(via Emergic)
Here is what the Economist has to say about Nassim Taleb’s “The BlackSwan”:
Nassim Nicholas Taleb, a professor of the sciences of uncertainty (who gave us “known unknowns”), has no time for the “charlatans” who think they can map the future. Forget the important things: we can't even get it right when estimating the cost of a building—witness the massively over budget Sydney Opera House or the new Wembley Stadium.
The problem is that almost all forecasters work within the parameters of the Gaussian bell curve, which ignores large deviations and thus fails to take account of “Black Swans”. Mr Taleb defines a Black Swan as an event that is unexpected, has an extreme impact and is made to seem predictable by explanations concocted afterwards. It can be both positive and negative. Examples include the September 11th 2001 attacks and the rise of the internet. Smaller shocks, such as novels and pop acts whose popularity explodes thanks to word of mouth, can also be Black Swans.
This is what The Wall Street Journal wrote:
The power-law distribution, by contrast [to the bell-curve distribution], would seem to have little to recommend it. Not only does it disproportionately reward the few, but it also turns out to be notoriously difficult to derive with precision. The most important events may occur so rarely that existing data points can never truly assure us that the future won't look very different from the present. We can be fairly certain that we will never meet anyone 14-feet tall, but it is entirely possible that, over time, we will hear of a man twice as rich as Bill Gates or witness a market crash twice as devastating as that of October 1987.
The problem, insists Mr. Taleb, is that most of the time we are in the land of the power law and don't know it…If we accept Mr. Taleb's premise about power-law ascendancy, we are left with a troubling question: How do you function in a world where accurate prediction is rarely possible, where history isn't a reliable guide to the future and where the most important events cannot be anticipated?
Mr. Taleb presents a range of answers--be prepared for various outcomes, he says, and don't rush for buses--but it's clear that he remains slightly vexed by the world he describes so vividly. Then again, beatific serenity may not be the goal here. As Mr. Taleb warns, certitude is likely to be found only in a fool's (bell-curve) paradise, where we choose the comfort of the "precisely wrong" over the challenge of the "broadly correct." Beneath Mr. Taleb's blustery rhetoric lives a surprisingly humble soul who has chosen to follow a demanding and somewhat lonely path.
Niall Ferguson wrote in The Telegraph:
Taleb's central point, then, is that we are too much influenced by instinct, history, Plato and Gauss. We assume the entire world is "Mediocristan", whereas in reality large swathes of it are "Extremistan".
The trouble is that it is much harder to live with this insight than to live without it. As Taleb's critics in the financial world will tell you (and he himself admits), merely insuring yourself against fat tail events does not constitute a profitable trading strategy. Knowing that world wars can happen roughly twice a century is like knowing that a student can run amok roughly once a decade: it doesn't allow you to predict which diplomatic/personality crisis will be the lethal one.
For practical purposes, it turns out we humans prefer to work with predictions and forecasts, even when they are nearly always wrong. We prefer to regard financial markets as casinos (what Taleb calls "the ludic fallacy" that odds are always calculable), even when they clearly aren't. And we resist paying excessive insurance premiums to cover ourselves against very remote contingencies.
Thursday, June 07, 2007
Wednesday, June 06, 2007
Black Swan: Definition
I have always been curious about the Black Swan concept. Then it dawned upon me that when you look at yourself and the strange events that follow nothing in the past can convincingly point to its possibility. It becomes a unique total internal reflection. I think this concept should have practical applications in the colored stone and diamond industry. Black Swan is a one hundred carat statement + it's priceless.
Business World spoke to Nassim Taleb. Excerpts from the interview:
What is a Black Swan?
Medieval Europeans had only ever seen white swans. In fact, any impossible event was termed a ‘black swan’. So, when the first settlers reached Australia, they were shocked to find black swans all over! Taleb's black swans are those events that were once thought impossible, but when they occur, hit hard. In this extract, he writes about how we create narratives after ‘black swan’ events; making them seem predictable after they occur.
Why are black swans important?
