Valuation: A few basic guidelines.
In September 2010 I was invited by the gem mining company Gemfields to their auction of Emeralds that they had recently mined and cut in Zambia. It was a real learning curve. I have always been very honest and disclosed to everyone I know that the gemstone I find hardest to value and to purchase is Emerald, as it’s a gem that can vary so much in price. Well, the time I spent with Ian Harebottle (previously the top man at Tanzanite One whom we met when we filmed there several years back) and his team was invaluable. However, before I pass on what I learnt, let me precede it with a paragraph out of Gemfields latest brochure:
“When purchasing a rare gem such as an Emerald, there is little doubt that you are investing in an heirloom for life. Like any other precious gem, the beauty of an Emerald shouldn’t merely come down to its colour,clarity and carat weight. When investing in a rare gem such as an Emerald, be sure to buy on beauty that speaks to you.”
How true is that! We all must stop trying to value our gems down to the very last penny and appreciate that we fall in love with them for their individual beauty and not their vital statistics.
However, let me pass onto you what I have learnt over the years. Firstly, forget the old pecking order for Emerald as it doesn’t matter whether it’s Brazilian, Colombian, Afghan or Zambian. Sure, some in the trade will still maintain that you should value gems differently based on their locality, but you will see over the coming years that new values such as ethical mining and environmental responsibility of miners will start playing a much bigger part to any additional increase in the perceived value of the gemstone, beyond its beauty and carat weight.
So if like you, I have to value a gemstone on its beauty, then how do I go about it? Well, with Emerald, as with all other gems, it’s all about what treatment it has undergone, its carat weight, its colour and of course its clarity. Typically, Colombian Emeralds over 0.5ct are fissure filled with wax or resins, while Zambian Emeralds tend to just be treated with Johnson’s Baby Oil!
Clarity & colour
Now, once you know about the treatment, the next thing to consider is of course its clarity and colour (we will get to carat weight and cut later). With Emeralds it is highly unlikely that you are going to find a very clear piece. For example, when studying each piece before we submitted our sealed bids at the auction, all of them had inclusions and these were very high end pieces. My bids for example ranged from $200ct to $600ct and I was still unsuccessful in all but one lot. Now when you consider this is buying directly from the miner which is the most efficient possible supply chain, and that those who outbid me on most parcels will probably trade the gem several times before it gets sold to the end user, then these gems will probably end up at £2000 to £3000 per carat even with these inclusions!
So the thing with Emeralds is to study the inclusions and to decide how it affects the overall appearance of the gem. My main adviser I took to guide me at the auction was my very close friend, Ratnesh. His family are both Tanzanite One site holders and own one of the largest Emerald cutting houses in Jaipur. His family have been rooted in Emerald cutting for generations, and Ratnesh and his brother gave me the guidance I needed and helped me massively with my understanding and appreciation of this historical gemstone. What they taught me about deciding on how inclusions affect the value of an Emerald was to study where they are positioned: the closer to the table of the gem, then the greater the impact on price. If the inclusions go all the way across the gem, visually dividing the gem in two, then this also affects the price. However, if the inclusions are small, even if there are many of them and in the bottom portion of the gem then their effect on value is minimised.
Colour plays a big part in the value of Emeralds too. However, different people seem to view this differently. What Ratnesh and his brother were looking for was a true green, as to them the depth of colour was not as important as the hue. They valued those with a bluish green about 10% lower than those that were pure green.
The internal brilliance in the gemstone or the ‘life of the gem ’ as Ratnesh calls it, played a massive difference in their valuations. In one instance we compared two very similar Emeralds in terms of size, cut and clarity and they valued the one with better brilliance at $500 per carat and the one with less brilliance at $350!
Carat weight & cut
When it comes to carat weight, interestingly they did not vary the price as much as I would have expected for one of the rarest gems on the planet. To my teachers, a nice Emerald is a nice Emerald and price per carat only increased marginally with size. The hue, clarity, internal brilliance (which confusingly many Emerald dealers refer to as lustre), treatment and cut, seemed more important in their valuations.
The final valuation criteria, was the cut and I have left this until last as we had very different perspectives. Firstly, we all agreed that the quality of the cut and the symmetry is very important in Emeralds, especially as none of them are brilliant cut, which means it is more noticeable if a gem is badly cut. However, whilst they valued gems higher if they were in a more traditional deeper cut, I valued them higher if the ‘table up view’ was bigger. Let me try and explain this a little more clearly. If a 1ct Emerald has a deep pavilion, it will of course be smaller than a 1ct Emerald that is cut shallower. To me the size of the gem from the table was slightly more important than the slight increase in internal brilliance that we saw in deeper cut gems. So we agreed to disagree on this point and concluded that this is one of the most intriguing things about our industry: that different people have different views.
So my lesson in Emerald valuation came to a close. Unfortunately, we were only successful in buying one parcel of around 20 pieces and were outbid on most lots (other invitees had obviously placed higher valuations on the various other lots than we had). What I had learnt was that I would no longer value Emeralds so much by their geographic location, but focus more on the positioning of the inclusions and the internal life of the gem.
