• Industry Analysis: Tucson Buying Exceeds Expectations
• From Gems & Gemology: First International Pearl Convention
• GIA Announces New Southern Africa Lab, Leadership
• Tucson 2008: Awards, On-Site Lab and Alumni Auction, Party Take the Spotlight
• Don't Miss GIA's Next Alumni Trip
• From GIA Education: Use a Computer to Enhance Your Jewelry Design Process
• Reserve Your Seat in One of GIA's Lab Classes

Industry Analysis: Tucson Buying Exceeds Expectations

Business at the Tucson gem shows exceeded expectations -- greatly, in many cases -- despite the double problems of a looming recession and high prices. The sudden Chapter 11 bankruptcy of the 20-store Fortunoff chain also created concern among buyers and exhibitors.

The cost of gold, which hovered around $940/ounce during the shows, and the weak U.S. dollar -- which fell even against currencies to which it's normally stable, such as the Israeli shekel, Indian rupee and Australian dollar -- tacked on de facto surcharges of 15-30%, exhibitors said.

"There were no bargains anywhere despite the economy," said one California retailer. "But we just have to accept it."

Retailers bought despite forecasts of a slow year because high-ticket sales still appear strong, and those who attended the shows believe their customers will pay the premiums top-quality gemstones command.

Exhibitors at the Centurion Show, a niche event for higher-end manufacturers held at the Westin La Paloma Resort, found retailers waiting with orders in hand.

"Many independent retailers had a pretty good year, even if Christmas was disappointing," explained one diamond jewelry manufacturer. "They came here looking for something distinctive, not found on the Internet, that they could show their customers."

Exhibitors at both the American Gem Trade Association (AGTA) and Gem and Lapidary Dealers Association shows reported that traffic was down and that a number of chains and buying groups did not send buyers this year.

Those who came, however, came to buy, not look, they said.

One luxury retailer noted that he had raised a lot of cash by marking down old inventory and "blowing it out" to make way for new products to offer his customers.

Diamond jewelry and designer pieces ruled the business at Centurion in part because they were the least affected by the dollar's decline. Although colored diamonds were popular at that show in the past, fancy pink or yellow melee and pavé goods all but disappeared this year because of the extreme prices such diamonds now command.

"We couldn't compromise on the color, and there was no way we could go smaller in size [than melee], so we just had to suspend our production of these pieces for now," said one manufacturer.

Exhibitors also found business pleasantly surprising at AGTA and the Gem & Jewelry Exchange (GJX). Again, the higher end was the most active. There were many more cultured pearls -- including extremely high-quality Chinese freshwaters -- than previous years because they remain very popular with consumers.

In contrast, gold jewelry -- particularly larger pieces -- proved a difficult sell because prices were 60% higher than the previous year and many retailers believed they were well beyond their customers' willingness to pay.

One Centurion exhibitor showing a large matte 18K gold necklace noted that he'd sold several similar pieces last year in the $8,000 range. "This year, it's $12,000, and nobody's going for it."

DIAMONDS: The Third International Rough Diamond Conference, held Feb. 11-12 in Tel Aviv, Israel, featured speakers from small- and medium-sized diamond mining companies who reported that a revolution was taking place in diamond production. During the past five years, dozens of such firms have sprung up in Canada and southern Africa to work diamond deposits deemed too small to attract the interest of large firms like De Beers and Rio Tinto. The vast majority of these projects yield relatively small quantities of high-value gems.

One of the most successful, Gem Diamonds, was formed in 2005 to refurbish the Letseng mine in Lesotho. CEO Clifford Elphick said the venture has been rewarded with numerous diamonds over 100 carats. The revenues have made it possible for the company to purchase several other properties deemed marginal by larger firms, such as Australia's Ellendale Mine, which yields small amounts of high-color fancy yellow diamonds.

Meanwhile, South Africa's Petra Diamonds is developing several smaller operations in Angola, said president Adonis Pouroulis, who noted the firm is in the process of buying several older De Beers operations -- most significantly the historic Cullinan mine, which De Beers had been running at a loss.

In Canada, noted Stornoway Mining CEO Eira Thomas, larger mining companies have long overlooked small- and medium-sized deposits because they could not operate them profitably. She and other smaller-company executives said that the key to making them profitable was having a much smaller corporate infrastructure and focusing on deposits that are both high value and not so remote that they require specially constructed power stations and roadways.