People say “Taleb wants us to worry about meteorites hitting Earth.” I want to help people navigate in a world where we don’t have a clear understanding of reality. Black Swan is essentially a map of how to deal with such a reality. The book distinguished between [two imaginary places] Mediocristan and Extremistan. In Mediocristan, variations in any sample do not result in large deviations from the average. The question, then, is which domains or areas have highly consequential variables? These places are Extremistan.…What are some of the classic examples of black swan events? A classic black swan event is the First War (World War I). It was not as predictable as people believe it was. Then you have all this technology — computers, lasers. Their future uses could never be predicted when they were invented.
Wired also interviews Nassim Taleb:
With better models and more computational power, won't we get better at predicting Black Swans?
We know from chaos theory that even if you had a perfect model of the world, you'd need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don't have anything like that. And things are getting worse, not better, because the growing complexity of the world dwarfs any improvement in sophistication or computational power.
So what do we do? If we can't forecast the really important things, how do we act?
You need to ask, "If the Black Swan hits me, will it help me or hurt me?" You cannot figure out the probability of a Black Swan hitting. But if you're in a business that's prone to negative Black Swans, like catastrophe insurance, I advise you not to take your forecasting seriously — and to think about getting into a different business. You don't want to be a sucker. What you want are situations where you can have as much of the good uncertainty as possible, where nothing too bad can happen to you, and where you have what I call free options. All of technology, really, is about maximizing free options. It's like venture capital: Most of the money you make is from things you weren't looking for. But you find them only if you search.
Wikipedia has more on Nassim Taleb.
Business World spoke to Nassim Taleb. Excerpts from the interview:
What is a Black Swan?
Medieval Europeans had only ever seen white swans. In fact, any impossible event was termed a ‘black swan’. So, when the first settlers reached Australia, they were shocked to find black swans all over! Taleb's black swans are those events that were once thought impossible, but when they occur, hit hard. In this extract, he writes about how we create narratives after ‘black swan’ events; making them seem predictable after they occur.
Why are black swans important?
People say “Taleb wants us to worry about meteorites hitting Earth.” I want to help people navigate in a world where we don’t have a clear understanding of reality. Black Swan is essentially a map of how to deal with such a reality. The book distinguished between [two imaginary places] Mediocristan and Extremistan. In Mediocristan, variations in any sample do not result in large deviations from the average. The question, then, is which domains or areas have highly consequential variables? These places are Extremistan.…What are some of the classic examples of black swan events? A classic black swan event is the First War (World War I). It was not as predictable as people believe it was. Then you have all this technology — computers, lasers. Their future uses could never be predicted when they were invented.
Wired also interviews Nassim Taleb:
With better models and more computational power, won't we get better at predicting Black Swans?
We know from chaos theory that even if you had a perfect model of the world, you'd need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don't have anything like that. And things are getting worse, not better, because the growing complexity of the world dwarfs any improvement in sophistication or computational power.
So what do we do? If we can't forecast the really important things, how do we act?
You need to ask, "If the Black Swan hits me, will it help me or hurt me?" You cannot figure out the probability of a Black Swan hitting. But if you're in a business that's prone to negative Black Swans, like catastrophe insurance, I advise you not to take your forecasting seriously — and to think about getting into a different business. You don't want to be a sucker. What you want are situations where you can have as much of the good uncertainty as possible, where nothing too bad can happen to you, and where you have what I call free options. All of technology, really, is about maximizing free options. It's like venture capital: Most of the money you make is from things you weren't looking for. But you find them only if you search.
Wikipedia has more on Nassim Taleb.
Source Type Classification Of Gem Corundum
I totally agree with Shane McClure because I understand the methodology, but many don't. As always, the problem is finding consensus among the gem dealers, colored stone grading experts, retailers and consumers. Today the gem trade and lab gemologists are having a hard time finding the 'sweet words' to convey the 'good news' to the consumers in a tone that makes sense. Keep trying.
Shane F McClure (GIA) writes:
The visual characteristics that gemologists and gem traders look for when examining a gemstone—such as hue, tone, saturation, and diaphenity—are the direct result of geologic environment in which the stone formed. This environment determines the stone’s chemical composition, growth structures, and inclusions suites, all of which affect its overall appearance. These factors are common for all gems, but are particularly significant in corundum.
