[SINGAPORE] The Republic has the potential to become the world's marketplace for gemstones, said London-listed gemstone miner Gemfields, which held its first-ever ruby auction in Singapore between June 12 and 17.
The firm, which sold 1.82 million carats of the 2.03 million carats offered at the auction, raked in sales of US$33.5 million, or an average of US$18.43 for each carat. Gemfields owns 75 per cent of a ruby mine in Mozambique and hopes to produce up to 30 per cent of the world's ruby supply in the next two to three years.
Singapore is an ideal location for the inaugural auction as it is a neutral place for buyers from countries such as Thailand, the US, India, Germany and Israel to gather, said Gemfields' CEO, Ian Harebottle. "It is safe, has great weather, and a tax-free environment."
In comparison, a city such as Dubai might not be as welcoming of buyers from certain countries such as Israel, he added. The buyers are typically gemstone cutters who would process and sell the stones to wholesale jewellery makers, who in turn sell to retail jewellery firms.
Many of the auction participants, especially those from Thailand which has a large ruby market, were attending a Gemfields auction for the first time. Gemfields, which produces a fifth of the world's rough emeralds as well, also saw participants who had attended its emerald auctions previously, held in Singapore and cities such as Johannesburg and London.
"This cross-pollination of gem buyers across the range of gemstones produced by Gemfields is expected to further the company's vision for growth and development of the coloured gemstone sector internationally," the firm said.
Gemfields plans to hold three more ruby auctions in the next 12 months, likely in Singapore. The next one is expected to take place before the end of this year.
In preparing for the ruby auction, Gemfields developed a grading and sorting framework for rough rubies, a first for the market.
Buyers were invited to inspect the stones at a row of booths set up at the Singapore Turf Club over the five days. They submitted bids - their own estimates of the value of the rubies - at the end, with the stones going to the highest bidder only if the price offered exceeds the firm's internal and undisclosed reserve prices for the lot. Of the 62 lots offered, 57 were sold.
Gemfields also vets beforehand the buyers it invites to the auction, ensuring that they have legitimate bank accounts and are registered with the relevant authorities, among other criteria.
Gemfields, whose share price on the London junior stock exchange AIM has more than doubled to £51 in the past 12 months and now has a market capitalisation of £275.4 million (S$584.1 million), hopes to create higher demand for coloured gemstones through marketing and branding.
"Our vision is to do for coloured gems what De Beers did for diamonds," said Mr Harebottle, adding that the firm merely has to "remind" consumers of the value of gemstones.
De Beers is credited with increasing consumer demand for diamonds, transforming it into a symbol of love and creating the famous advertising slogan "a diamond is forever".
Gemstones have become more popular in recent years as consumers become more individualistic in their tastes and seek unique jewellery, Gemfields said.
The firm also markets itself as an ethical mining company, providing a certificate for every stone that passes from its hands - this guarantees that the gemstones are problem-free and can be traced back to the mine.
Besides the usual 4Cs of cut, colour, clarity and carat, "we have added a fifth C of confidence," Mr Harebottle told reporters, adding that in many instances in history, expensive paintings have become worthless for their owners when found to be stolen. "Traceability is to ensure that the gemstone retains its value."
The firm, on its way to building a portfolio of various coloured gemstones, is now on the lookout for opportunities to buy sapphire mines. It also does not rule out buying mines in countries in the region such as Myanmar.
Mr Harebottle's dream is for gemstone jewellery to become like pieces of art, where a creation is worth more than the sum of its parts.
"When you can create art with jewellery, that is everlasting," he said. "And to do that, you have to have the whole spectrum - all the colours of the rainbow."