Representatives of African mining nations reaffirmed their commitment to developing diamond resources in ways that benefit local populations.

Samuel Sam-Sumana, vice president of Sierra Leone, said his country has written a "new page" in developing its diamond resources with a recently enacted package of "transparent and open mining laws that encourage participation from international mining companies."

Namibia's diamond commissioner, Kennedy N. Hamutenya, noted that his country favors a careful approach toward local diamond cutting operations. "We want to concentrate on a few successful cutting operations rather than allow many companies that may have difficulty," he said.

He also said Namibia seeks companies that will fully polish diamonds in the country, instead of partially cutting them and sending them elsewhere for finishing.

Russell Shor
Senior Industry Analyst

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Figure 1. These natural pearls, shown on a shell from the host Pinctada radiata, were recovered from the Persian Gulf. Photo by Nicholas Sturman.

Figure 2. These 8+ mm cultured pearls were harvested in 2007 from the Sea of Cortez, Mexico. Photo by Douglas McLaurin.

From Gems & Gemology: First International Pearl Convention

Emmanuel Fritsch of the University of Nantes (France) and Stefanos Karampelas of the University of Thessaloniki (Greece) attended the First International Pearl Convention in Abu Dhabi, United Arab Emirates (UAE), Nov. 19-20, 2007. Following is their report on some of the highlights:

Organized by the Dubai-based Pearl Revival Committee to raise the profile of natural pearls from the Persian Gulf (referred to locally as the "Arabian Gulf") and to discuss related issues, the conference included a seminar dedicated to technical issues and a summit focused on production and marketing.

Technical Seminar
Kenneth Scarratt (GIA Thailand) described the wide variety of mollusks that can produce pearls and argued that the term "pearl" should be applied to both nacreous and non-nacreous materials, such as conch pearls. He also told participants to "keep their minds open" to the theory that pearls may nucleate on a grain of sand, and displayed X-radiographs of pearls with minuscule shells in their centers. Elisabeth Strack (Hamburg, Germany) pointed out that natural freshwater pearls come from numerous locations, including lesser-known ones such as northwest Russia. She also discussed terminology and taxonomy issues (e.g., the vast majority of pearl "oysters" are actually not classified biologically as oysters). Shigeru Akamatsu (Mikimoto & Co., Tokyo) reviewed the history of pearl culturing. Among other issues, he discussed the present status of the Japanese akoya product, which is suffering from "red tides" and over-warm water temperatures. He said there are plans to move to a smaller but higher-quality production, mostly by limiting the number of pearl farms and number of shells under cultivation to reduce stress on the animals.

Nicholas Sturman (Gem & Pearl Testing Laboratory, Bahrain) reviewed pearl testing techniques, saying he prefers X-ray luminescence over measuring manganese content to separate freshwater from saltwater pearls. He also reminded the audience that production of natural pearls in the Persian Gulf (figure 1) is quite small today, with pearl fishing more a hobby than a commercial enterprise. Stephen Kennedy (Gem Testing Laboratory of Great Britain, London) reviewed pearl treatments and their detection, noting that some "chocolate" pearls, for example, are created by the bleaching and subsequent dyeing of gray-to-black pearls.

These contributors pointed out the importance of unsubstituted, short, polyacetylenic molecules ("polyenes") in the coloration of freshwater cultured and many other pearls, rather than carotenoids, which are found only in the pen-shell pearls of the genus Pinna. Sutas Singbamroong (Dubai Gemstone Laboratory, UAE) presented a preliminary study of Persian Gulf natural pearls, which are mainly small, white-to-"cream" colored (with about 2-3 percent yellow), and grow in a variety of shapes.

The technical seminar concluded with a panel discussion on how pearl certification can help the industry. Among other issues, the point was made that nacre quality is as important as nacre thickness. Lower-quality nacre can be recognized by its chalkier appearance, the defects it induces around drill holes and the presence of thicker-than-average conchiolin layers just beneath the surface, as seen in X-radiographs.

Production
A number of speakers addressed pearl production. Daniele Naveau (Robert Wan, Tahiti) discussed efforts to reduce the number of Tahitian farms in order to increase quality, in particular to ensure that nacre thickness exceeds 0.8 mm. Enrique Arizmendi (Perlas del Mar de Cortez, Guaymas, Mexico) described the history of natural pearl production in the Sea of Cortez, Mexico, which ended in 1914. Current efforts with the Pteria sterna have resulted in annual production of about 3.5 kg of multicolored cultured pearls (figure 2).