While many different types of growth environments are possible, for corundum they can be broadly categorized into two main groups: metamorphic and magma-related; the later will be referred to simply as magmatic in this abstract. The largest distinction between these environments is that the metamorphic corundum formed in the earth’s upper crust, whereas the magmatic corundum crystallized much deeper in the earth at mid-crust or lower-crust/mantle levels. Eruptive forces are necessary to transport corundum from the latter group to the earth’s surface (typically in all alkali basaltic magma), so it is referred to as magmatic. While these two broad categories of sources for corundum may be readily distinguished by a combination of standard gemological and advanced analytical techniques, they can also commonly be recognized visually by a knowledgeable observer.
Beyond these two broad source designations, there exists a potential to further classify rubies and sapphires of all colors based on their dominant inclusion features and other physical characteristics. These inclusion features may influence the face-up appearance of a ruby or sapphire. For example, ‘milky’ zonal clouds of submicroscopic particles are responsible for the soft appearance or ‘velvety texture’ of blue Kashmir sapphires. Other possible features are concentrations of rutile needles, platelets, and particles that are commonly referred to as silk, which are typical of rubies and sapphires from Mogok, Myanmar (Burma). Such features, although commonly associated with a specific geographic source (e.g., Kashmir or Myanmar), more accurately distinguish a particular type of ruby or sapphire. Each corundum type shares other properties—including absorption spectra, chemical trends, and growth structures—which may be encountered in stones from more than one deposit or country.
What is proposed here is a classification for rubies and sapphires using a system that is objective, repeatable, teachable and relevant. It does not attempt to pinpoint geographic locality or specific deposit, but it does provide information that directly relates to a stone’s appearance and position in the marketplace. The intent is to supply information to the trade that will be useful and consistent in representing their stones, which in turn should benefit the consumer as well.
Shane F McClure (GIA) writes:
The visual characteristics that gemologists and gem traders look for when examining a gemstone—such as hue, tone, saturation, and diaphenity—are the direct result of geologic environment in which the stone formed. This environment determines the stone’s chemical composition, growth structures, and inclusions suites, all of which affect its overall appearance. These factors are common for all gems, but are particularly significant in corundum.
While many different types of growth environments are possible, for corundum they can be broadly categorized into two main groups: metamorphic and magma-related; the later will be referred to simply as magmatic in this abstract. The largest distinction between these environments is that the metamorphic corundum formed in the earth’s upper crust, whereas the magmatic corundum crystallized much deeper in the earth at mid-crust or lower-crust/mantle levels. Eruptive forces are necessary to transport corundum from the latter group to the earth’s surface (typically in all alkali basaltic magma), so it is referred to as magmatic. While these two broad categories of sources for corundum may be readily distinguished by a combination of standard gemological and advanced analytical techniques, they can also commonly be recognized visually by a knowledgeable observer.
Beyond these two broad source designations, there exists a potential to further classify rubies and sapphires of all colors based on their dominant inclusion features and other physical characteristics. These inclusion features may influence the face-up appearance of a ruby or sapphire. For example, ‘milky’ zonal clouds of submicroscopic particles are responsible for the soft appearance or ‘velvety texture’ of blue Kashmir sapphires. Other possible features are concentrations of rutile needles, platelets, and particles that are commonly referred to as silk, which are typical of rubies and sapphires from Mogok, Myanmar (Burma). Such features, although commonly associated with a specific geographic source (e.g., Kashmir or Myanmar), more accurately distinguish a particular type of ruby or sapphire. Each corundum type shares other properties—including absorption spectra, chemical trends, and growth structures—which may be encountered in stones from more than one deposit or country.
What is proposed here is a classification for rubies and sapphires using a system that is objective, repeatable, teachable and relevant. It does not attempt to pinpoint geographic locality or specific deposit, but it does provide information that directly relates to a stone’s appearance and position in the marketplace. The intent is to supply information to the trade that will be useful and consistent in representing their stones, which in turn should benefit the consumer as well.
