This month is marked by two auctions held by Gemfields for commercial-quality gemstones. The outcomes have already been reported by the company for both events – sapphire, corundum, and rubies as well as emeralds auctions.
The three-day bidding event mostly presented sapphire, corundum of commercial quality, and market-standard rubies were said to be enjoyable and successful. The sale was held at the beginning of September and attracted a lot of visitors, regardless of the commercial focus of the goods. The substantial quantity of cheaper-priced rough gems sold will be directed to provide for the cutting centers in Thailand and India.
The auction can be definitely called successful as it achieved a 100 percent sell-through rate, bringing in $2.3 million. Last year’s figure was lower – $1.5 million. The lots together comprised 5.7 million carats with an average price per carat of $0.41, and all ten items found a buyer.
The material was acquired from Montepuez Ruby Mining Limitada (MRM), a joint venture in which Gemfields holds a 75 percent stake, while the remaining 25 percent is managed by its Mozambican collaborator, Mwiriti Limitada. Corundum and sapphire offered at the auction are regarded as by-products of MRM.
Both the Government of Mozambique and Gemfields’ allies at Mwiriti were present at the event. They were congratulated by the managing director of product and sales on the outcome of the auctioning, as the profit from this auction will be completely repatriated to MRM in Mozambique. According to Gemfields, the Government of the Republic of Mozambique will receive all royalties paid on the full sales price obtained at the auction.
The retail-quality emerald event unfolded differently, with 18 lots, which amounted to 1.6 million carats, pulled out of the auction. The reason was a discrepancy between the placed bids and the lowest price the company expected to get.
Anyway, Gemfields managed to bring in $10.8 million with an entirety of 4 million carats, registering a median price per carat of $4.47. It should be mentioned that 61 percent sold by weight and by lot.
In comparison with the previous trade-grade emerald bidding event held in spring, the per-carat value was higher and comprised $4.45 and the overall proceeds of $17.1 million, with 92 percent sold according to weight.
The number of items sold was also different: 40 out of 43 offered items found buyers during the spring event, while the autumn sales had 28 of the 46. However, Gemfields didn’t compromise their views and acted responsibly by removing bidding items of considerable value and volume from the auction when a fair price wasn’t offered.
The review of spring and autumn auctions is intended only to present data because the results can’t be directly compared due to the lots’ differences in essential criteria.
Many factors, including political tensions, electoral events, economic fluctuation in China, and general market volatility made their mark on the premium items, diamond, and gemstone markets. Currently, these areas are facing significant challenges. It also can be proved by the overall results of both auctions, as they appeared to be worse than anticipated. Another reason, outside the global circumstances, is that a competing emerald manufacturer planned their event to coincide with Gemfields’. Moreover, clients described their retail prices for emeralds as low.
Emeralds put up for auction were acquired from the Kagem emerald deposit in Zambia, which is 75 percent owned by Gemfields and 25 percent by the Industrial Development Corporation of Zambia.
The sales event was held via an E-auction platform developed for the miner, allowing customers from various locations to be a part of a sealed bid process between August 27 and September 13. Before the bidding event, buyers in Jaipur, India, had the opportunity to view the lots in person.
According to Gemfields, the total income from this auction will be returned to Kagem in Zambia, with entire royalties owed to the Government of the Republic of Zambia paid based on the total sales prices achieved during the auction.
Since the summer of 2009, 49 auctions of Kagem-mined stones have yielded over 1 billion USD in earnings.
Despite all the external factors, Gemfields is preparing for the auction of finest-grade emeralds set for the last Autumn month of this year and feels optimistic that market conditions will improve.