Three presenters addressed the incredible boom in Chinese freshwater cultured pearls: Shi Hongyue (Gems and Jewellery Trade Association of China), Dr. Qiu Zhili (SunYat-sen University, Guangzhou), and He Naihua (China's World Pearl Association). Production has risen from the first 0.61 kg of whitish "rice krispies" from Cristaria plicata in 1971 to the current 1,500 tons of larger, often colored cultured pearls from the Hyriopsis genus (an increase of more than a million-fold). Only about 5 percent of the cultured pearls are gem grade, and rounds represent less than 10 percent of the production. During the summit, Chinese delegates displayed several round white-to-purple freshwater cultured pearls of modest luster but very large size, about 17 mm. There is also a small production of saltwater cultured pearls from the Pinctada martensii (but the nacre is thin, 0.2-0.6 mm) and mabé from the Pteria penguin.

Stephen Arrow (Arrow Pearls, Broome, Western Australia) presented the history and current status of large South Sea cultured pearls from Pinctada maxima on the northwestern Australian coast. Good-quality rounds do not exceed 21 mm in diameter and require about six years of cultivation. Sarkis Hajjar (Belpearl, Antwerp, Belgium) discussed the culturing of pink-to-purple freshwater pearls in Lake Kasumiga, Japan, based on the hybrid Hyriopsis cumingii x H. schlegelii. About 10 kg of such pearls are produced annually, with other cultivation sites currently being sought.

Economics and Marketing
Both speakers on economics and marketing lamented the lack of reliable statistics for pearl jewelry and the industry. Tawfique Abdullah (Dubai Gold & Jewellery Group) regretted the poor communication between producers, manufacturers and retailers, and argued for harmonization of standards among the various producing regions. He added that the pearl industry spends less than one percent of the production value on promotion, as compared to the 20-40 percent spent by other luxury goods. Naheed Anees (ARY Academy of Gems & Jewelry, Dubai) pointed out that the Gulf Cooperation Council countries represent 9 percent of the world's jewelry market, and that per capita jewelry consumption in UAE is about 20 times the world's average. She recommended developing programs to educate consumers about pearls, in particular about imitations, which are still common in the Middle Eastern market. She also proposed developing effective marketing techniques to show that pearl jewelry is no longer "old-fashioned," but rather can be innovative as well as inexpensive.

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Marie-Josée Trépanier, GIA managing director, Southern Africa. Photo by Kevin Schumacher.

GIA Announces New Southern Africa Lab, Leadership

Johannesburg Lab to Open Feb. 21
GIA South Africa, GIA's new laboratory in Johannesburg, will officially open for business Feb. 21. Tom Moses, senior vice president, GIA Laboratory and Research, said launching the GIA Laboratory in Johannesburg has been a top priority for the Institute.

"GIA is moving quickly to bring its services to our global clients," Moses said. The Lab will initially provide GIA Diamond Dossiers^®, which cover stones ranging from 0.15 carats up to 1.99 carats, and is introducing a new GIA diamond fee schedule to reflect current GIA fees as converted to the South African rand currency.

The GIA Lab in Johannesburg will accept any size diamond, colored stone or pearl from GIA clients in the region. For any service other than the Diamond Dossier report, items can be delivered to the Lab and will then be sent to one of its other laboratories for service and returned to Johannesburg for customer pickup. GIA has also been granted a VAT exemption so these services will not be subject to the traditional fee for shipping stones outside of South Africa.

"GIA is very excited to begin participating as fully as we can in the industry in this region, and will eventually offer classes, seminars, scholarships and other aspects of the Institute here as well," Moses said.

Leslie Milner, director of the GIA Lab in Johannesburg, and an experienced team of laboratory diamond graders trained in the U.S. at the end of last year so they could be immersed in the GIA grading methods and fully aligned with the Institute's standards. A team of experienced GIA graders from the U.S. offices will join them.

"We have been learning GIA's grading methodology while working with the great array of state-of-the-art research and scientific equipment GIA has at its disposal," Milner said. "As technology advances, you need an up-to-date research facility with the expertly trained staff and resources to advance the future of the industry here in South Africa. I look forward to leading the team here at GIA."

The address for the new GIA Lab in Johannesburg is Suite 512, 5th Floor, S.A. Diamond Centre, 225 Main Street, Johannesburg 2001. The mailing address is P.O. Box 1756, Houghton, 2041, South Africa. The hours are 8 a.m. to 4 p.m., Monday to Friday.