How To Learn About Gemstone Pricing
Gem trade shows are excellent venues to get a feel for prices. Gems and jewelry can also be purchased at international auction houses such as the Christie's, Philips, Sotheby's, etc, but participation requires knowledge, special skills and a lot of money. Most gem shows specify in advance whether or not they are exclusively for the jewelry trade.
- If designated 'trade only', prices are generally at the wholesale level.
- If open to the public, prices are often lower than retail, but not at a wholesale level.
In order to get into a trade-only show, one must have some form of identification (e.g., a business card with connections to the jewelry trade or some other proof that you are in the gem trade). For some fairs, a business card alone is not sufficient, and your company may have to be listed and rated in a trade directory for that particular country.
At the Tucson show, exhibitions and seminars take place simultaneously across the whole city, making it the largest colored stone show in the world. Nearly every hotel in the city has a gem show in their convention halls, as well as dealers selling gems and jewelry from their hotel rooms. Other important shows include the Bangkok Gem & Jewelry show, the Hong Kong show, Basel Fair (Switzerland) and the JCK show (USA). Such trade shows are an excellent way to learn about the market, both in terms of pricing, as well as designs and industry trends.
At most trade shows, you will encounter a wide range of goods of all qualities. A common misconception is that rubies are always more valuable than the more readily available stones, such as tourmaline, garnet or topaz. If you spend enough time looking around the shows, you will find this is not always true. A poor-quality ruby is a poor-quality ruby, and a fine-quality rubellite tourmaline or tsavorite garnet will certainly be worth considerably more. Quality is the decisive factor, not just the particular type of gem.
There are two main ways for the novice to learn about colored stone pricing. The first, and perhaps best, is to visit as many gem wholesalers as possible. Wholesalers may be visited at trade shows or via appointments at their offices. During these visits, be sure to take mental notes on the prices of selected goods (blue sapphire, ruby or whatever happens to interest you). As you move from one wholesaler to another, try to compare prices of the same relative size and quality, in order to develop a feel for the current price range of those items. The key word here is 'range'. Three or four wholesalers may offer 1 ct medium-quality sapphires or rubies at similar prices, but it is unlikely that their prices will be exactly the same (for instance, one dealer might have contacts with a particular mine or rough dealer).
Trade publications such as the Guide (USA) and Rapaport (USA) may provide information on prices for colored stones and diamonds. As you collect and sort this information, be aware that it is subject to change over periods of years, months, or even weeks, depending on market trends or supply and demand.
- If designated 'trade only', prices are generally at the wholesale level.
- If open to the public, prices are often lower than retail, but not at a wholesale level.
In order to get into a trade-only show, one must have some form of identification (e.g., a business card with connections to the jewelry trade or some other proof that you are in the gem trade). For some fairs, a business card alone is not sufficient, and your company may have to be listed and rated in a trade directory for that particular country.
At the Tucson show, exhibitions and seminars take place simultaneously across the whole city, making it the largest colored stone show in the world. Nearly every hotel in the city has a gem show in their convention halls, as well as dealers selling gems and jewelry from their hotel rooms. Other important shows include the Bangkok Gem & Jewelry show, the Hong Kong show, Basel Fair (Switzerland) and the JCK show (USA). Such trade shows are an excellent way to learn about the market, both in terms of pricing, as well as designs and industry trends.
At most trade shows, you will encounter a wide range of goods of all qualities. A common misconception is that rubies are always more valuable than the more readily available stones, such as tourmaline, garnet or topaz. If you spend enough time looking around the shows, you will find this is not always true. A poor-quality ruby is a poor-quality ruby, and a fine-quality rubellite tourmaline or tsavorite garnet will certainly be worth considerably more. Quality is the decisive factor, not just the particular type of gem.
