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Corporations Fostering Awareness of Colored Gemstones

Q&A with Israel (Eli) Eliezri, Founder and President of Colgem-Coldiam Ltd., former president of the International Colored Gemstone Association (ICA)
Apr 17, 2015 5:16 AM   By Ronen Shnidman
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RAPAPORT... Eli Eliezri founded and manages the colored gemstone manufacturer Colgem and its sister company, Coldiam, which specializes in colored diamonds. He also served as president of the International Colored Gemstone Association (ICA) between 1999 and 2003. Over four decades in the industry, Eliezri has been involved in the mining, dealing, polishing and marketing of rough and polished colored gemstones. He recently spoke with Rapaport News about some of the factors driving the popularity of colored gemstones in recent year and the factors that distinguish the trade in colored gemstones from their diamond counterpart.

Rapaport News: How did you get into the gemstone business?

EE: I have always been fascinated by two things: oil and gems. I studied geology at Hebrew University in Jerusalem and specialized in two areas: petrology and crystallography, and mineralogy. After I finished my studies I began working in undersea oil exploration as a geologist. My biggest successful discovery was in the North Sea, but I also spent time off the coast of West Africa.

But I had a young family, and around 1975, I decided that I wanted to move with my family back to Israel. At that time, Israel did not have a developed oil and natural gas industry. But Israel was a major center for emerald polishing at the time, so I decided to make my other love, gemology, my profession.

RN: How did Israel become a center for the emerald trade?

EE: Jews have always been involved in the gemstone trade. Historically, Jews of Eastern European descent focused on diamonds but Jews from the Middle East, namely Persia and Bukhara, focused on colored gemstones.

Israel has never been a country with abundant natural resources, but it has long been a center for gemstone polishing technology and expertise. In the case of colored gemstones, many Persian and Bukharan Jews with experience in the global gemstone trade moved to Israel following the Six Day War in 1967. They established the colored gemstone industry in Israel and focused on a gemstone for which they could secure an adequate supply of raw material, which was the emerald.

At that time, rubies and sapphires were largely mined in South Asia and East Asia, which meant that polishers in places like India and Thailand had better access to raw materials. However, emeralds were primarily mined in Colombia and Brazil at that time and later on in Africa. This meant that the sources of rough emeralds were at least as close to Israel as any other major polishing center, so they could compete on equal terms for supply. By the 1970s, approximately 40 percent of the world emerald supply by value was polished in Israel.

RN: Does your company mainly polish emeralds then?

EE: No, I started out by traveling the world with my business partner buying rough emeralds and rubies and then selling them to manufacturers in Israel.

Over time, I created my current company Colgem to also polish gemstones. Colgem is a Hebrew-English play on words from the Hebrew col, which means all, and the English word gem. As it became more difficult to procure rough rubies and emeralds, we branched out into other stones as well. Today, we polish emeralds, aquamarines, tourmalines and other colored gemstones as well. It all depends on market demand and our access to a reliable supply of rough.

To secure a steady supply of rough, we even went into mining at some point. First we were involved in mining emeralds in Brazil and then Africa. We also discovered a mine in Africa of an orange-colored gemstone mandarin garnet that had never been seen before. We helped bring that gemstone to the world, although we eventually exhausted the supply of mandarin garnet.

In recent years, like many others in the Israeli gemstone industry, we branched out into colored diamonds as well. We set up a sister company to Colgem called Coldiam for that purpose. Gemstone dealers have an advantage in colored diamonds because they possess more experience and a deeper understanding of color than diamond dealers whose experience mainly lies with colorless or white diamonds.

RN: Who is the typical gemstone end-consumer and what is the typical consumer looking for?

EE: Colored gemstones, especially emeralds, rubies and sapphires, are typically used as the center stone in a piece of jewelry. They are much less commonly used for settings. Small diamonds, on the other hand, are frequently used in settings to accentuate a piece of jewelry. Of course, you will also see diamonds used as center stones, but there are also diamonds used in settings.

RN: Gemstones are also very individualistic in that each gemstone has its own specific color and no two stones will look alike. This actually makes it very difficult to find matching gemstone pairs, as opposed to diamond pairs, for jewelry like earrings and bracelets.