The general phone number is (011) 27 11 334-2744, and the fax number is (011) 27 11 334-0932.

Trépanier Named Managing Director, Southern Africa
Marie-Josée Trépanier, who has an extensive background in international management and law, has been named managing director of GIA Southern Africa (South Africa and Botswana).

"Marie-Josée offers a solid combination of legal, financial and operational skills demonstrated throughout her career in various executive and leadership roles," says Donna Baker, president of GIA. "She brings an incredible wealth of knowledge about regional and global areas of business to GIA."

Working in coordination with GIA corporate management, Trépanier will be responsible for providing on-site project management and in-country guidance for the setup of new facilities and support functions for Southern Africa and similar future projects. Located initially in Dubai, she will also oversee various business development projects in relation to ongoing business development.

Trépanier served most recently as chief executive officer for Polygon DMCC in Dubai, where she expanded the company's presence in Dubai, Mumbai, Hong Kong and China and coordinated all operations in the Middle Eastern, Asian and North American offices. Her background includes expertise in due diligence, market research, strategy and business planning. She holds an LLM in international business law from the London School of Economics, an LLB in law from the University of Montreal, and has served as a member of Team Canada Trade missions to China and Indonesia.

"Marie-Josée will work with a highly experienced international GIA operations team, and we are looking forward to having her join us," Baker said. "Her strong communications skills, solid professionalism and ethics have earned her the respect of colleagues around the world. She will substantially further GIA's ability to expand and fulfill our global mission of protecting the public trust in gems and jewelry."

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Tucson 2008: Awards, On-Site Lab and Alumni Auction, Party Take the Spotlight

GIA hosted a number of booths, venues and seminars at this year's Tucson Gem and Mineral Shows. Here are some of the highlights:

Karen Bonanno DeHaas, Jim Shigley, Antoinette Matlins and Kathryn Bonanno Patrizzi. Photo by Robert Weldon.

Shigley Honored

Dr. Jim Shigley, GIA distinguished Research fellow, received the Antonio C. Bonanno Award at the Accredited Gemologists Association (AGA) dinner on Feb. 6. The award, established in honor of the AGA's founder in 2000, is "a way to applaud commitment, passion and dedication to go the extra mile to make a difference in gemology," said Bonanno's daughter, Antoinette Matlins.

Shigley received the honor to recognize his "impeccable integrity, honesty and ability to say what needs to be said -- even if it goes against the popular opinion," Matlins said.

Previous winners include: Alan Jobbins, Alan Hodgkinson, C.R. Beesly, John Koivula (GIA), Robert Crowningshield (GIA), Richard Drucker, Antoinette Matlins, Henry Hanni and Shane McClure (GIA).

David Kondo, a GIA research lab technician, right, gives an overview of Lab services available to M.M. Fairooz, of MultiGems & Jewellery, based in Sri Lanka. Photo by Amanda Luke.

On-Site Lab

GIA launched its new Show Service Laboratory at the Worldwide Gem and Jewelry Show. Located at the Hotel Arizona, the set-up featured a waiting room, two client service booths and a secure laboratory space, and was fully staffed by GIA senior gemologists, managers and account and customer service representatives.

Basic colored stone identification services and Country of Origin reports were offered. The expedited services facilitated gemstone transactions that were contingent on the information supplied by a GIA Laboratory Report. Temporary reports issued at the show will be followed by an actual GIA report with photograph.

"The response was incredible as clients were waiting for the doors to open on the first day," said Donna Beaton, a supervisor of the GIA Laboratory. "Our presence allowed international clients who do not have easy access to GIA laboratories to feature their items -- complete with a GIA report."

The stones that the Lab examined were mostly of the "Big Three" (ruby, emerald and sapphire), with some unusual stones such as taaffeite and jeremejevite. Heat treatments, lead glass filling and beryllium diffusion were some of the treatments encountered in items being bought or sold at the gem shows.

The turnaround time was one day or less for examinations that could be completed with equipment at the show Lab, and two to three days for stones that required more advanced testing, such as LA-ICP-MS for detection of beryllium diffusion in corundum, at GIA Carlsbad.

Michael and Victoria Evers check out a silent auction item. Michael Evers completed the final exam to become a GIA Graduate Gemologist while he was in Tucson. Photo by Jim Wood.

