By Diana Jarrett
|RAPAPORT... The novel coronavirus has put the brakes on every aspect of gem trading around the globe, and the limit on international travel is one of the most notable setbacks. Miners, geologists and suppliers usually must make their way from remote mining sites to manufacturers, keeping the flow of goods moving toward the end user. What are they doing now while this crisis plays out? And what is life like for them as they shelter in place?
“This virus has changed everything for everybody. So many local people are suffering — they don’t have options,” says Chris Johnston, a geologist and miner based in Namibia. The lack of tourism in particular has impacted his business. “During the lockdown here in Namibia, we’re quite isolated, and the borders are closed. I haven’t been chasing after any gem materials because nobody’s buying. We have a 98% reliance on tourists buying stones. I have a safe full of cut stones.”
Sri Lanka, too, has been under “a continuous lockdown for months,” relates Zion da Silva of precious-stone dealer Mount Zion Gems and Jewellery. “It was very effective in controlling the pandemic locally. However, mining was instructed to stop, too.” In Sri Lanka’s case, the full-stop measures had a positive outcome. “Despite these challenges, everything has [gone] back to normal, with increased mining and higher local demand.”
Colombia native Jose Rodriguez owns Queen Emerald, which has its main store in Bogota. The decades-old family-run company also has a convenient shop in Miami, Florida, but at this point, all business takes place online. The brand is known for its custom high-end Colombian emerald jewelry, which he and family members source locally. The whole country was on lockdown for months, Rodriguez says, but it is slowly opening up again.
Still, he points out, “everyone in Colombia is extremely cautious, as the health care system there is very fragile.” The emerald district has become very quiet, “with big mining companies working with much fewer people now.”
Buying sight unseen
Paul Levin, owner of California-based gem dealer Tairona Co., has spent the past 46 years chasing exceptional stones in Thailand and Sri Lanka. Before that, it was Tanzania and Brazil. “I had just returned from Asia when the lockdown started [in the US]. To get goods now is a challenge. People can send me stones, but to purchase sight unseen has always been challenging.”
For one thing, these suppliers “may not be as selective” in choosing the right stones for his clients, he explains. Then there’s the issue of negotiating. “With pricing, I cannot see [without being there] what others are selling in the market, so I may not always be getting the price I would normally pay when buying there.”
Levin reminisces about the thrill of discovering stones on-site. “Finding the deals, that one stone that can make your trip — that experience is all gone.”
Not everyone is finding the moratorium on mobility to be a major obstacle, however. “In Sri Lanka, the Chinese that are still sitting there because they could not leave send photos back to China, and buy goods based on the photo and their buyer’s word,” says Levin. “They are purchasing unheated top stones, so prices are increasing due to this competitive market.”
New channels for doing business
Southeast Asia is the global hub for much of the gemstone trade, but large trade shows are but a memory now. Between that and the shutdown of brick-and-mortar stores, the pandemic has caught the industry off guard, forcing it to think on its feet.
“What I have learned is how few of my clients were prepared for something like this due to their lack of social media presence and a good retail website,” Levin says.
A greater reliance on digital technology, photography, videos and gemological reports are going to be the alternative to in-person shopping and events, predicts gemologist Edward Cleveland of GRS GemResearch SwissLab in Bangkok, Thailand. “I see a wealth of gemstone information going online, with educated, passionate individuals creating short videos, podcasts and other forms of online media to promote their goods.”
Meanwhile, he says, Thailand businesses are sticking with suppliers they know and letting international shipping do their traveling for them. “The postal service is still moving, so traders rely on old, trusted sources because you can’t fly out of the country at the moment.”
Rodriguez also stresses the importance of reliable shipping procedures. “FedEx is the only tool for handling large exportations from Colombia now, and they’ve changed their procedures as the crisis has taken hold,” he says. Dealers in Colombia must buy their own insurance, and FedEx will ship only on certain days using special boxes. “They were scared of shipping high-value goods of up to $90,000 in small boxes,” he explains.
In some cases, domestic demand has taken over. “When the international shipping network was down, the local circulation of gems started to happen,” reports da Silva in Sri Lanka. “The supply chain continued where there was good demand for gems among the local crowd.”
Under the current conditions, says Johnston, “I stay isolated and only go into town every few days. We just got our first case of Covid-19 recently.” When he does venture out to hunt down mineral specimens, he says, “I carry alcohol to wipe my hands down like everybody now.”
Investing in the future
In the short term, traders are weighing how to proceed as they approach the holiday season, says Rodriguez. “Everybody is waiting to see what is going to happen through December 2020. The trade is very careful in how they are investing their money. Big mining companies that produce most of the gemstones in Colombia are looking at investing in the final customer now.” He cites De Beers’ efforts to expand its reach in the retail space.
The major trade fairs are where the big deals have historically been made, Johnston reflects, but “when and if the large shows come back, they will be very different — because maybe we won’t get rid of this coronavirus at all.” To keep his head in the game, he’s stepping up his social media presence — “and thus far, it is working, but it’s a lot of work.” Having an alternate income source can help, he suggests. “I’ve developed a skill set over the past 30-plus years doing professional photography, [which] has allowed me to make a shift.”
Da Silva, for his part, sees a light at the end of the tunnel. “With the export gateways being opened again, shipping to major destinations such as the US and EU has now begun. This will also be a good opportunity for international sellers to buy gems at good prices for their stock.”
Cleveland is hopeful as well. “The situation is uncertain for the moment, but people will never stop buying beauty.”
This article was first published in the September issue of Rapaport Magazine.
Image: Miners create elevation with metal drums in Namibia to feed the crushers at Green Dragon demantoid mine. (Chris Johnston)
Source: Rapaport 14-9-2020