There are two main ways for the novice to learn about colored stone pricing. The first, and perhaps best, is to visit as many gem wholesalers as possible. Wholesalers may be visited at trade shows or via appointments at their offices. During these visits, be sure to take mental notes on the prices of selected goods (blue sapphire, ruby or whatever happens to interest you). As you move from one wholesaler to another, try to compare prices of the same relative size and quality, in order to develop a feel for the current price range of those items. The key word here is 'range'. Three or four wholesalers may offer 1 ct medium-quality sapphires or rubies at similar prices, but it is unlikely that their prices will be exactly the same (for instance, one dealer might have contacts with a particular mine or rough dealer).
Trade publications such as the Guide (USA) and Rapaport (USA) may provide information on prices for colored stones and diamonds. As you collect and sort this information, be aware that it is subject to change over periods of years, months, or even weeks, depending on market trends or supply and demand.
Treated Topaz
In most respects, topaz is an excellent gem. Its one real defect is an easy cleavage parallel to the basal plane. As a result, durability is fair, even though the hardness is eight on the Moh’s scale. There is a clear distinction in quality and value between the different colors in topaz.
The color of most pink topaz is produced by heat treatment of sherry brown material. Such stones are termed pinked or fired. The resulting color is stable. Over 99% of all blue topaz sold today is the product of treatment. Pale blue or colorless material is irradiated, turning it brown. Then it is heat treated to induce a handsome blue (stable) or green (unstable) color. Depending upon the type of treatment used, light to medium aquamarine-like blue is produced, as well as deep 'Super' and 'Swiss' blues not met with in nature. Also note that a fair percentage of brown topaz (and possibly other colors) has resulted from natural irradiation. Much brown topaz fades on exposure to sunlight.
Coated topaz is becoming popular in the gem industry because of its availability in a wide variety of colors such as blue to green, pink, orange, and in multi-colors. The stones are attractive but most colors are produced by dyeing or sputtering method, and can be easily removed. Some of the coatings, especially pink deceived many experts because the coatings were on the pavilion. In the gem testing laboratory analytical tests are usually performed on the table, but when analyzed from the side the coatings are easily detected.
There is another type that produces green and blue colors, which is perceived to be a different type of diffusion process than simple coating. The colors may not be that easy to remove by scratching or exposure to acetone, but immersion in hydrofluoric acid may cause discoloration. The experts believe that green-coated topaz by immersion in hydrochloric acid and hydrofluoric acid for an hour or more may dissolve the coating. The result (s) from laboratory experiments and proper analysis suggests that diffusion of chemical elements into the topaz may not have occurred, instead some chemical reaction between the topaz and coating may have taken place to prevent the easy removal of colors. Gem treatment identification is a logical process of deduction or alternatively of elimination. Obviously the first step is to look at the stone and note its color and other visually determinable properties followed by more complex and time consuming steps. With analytical instruments, color causing elements can be easily detected with reference samples and data without any destructive tests.
As usual, the colored stone industry will always encounter new and more durable surface coating techniques because consumers want new colors at an affordable price. If in doubt always consult a reputed gem testing laboratory.
The color of most pink topaz is produced by heat treatment of sherry brown material. Such stones are termed pinked or fired. The resulting color is stable. Over 99% of all blue topaz sold today is the product of treatment. Pale blue or colorless material is irradiated, turning it brown. Then it is heat treated to induce a handsome blue (stable) or green (unstable) color. Depending upon the type of treatment used, light to medium aquamarine-like blue is produced, as well as deep 'Super' and 'Swiss' blues not met with in nature. Also note that a fair percentage of brown topaz (and possibly other colors) has resulted from natural irradiation. Much brown topaz fades on exposure to sunlight.
Coated topaz is becoming popular in the gem industry because of its availability in a wide variety of colors such as blue to green, pink, orange, and in multi-colors. The stones are attractive but most colors are produced by dyeing or sputtering method, and can be easily removed. Some of the coatings, especially pink deceived many experts because the coatings were on the pavilion. In the gem testing laboratory analytical tests are usually performed on the table, but when analyzed from the side the coatings are easily detected.
