The 206-Carat ‘Imperial Emerald’ Unveiled at Baselworld

Photo credit: Anthony DeMarco

Luxury jewelry firm, Bayco Jewels, unveiled a 206-carat natural Colombian emerald named the “Imperial Emerald” in its showroom Thursday during the opening day of Baselworld 2013.

Owners of the company, Moris and Giacomo Hadjibay, said it is “one of the most precious gemstones to ever exist.” The brothers say that it was purchased from a private collector who owned it for 40 years. They refuse to reveal the price of the gem.

“We paid with our hearts,” a visibly emotional Moris said. In addition, its provenance is unknown. 

Giacomo Hadjibay with the Imperial Emerald. Photo credit Anthony DeMarco

The brothers say the purchase is a tribute to their father, Amir, an Iranian native who moved to Italy in 1957 and founded Bayco not long afterward. The company specializes in one-of-a-kind jewelry pieces made with exceptional gemstones. Amir, knew the previous owner of the gem and told the owner long ago that he would buy it whenever he was ready to sell.

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Pressure From Zambia Forces Gemfields to Reschedule Emerald Auction

A Gemfields advertisement for its Kagem emeralds from a recent marketing campaign.

Gemfields has rescheduled its auction of emeralds from the Kagem mine in Zambia due to Zambian officials’ insistence that the company hold its auctions within the country’s borders.

The London-based colored gemstone exploration, mining and marketing company planned to auction higher grade rough emeralds in Singapore from June 10-14, but a change of policy on the part of the Zambian authorities caused the company to postpone the sale, it said through the Proactive Investors website on July 1. The auction will now take place July 15-19 in Lusaka, the capital city of Zambia.

The date change will affect Gemfields financial reporting for the fiscal year, which ended June 30. The delay means the company only completed two auctions during the fiscal year that generated $42 million in revenue, compared with four auctions held during the prior fiscal year that generated $77.9 million.

The directive was issued in April in the form of a written request by the Zambian Ministry of Mines, Energy and Water Development. Despite ongoing discussions, the country’s position apparently hasn’t changed. Even though Gemfields said Zambian officials have insisted there is no ban on overseas auctions.

The government of the Republic of Zambia owns 25 percent of the Kagem mine while Gemfields owns the remaining 75 percent. In addition, the two parties own a 50-50 stake in the Kariba amethyst mine, which will also be affected by the outside selling ban. However, nearly all of Gemfields income comes from the Kagem mine.

What’s at issue is the government’s belief that it isn’t receiving enough of the economic benefits from the mine.

“Zambian gemstones have for a long time been sold on foreign markets, a situation that has contributed to capital flight and denied Zambians of the much needed benefits from the resource,” Yamfwa Mukanga, Zambia mining minister, said in its written request issued in April.

For its part, Gemfields insists that it needs to sell Kagem emeralds at places that will likely get the most interest and the best price in order to compete with other emerald hubs, such as Colombia and Brazil.

Since 2007, Gemfields has been creating a mine-to-market initiative for its emeralds using the Kagem mine as a single, traceable source for its emeralds. In addition, it is working on a program to mine its emeralds in adherence to fair-trade practices and in accordance with environmental, social and safety standards. The distribution of its emeralds includes the Faberge luxury jewelry brand, which it owns. 

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Gemfields Kagem Emerald Mine Showed Solid Annual Growth Despite Conflict With Zambian Government

Coomi 20K yellow gold with Gemfields’ Zambian emeralds, 120.34 carats and diamonds, 5.21 carats.

Production at the Gemfields Kagem emerald mine in Zambia increased 42 percent to 29.99 million carats for the 12-month period ended in June.

The average grade for the year increased 38 percent to 283 carats per ton, the company said Monday through the Proactive Investors website. Meanwhile, production costs fell 26 percent in the year.

Gemfields is a colored gemstone exploration, mining and marketing company. The Kagem mine is the London-listed company’s biggest asset and it provides nearly all of its revenue, even though it has interest in other colored gemstone mines. It owns a 75-percent share of the Kagem mine with the Zambian government owning the remaining 25 percent.

