusions (high clarity) can go up to $30,000. Emeralds are low volume and high value, and have intrinsic artistic appeal. Also they are not as controversial as “blood diamonds”, mined at the cost of civil wars led by insurgents in Africa. Dev Shetty, group chief financial officer for Gemfields, says his company makes sure that the stones are “guaranteed to be conflict-free from the mine to the market”.

According to Bain Consulting’s research, global supply for rough diamonds this year is estimated at 140 million carats. The corresponding numbers for emeralds are not available, but Gemfields’ production averages between 20 million and 30 million carats a year. Part of the difficulty in sourcing accurate data is because of the increasing difficulty in finding enough commercial-grade emeralds in existing mines primarily in Colombia and Zimbabwe. This has led several mines cutting back operations or closing altogether.

Ruchi Durlabhji, partner, K.S. Durlabhji, a leading emerald retailer in Jaipur, says the demand is all from the East; she has even sold stones to New York-based dealers for their Indian clients.

In India, the fine jewellery market, including coloured gems, is valued at $160 billion, according to Bain Consulting; the company conducts an annual worldwide survey of luxury products, including precious and semi-precious stones. Industry reports indicate that the emerald market is valued between $6 billion and $7 billion.

Traditionally, emeralds in India are prized for their healing properties. Astrology also helps sales. “If you believe in that kind of thing, emeralds are meant to endow the wearer with power and wisdom,” says Pankaj Jagawat, chairman of Utssav CZ Gold Jewels, a jeweller. Which explains the stone’s popularity with politicians, film stars, and business people.

With the growing number of millionaires and high net worth individuals, as well as people following celebrity trends, demand for fine emeralds has further increased. Jewellery designer Viren Bhagat points to history, saying Indian royalty used coloured stones for centuries. But, he adds, today even the middle class is turning its sights on the green stone, which is noticeable at weddings as well as in daily wear.