There is another type that produces green and blue colors, which is perceived to be a different type of diffusion process than simple coating. The colors may not be that easy to remove by scratching or exposure to acetone, but immersion in hydrofluoric acid may cause discoloration. The experts believe that green-coated topaz by immersion in hydrochloric acid and hydrofluoric acid for an hour or more may dissolve the coating. The result (s) from laboratory experiments and proper analysis suggests that diffusion of chemical elements into the topaz may not have occurred, instead some chemical reaction between the topaz and coating may have taken place to prevent the easy removal of colors. Gem treatment identification is a logical process of deduction or alternatively of elimination. Obviously the first step is to look at the stone and note its color and other visually determinable properties followed by more complex and time consuming steps. With analytical instruments, color causing elements can be easily detected with reference samples and data without any destructive tests.
As usual, the colored stone industry will always encounter new and more durable surface coating techniques because consumers want new colors at an affordable price. If in doubt always consult a reputed gem testing laboratory.
Tuesday, June 05, 2007
The Way We Are
Memorable quote (s) from the movie:
Hubbell Gardner (Robert Redford): People are more important than their principles.
Katie Morosky Gardner (Barbara Streisand): People are their principles.
Hubbell Gardner (Robert Redford): People are more important than their principles.
Katie Morosky Gardner (Barbara Streisand): People are their principles.
Recent Trends In World Gem Production
There are no reliable statistics on gemstone production for many reasons, but Thomas Yager has compiled nearly-accurate statistics on the state of the global colored stone gemstones production.
Thomas R Yager (US Geological Survey) writes:
Estimates of world colored gemstone production are inherently difficult because of the fragmentary nature of the industry, the lack of government oversight in many countries where colored gemstones are mined, and the wide variation in quality of the production. Therefore, global production figures for colored gemstones have not been published previously by the USGS, although data are available for some individual countries.
Based on government data, company reports, and a review of the colored gemstone mining literature, the overall emerald, ruby, sapphire, and tanzanite production from 1995 to 2004 have been estimated. Amethyst and garnet production figures for selected countries also have been compiled.
Global emerald production increased from about 3600 kg in 1995 to 5900 kg in 2004; output rose in Colombia, Brazil, Madagascar, and Zambia. Colombia’s status as the world’s leading emerald produced was challenged by Brazil and Zambia. Brazil’s emerald production increased sharply because of the development of large-scale mechanized mines.
World ruby production is also estimated to have increased, from about 4400kg in 1995 to 9100kg 2004. This increase was primarily attributable to greater production in Kenya, which tends to mine cabochon grade ruby. Production declines in Myanmar and Tanzania were reversed in 2001 and 2004, respectively. Madagascar’s ruby output increased because of the discovery of the Andilamena and Vatomandry mining areas.
Global sapphire production is estimated to have declined from about 26200 kg in 1995 to 22600 kg in 2004 as production increases in Madagascar and Sri Lanka were more than offset by decreases in Australia and Tanzania. In Australia, large-scale mining operations shut down or reduced output because of the depletion of near surface deposits by artisanal and small scale miners. In Madagascar, the discovery of sapphire at IIakaka and Sakaraha led to substantial increases in production from 1998-2000, but output has declined in 2003-2004. Sri Lanka’s production of geuda increased in 2003-2004.
Tanzanite produced declined from about 6500 kg in 2002 to 3100 kg in 2004 because of a lack of new deposits being discovered and higher costs associated with the increasing depths of small-scale mines in Blocks B and D at Merelani; cutbacks in production have not been offset by mechanized mining in Block C.
Gem production has shifted rapidly between countries and within countries in recent years. With the depletion of near-surface alluvial deposits, colored gemstone mining is likely to shift from small-scale to large-scale operations.
Thomas R Yager (US Geological Survey) writes:
Estimates of world colored gemstone production are inherently difficult because of the fragmentary nature of the industry, the lack of government oversight in many countries where colored gemstones are mined, and the wide variation in quality of the production. Therefore, global production figures for colored gemstones have not been published previously by the USGS, although data are available for some individual countries.
Based on government data, company reports, and a review of the colored gemstone mining literature, the overall emerald, ruby, sapphire, and tanzanite production from 1995 to 2004 have been estimated. Amethyst and garnet production figures for selected countries also have been compiled.