However, this fact has added to colored gemstones’ appeal to the younger generation today. They are increasingly looking to express their individuality through jewelry instead of fitting into the mold. Consequently, colored gemstones are very popular, particularly in the markets that traditionally lacked a culture of buying diamonds. Europeans have always preferred colored gemstones to diamonds, while the Far East has become a major market for colored gemstones in the past 50 years or less. In contrast, colored gemstones have only become popular in North America in the past few years.

It reminds me of a sort of motto or joke I have often shared with my clients over the years to encourage them to buy colored gemstones: Bring color to your life, bring color to your wife.

RN: How is assessing the value of a colored gemstone different in comparison with valuing a white diamond?

EE: There is no clear pricing formula for gemstones. If there were, something like the Rapaport Price List would also exist for gemstones. As a result, you can get different prices for the same stone from different people or in different markets, but the differences will not be drastic.

A major factor in determining the price of a colored gemstone is the stone’s color itself. Color is much more important than it is for diamonds. Most diamonds are white. Their color grades just indicate that the diamond is lighter or darker white. But with emeralds, for example, someone has already distinguished 300 basic color categories for green emeralds and that is just including the primary hue. Gemstones typically have secondary colors as well. For example, an olive green emerald will be almost brown with just a little green. It will not look that appealing, so its price will be relatively low. However, an emerald that is grass green will look vibrant with color and much more appealing to the eye, so it will be worth significantly more. People who specialize in gemstones gradually gain expertise in distinguishing and assessing the value of all the different variations in color, but it is something that is nearly impossible for a layman to try without getting confused very quickly.

Colored gemstones, like diamonds, are priced by carat weight, with larger gemstones receiving higher prices per carat. However, the premium paid for a bigger stone is not as large as it is with diamonds. With diamonds, for example, there is typically a very significant jump in the per carat price for diamonds that are 1-carat compared with diamonds that are 2-carat. With colored gemstones, the jump in prices per carat by size is smaller.

Polishing is also important in colored gemstones, but not in the same way as it is with diamonds. With diamonds, you maximize the value of the stone by optimizing its relative proportions. With colored gemstones, the exact angles and the proportion of the gem’s table to its pavilion is not important. What is important is that the gem look aesthetically pleasing when it is worn as part of a piece of jewelry. The polished gemstone should neither be too large nor too small. Its faceting should give it a distinct shape. The height of a colored gem also has a large impact on whether it looks opaque or has a window effect. The gemstone shouldn’t be too tall because it must fit, but if it is too short, then it will create a window effect that is undesirable.

RN: Is the relatively low price of most commercial-quality gemstones one of the factors driving their increasing use in jewelry in recent years?

EE: Yes, for one thing, the price of diamonds has risen quite a lot. This means that the average consumer gets a larger or nicer looking colored gemstone for the same amount of money it would cost them to buy a small diamond.

Until recently, all the colored gemstone mines were owned and operated by small, family-based ventures in remote locations around the world. These people did not have the money or the expertise to promote colored gemstones to the consumer.

This started to change 30 years ago when some of the people in the world gemstone industry came together to establish the International Colored Gemstone Association (ICA). The purpose of the ICA, of which I was president from 1999 to 2003, was to bring together all the players in the gemstone business into one body that could spread the message of colored gemstones to the world.

The ICA helped get the ball rolling for colored gemstones. The creation of professional, corporate gemstone mining ventures in the past decade has also helped raise the profile of colored gemstone. In emeralds, there is Gemfields, which now holds regular auctions and invests heavily in promoting gemstone jewelry. With tanzanite there is Tanzanite One, which runs a quasi-sight system to sell production from its mine in Tanzania.

The entry of larger corporations and the increasing professionalization of the colored gemstone industry that they are promoting will lead to greater public awareness and a larger consumer market for colored gemstones.
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Tags: Colgem, colored gemstones, Eliezri, emerald, ICA, mandarin garnet, Ronen Shnidman, ruby, sapphire, tanzanite
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