Tuesday, March 20, 2007

Big Spike in Topaz Prices

Mine Owners Manipulate Local Market

By Richard W. Wise, G.G.

© 2007

Collectors in the U. S. have noticed a substantial spike in topaz prices. Rumors have recently been circulating in the trade to the effect that price hikes were the result of forced closings of topaz mines by government environmental officials. I heard similar rumors from usually well informed dealers on a trip to Brazil in late January. (image: above left slightly orangy-pink Imperial topaz ring courtesy R. W. Wise, Goldsmiths)

According to David Epstein, author of The Gem Merchant and an American dealer living in Brazil the latest price increases are a result of market manipulation by the owners of Capão, Brazil’s largest commercial topaz mine. According to Epstein, Capao’s owners are systematically buying all the peach topaz produced by the 10-12 smaller mines currently active in the area in the topaz producing area. (image left: 0672 medium toned pinkish orange summer or ripe peach topaz from Capao Mine) Capão is located about five kilometers from the small village of Rodrigo Silva almost dead center of the two hundred ninety square kilometer topaz belt running in an east-west direction west of Oro Preto. (Image above: #2622 2.13 carat light toned pinkish orange spring peach topaz) For more on the Capão mine: http://Topaz; A Visit To the Mine

This buy up has been targeted at stones in the peach hues that the mine owners consider undervalued. Peach can be best defined as a pinkish-orange-brown to orangy pink range of hues. You will note that I do not use the term "Imperial" because the traditional distinction between precious and imperial makes little sense. Is an Imperial topaz not precious? Imperial is one of those terms that confuse rather than clarify. I like the terms spring, ripe and winter peach. A bit faciful? Yes, but fairly descriptive. As the orange tone deepens the stone goes from spring to ripe to overripe (winter), rotten would work but thats a hell of a way to market a gemstone.

The geographically limited production of topaz has made the market control scenario more than just possible. Commercial quantities of precious topaz ( all topaz other than the blue irradiated material), is mined in just one place, a twenty-square mile area in the Brazilian state Of Minas Gerais immediately adjacent to the city of Oro Preto. Capão is, in fact, one of only two large mechanized mines and the only one that currently sells commercial quantities into the world market. According to Epstein Capão’s owner Dr. Wagner and chief buyer Sr. Edgar have been aggressively buying up peach stones for more than two years.

Capão's aggressive buying has born fruit. Prices in Brazil have jumped between two to three times previous levels. Oddly enough topaz prices in the higher priced pink, red and sherry colors have remained stable. According to Epstein, Capão's principals believe that prices in these rarer categories are already high and they miners feared a falloff in demand if they attempted to push them higher.

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Nickynewark said...

If the Capao mine owners want to pull a De Beers type phony shortage- they can eat their stones. If Imperial isn't available at a good price-I'm not buying--- Nick

Cassandra_Moderna said...

I know a mine in Itambé, Bahia, where there are many natural blue topazes. The owner refuses to sell to people who want to irradiate stones.

I tend not to agree with you about the imperial topaz. Real imperial topaz from Ouro Preto has a different structure and requires different cutting than the stronger light champagne-colored topaz that is irradiated.

Also, the shimmering effect of imperial topaz from Ouro Preto is much finer.

Of course, the irradiated topaz from Katlang, Pakistan, loses all of its color at the earliest opportunity.

A lot of that irradiated "imperial" topaz is sold on eBay. It is all junk.

But as to Nick's comment about a phoney shortage, I would also disagree with that, too.

The Chinese are buying so many stones that the shortage will never be over. Buy now or never.