Global emerald production increased from about 3600 kg in 1995 to 5900 kg in 2004; output rose in Colombia, Brazil, Madagascar, and Zambia. Colombia’s status as the world’s leading emerald produced was challenged by Brazil and Zambia. Brazil’s emerald production increased sharply because of the development of large-scale mechanized mines.
World ruby production is also estimated to have increased, from about 4400kg in 1995 to 9100kg 2004. This increase was primarily attributable to greater production in Kenya, which tends to mine cabochon grade ruby. Production declines in Myanmar and Tanzania were reversed in 2001 and 2004, respectively. Madagascar’s ruby output increased because of the discovery of the Andilamena and Vatomandry mining areas.
Global sapphire production is estimated to have declined from about 26200 kg in 1995 to 22600 kg in 2004 as production increases in Madagascar and Sri Lanka were more than offset by decreases in Australia and Tanzania. In Australia, large-scale mining operations shut down or reduced output because of the depletion of near surface deposits by artisanal and small scale miners. In Madagascar, the discovery of sapphire at IIakaka and Sakaraha led to substantial increases in production from 1998-2000, but output has declined in 2003-2004. Sri Lanka’s production of geuda increased in 2003-2004.
Tanzanite produced declined from about 6500 kg in 2002 to 3100 kg in 2004 because of a lack of new deposits being discovered and higher costs associated with the increasing depths of small-scale mines in Blocks B and D at Merelani; cutbacks in production have not been offset by mechanized mining in Block C.
Gem production has shifted rapidly between countries and within countries in recent years. With the depletion of near-surface alluvial deposits, colored gemstone mining is likely to shift from small-scale to large-scale operations.
The Gulf Perspective
Amit Dhamani is a well-known and influential figure in the gem and jewerly circle in the Middle East. He is an insider and knows the pulse of the business. His opinions are invaluable.
Amit Dhamani (MD, Dhamani Jewels, Dubai, UAE) writes:
The Gulf region, comprised of the United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman, is one of the fastest rising commercial centers on the global map. The state of Dubai, in the UAE, has embarked on an aggressive growth strategy by liberalizing its economy and reaching out to global partners in many key industries, making it the gateway to the Gulf. With gross domestic product (GDP) growth of 9.4% last year, the second highest in the world, Dubai has become a major upscale tourist and business destination for travelers from Europe, Russia, India, and neighboring Asian countries.
More than 120 shipping lines and 105 airlines connect Dubai to 145 + global destinations. Supported by a superior transportation, telecommunications, and finance infrastructure, Dubai is well equipped to manage some of the world’s most sophisticated and ambitious projects to date.
Liberal tax and property ownership laws have attracted wealthy expatriates, creating a business boom. Out of a population of 1.2 million, 60% are from 140 different nations. Fueled by oil and the booming real estate and retail sectors, the region has one of the world’s highest per capita incomes; coupled with the growth of tourism and the population’s affinity for gems and precious metals, its jewelry market has grown at a faster rate than anywhere else in the world. Jewelry sales reached $15 billion in the Gulf countries last year, of which diamond jewelry sales accounted for $3.5 billion; these figures are growing by leaps and bounds.
In Dubai alone, estimated retail jewelry sales were $3billion last year, with half of this for diamond jewelry. The average per capita jewelry sale was $2500, the world’s highest by far. With approximately 850 retail jewelry outlets in Dubai at present, and tourists accounting for 54% of jewelry purchases, these figures are bound to continue rising in the future; it is estimated that 40 million tourists will be visiting this region by 2015, up from 9 million presently.
Consumers in the Gulf region tends to prefer diamonds in all shapes at 0.50 ct and above, usually D-I color and VVS-SI clarity ranges, with certificates from international labs. Diamond watches are quite popular, especially international brands. As with many other major markets, the favored colored stones are emeralds, rubies and sapphires. Among the many retailers already operating in the Gulf countries are world renowned houses such as Tiffany, Cartier, Bulgari, De Beers, Chopard, Dhamani, and Damas.