One of Gemfields other mines is the Montepuez ruby deposit in Mozambique. The company said it is on track to hold its first auction of rough rubies in the first quarter of 2014.

Gemfields also owns Fabergé, which it fully acquired in January. The company said the luxury jewelry brand achieved a record number of unit sales for the year.

A sale of lower quality emeralds in April netted $15.2 million, Gemfields said. Not included in the annual results was its latest auction of higher quality emeralds, held in the Zambian capital of Lusaka. This brought in revenues of $31.5 million, the second highest total ever for an auction of its kind.

The auction was originally scheduled in June in Singapore but pressure from the Zambian government to move the auction to Zambia caused the auction to be postponed until July, after the reporting period. Where to hold auctions has been a source of debate since April when the government of Zambia, Gemfields business partner, issued a directive for Gemfields to hold its auction within the country’s borders, citing capital flight.

Ian Harebottle, Gemfields CEO, said through Proactive Investors that communication between the two parties is now “much, much better” and more interactive.

However, Harebottle said the company continues “to seek guidance and to interact with the Government of Zambia.” Gemfields argues that it needs to sell Kagem emeralds at places that will likely get the most interest and the best price.

“While the two auctions held in Lusaka this year have certainly been successful, the key question, of course, remains what they would have generated had they been held abroad (where competing and undermining sources of supply, frequently illegal, are not readily available to our customers) and their potential impact on the long term growth of this sector,” he said.

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Gemfields Emerald Auction in Zambia Raises $31.5 Million

Gemfields spokesperson Mila Kunis.

Maybe holding emerald auctions in Zambia isn’t such a bad idea. The ongoing tug of war between the Zambian government and colored gemstone mining and marketing company, Gemfields, over where to sell Zambian emeralds hasn’t dampened demand.

Gemfields’ most recent auction of higher quality rough emerald and beryl from the Kagem mine in Zambia resulted in revenues of $31.5 million, the second highest total to date for the company. The average price per carat reached $54, the highest unit value achieved at any auction and a 26 percent increase over the previous highest value achieved in July 2011. In addition, a 54-carat rough gem, offered as a single lot, set a new per carat record for prices achieved at a Gemfields auction.

A total of 40 companies were invited to the auction held July 15 - 19 in the Zambian capital city of Lusaka and 37 attended, with 36 attendees placing at least one bid, Gemfields said in a statement Tuesday. A total of 583,448 carats of emerald extracted from Kagem was placed on offer, with all lots being sold. The auction format is how Gemfields chooses to sell its Kagem emeralds, which account for nearly all of the company’s revenue.

The auction was held in Lusaka at the request of the Zambian Ministry of Mines, Energy and Water Development. The government first issued the directive in April, which appeared to be a surprise to Gemfields. Particularly since the two entities are business partners, with Zambia owns a 25 percent stake in the Kagem mine with Gemfields owning the remaining 25 percent.

The government in a statement said the directive is designed to promote transparency and accountability in the marketing of emeralds, stimulate local demand for emeralds, create more opportunities for small-scale miners to have access to colored gemstone markets, and increase tourism.

“Zambian gemstones have for a long time been sold on foreign markets, a situation that has contributed to capital flight and denied Zambians of the much needed benefits from the resource,” Yamfwa Mukanga, Zambia mining minister, said in the original statement.

This is the second auction of Kagem emeralds held in Lusaka. It was originally scheduled to be held in Singapore June 10-14, but was postponed and rescheduled to Lusaka due to government pressure.

Gemfields insists that it needs to sell Kagem emeralds at places that will likely get the most interest and the best price in order to compete with other emerald hubs, such as Colombia and Brazil. With the most recent sale showing such strong results the government seems to have the upper hand in this argument.

In a statement, Ian Harebottle, CEO of Gemfields, credited “favorable market conditions and particularly strong demand from our customers” for the strong results. “All indications show that demand for colored gemstones, and especially emeralds, will continue to increase at a steady pace over the coming year.”

Gemfields said its 13 auctions held since July 2009 have generated $207.3 million in aggregate revenues.

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