Saturday, 28 March 2009

The Gem of Tanzania Part II

The Gem of Tanzania is featured in today's FT.  More of the story is pieced together and a bit of movie style enhancement is included.  The stone's original owner, Trevor Michael Hart-Jones is quoted saying

"The stone is jinxed"..."It was bad luck and from the moment I bought it everything went wrong".

Did you know Missmarketcrash is a certified Gemologist?  Back in the early 90's during the recession I was unemployed.  I applied week after week for this and that.  Growing despondent, I invented a game to keep motivated whilst looking for a job. Each week, I would pick the job I was most unqualified for, and, re-write my resume and cover letter.  It provided good relief and a few laughs.  Until they called.  The Gemological Institute of America phoned to arrange an interview.  I kept a straight face whilst on the phone, and then, burst into laughter.  

Off I went to the interview on 47th Street, Diamond Row.  A very subtle door led through a labyrinth of security.  I was given a series of tests in a dimly lit room.  One involved a row of 12 diamonds, others involved different coloured pegs.  And there was a psychological exam.  A week later, I was called in for a second interview.  I accepted the job with a straight face though I was still in it for a lark.  Whilst employed I powered through a bunch of courses and became a certified gemologist.  It was a very odd world.  I evaluated stones from Christies and Sotheby's as well as from a host of diamond dealers.  Much of the job was spent in a dark room with a microscope, but, once a week we worked the front office and took gems in from the customers.  The dealers were primarily Hasidic Jews and the most marvelous things would emerge from pockets wrapped up in paper packets.  Once, a dealer lifted up his son's yamulke and plucked an astonishingly large blue star sapphire from underneath and handed it over.

Now.  Value is something that is never assigned by any expert gemologist.  A gemologist is concerned with the quality of gems, never the worth.  An uncut stone may be called a derivative product as its value is dependent on the value of it being something else.  And that something else is a bunch of cut stones.  The uncut stone can be best assessed by a master cutter rather than a gemologist, or an insurer.  At the end of the FT article, the original mine suggests that its value may well be accurate if it were cut unto hundreds of smaller jewels.  So, does the mine know it is not of sufficient quality to yield one amazing gigantic stone?  Well, you'd have to go ask them a bit more.  If it could be one amazing stone and a few little offcuts, it would deserve the title "The Gem of Tanzania".  But, as it is likely to yield hundreds of ordinary rubies of unknown color and clarity and size, it is perhaps not worthy of a title yet.

However, now that "The Gem of Tanzania" has been declared jinxed, it's value can forever remain in dispute. Somewhat like what has happened to credit default swaps.  Clever move, Mr. Trevor Michael Hart-Jones.


Jack The Jeweller said...

Ohmigawd - last time I checked the wholesale, the value at very good quality for less than 1ct rubies was around £900+VAT per carat at retail per stone. By my calculations you'd need about 10,000 carats cut rubies to make this stone worth the reported £11m at a retail price yet alone an insurance valuation ... alot more than that at wholesale prices.

Of course, it would have to be quite a bit bigger than that uncut - so if it was determined that you could get around 10,000 carats good quality gemstones out of it - it could be cut into one big stone and a few others. Throw in a few 5's and and couple of 10's at intense internally flawless, a 15+ and say a 25ct at very good quality then you might be talking. Still, it would have to be exceptional to be worth £11m insurance, given that the Mogok ruby fetched around $220K per carat at auction and that was cut at nearly 16ct and had the provenance as well.

Anyway, its all corrundum to me!

missmarketcrash said...

"It's all corundum to me" that.