With the establishment of the DMCC (Dubai Multi Commodities Center), the Dubai Gold and Commodities Exchange, the Dubai Diamond Exchange, the Dubai Gem Certification, and the Dubai Cut Diamond, Dubai has become a major global player. DMCC is the arm of the Government of Dubai that is helping create market opportunities for all businesses. To date, 850 international companies have listed with the DMCC. The 64-floor Al-Mas Tower, which is scheduled form completion by the end of 2007, is solely dedicated to diamond traders, local and international. All told, Dubai’s jewelry retail space is expected to triple in the next five years.
Dubai also hosts international jewelry shows and exhibitions year-round, with the ICA congress set to be held there in 2007.These events serve as yet another platform for international jewelry companies to make their way into this market.
With new developments taking place at a rapid pace, Dubai and the Gulf hold enormous growth potential for all international businesses. Dubai welcomes the world’s gem and jewelry industry to be a part of history in the making.
Amit Dhamani (MD, Dhamani Jewels, Dubai, UAE) writes:
The Gulf region, comprised of the United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman, is one of the fastest rising commercial centers on the global map. The state of Dubai, in the UAE, has embarked on an aggressive growth strategy by liberalizing its economy and reaching out to global partners in many key industries, making it the gateway to the Gulf. With gross domestic product (GDP) growth of 9.4% last year, the second highest in the world, Dubai has become a major upscale tourist and business destination for travelers from Europe, Russia, India, and neighboring Asian countries.
More than 120 shipping lines and 105 airlines connect Dubai to 145 + global destinations. Supported by a superior transportation, telecommunications, and finance infrastructure, Dubai is well equipped to manage some of the world’s most sophisticated and ambitious projects to date.
Liberal tax and property ownership laws have attracted wealthy expatriates, creating a business boom. Out of a population of 1.2 million, 60% are from 140 different nations. Fueled by oil and the booming real estate and retail sectors, the region has one of the world’s highest per capita incomes; coupled with the growth of tourism and the population’s affinity for gems and precious metals, its jewelry market has grown at a faster rate than anywhere else in the world. Jewelry sales reached $15 billion in the Gulf countries last year, of which diamond jewelry sales accounted for $3.5 billion; these figures are growing by leaps and bounds.
In Dubai alone, estimated retail jewelry sales were $3billion last year, with half of this for diamond jewelry. The average per capita jewelry sale was $2500, the world’s highest by far. With approximately 850 retail jewelry outlets in Dubai at present, and tourists accounting for 54% of jewelry purchases, these figures are bound to continue rising in the future; it is estimated that 40 million tourists will be visiting this region by 2015, up from 9 million presently.
Consumers in the Gulf region tends to prefer diamonds in all shapes at 0.50 ct and above, usually D-I color and VVS-SI clarity ranges, with certificates from international labs. Diamond watches are quite popular, especially international brands. As with many other major markets, the favored colored stones are emeralds, rubies and sapphires. Among the many retailers already operating in the Gulf countries are world renowned houses such as Tiffany, Cartier, Bulgari, De Beers, Chopard, Dhamani, and Damas.
With the establishment of the DMCC (Dubai Multi Commodities Center), the Dubai Gold and Commodities Exchange, the Dubai Diamond Exchange, the Dubai Gem Certification, and the Dubai Cut Diamond, Dubai has become a major global player. DMCC is the arm of the Government of Dubai that is helping create market opportunities for all businesses. To date, 850 international companies have listed with the DMCC. The 64-floor Al-Mas Tower, which is scheduled form completion by the end of 2007, is solely dedicated to diamond traders, local and international. All told, Dubai’s jewelry retail space is expected to triple in the next five years.
Dubai also hosts international jewelry shows and exhibitions year-round, with the ICA congress set to be held there in 2007.These events serve as yet another platform for international jewelry companies to make their way into this market.
With new developments taking place at a rapid pace, Dubai and the Gulf hold enormous growth potential for all international businesses. Dubai welcomes the world’s gem and jewelry industry to be a part of history in the making.
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