Starla Turner, Barry Block, Sophie Charette, Joe DuMouchelle and Suzanne Martinez exemplify the camaraderie of the GIA Alumni Association at the dance party. Photo by Jim Wood.

Alumni Dance Party, Auction

The Alumni Association hosted its popular auction and dinner dance Feb. 8. The lounge theme, gourmet food stations and signature "Gemojito" cocktail were a big hit, according to Starla Turner, chairman of the Alumni Executive Council.

"Attendees told me that this party is the most fun they have in Tucson because it's the only time they dance," Turner said. "I think everyone feels welcome."

The event included silent and live auctions to raise money for the Alumni Endowment Fund. Highlights included a cat's eye Kornerupine and Edwardian ring, a lab-created pink diamond and more than 200 strands of Chinese freshwater cultured pearls. Check out the Alumni Association's Web site for a complete list of items.

Gary Beer faithfully attends the party and bids on auction items every year. "I'm not even in this business, but my wife is," he said. "I come for the fun."

RTL scholarship winners Christian De Bor, left, and Grant Herrin, right, with GIA President Donna Baker. Photo by Jim Wood.

RTL Scholarship Recipients

Grant Herrin, of Shreveport, Louisiana, and Christian De Bor, of Gloucester City, New Jersey, each received a 2008 Richard T. Liddicoat (RTL) Scholarship during the auction and dinner dance party.

The RTL Scholarship Fund was created by the GIA Alumni Association in 2003 to honor Liddicoat, the Institute's longtime president and chairman, who is regarded as the "Father of Modern Gemology." The fund furthers GIA and Liddicoat's mission of providing gemological education to worthy students by awarding a number of full scholarships each year in the GIA Graduate Gemologist diploma program.

"These two individuals have demonstrated a tremendous amount of conviction and drive to further their education and perfect their knowledge of gemology, thus making them the ideal representatives of the RTL Scholarship," said Donna Baker, president of GIA, during the ceremony. "We congratulate both Grant and Christian and wish them much success in their future endeavours."

Ten RTL Scholarships have been awarded since 2004.

From left: Baker, Nobuko Otsuka (who accepted the Alumni International Leadership Award for Nagayuki Chaya), Ivanne Farr and Rose McKenna, Alumni Relations manager. Photo by Jim Wood.

Alumni Award Winners

The Alumni Association also announced the recipients of its new international awards during the auction and dinner dance. The awards honor an alumni member and officer for their leadership, commitment to continuing education, ethics and professionalism.

Ivanne Farr, of the Virgin Islands-Caribbean chapter, received the 2007 Alumni International Leadership Award and Nagayuki Chaya, of the Asia-Japan chapter, received the 2007 International Acheivement Award.

Alumni chapters worldwide chose leadership and achievement award winners earlier in the year; they were also recognized at the dinner. A complete list of winners is available on the GIA Alumni Association Web site.

Tucson Green Gemstone Challenge
GIA Education staff offered visitors a chance to guess the identity of five green gemstones on display at its booth. Participants were only able to use their visual expertise to name the stones.

For those left wondering, the correct identities are:

1. Synthetic emerald
2. Glass
3. YAG
4. Fluorite
5. Emerald 

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Don't Miss GIA's Next Alumni Trip

Join the GIA Alumni Association as it travels to the Pacific Rim Sept. 6-18 to explore the lands where some of the finest and most lustrous cultured pearls are grown. Go behind the scenes for experiences that only GIA can provide in the world of cultured pearl farming, manufacturing and distribution, including:

• A stop at Flower Island in the Philippines for a three-day cultured pearl farming experience led by Jewelmer International, a leading producer of South Sea cultured pearls.
• A tour of Mikimoto Island in Japan to see the pearling operation, museum and gift shop, and a visit to Tasaki Shinui Company and The K. Otsuki Pearl Company.
• A visit to Chinese cultured pearl farms and processing factories and a tour of China Pearl and Jewellery City, a modern-day jewelry marketplace.
• A fitting end to the trip at the Hong Kong Jewellery & Watch Fair.

The price -- not including airfare -- is $4,603 per person, based on double occupancy; $5,859 for a single. Space is limited, so don't miss this once-in-a-lifetime opportunity.

Registration begins Tuesday, Feb. 19.

Details and the registration form are available at www.protravelinc.com/gia2008.html. Secure your space by sending your non-refundable $500 check and a completed registration form to Protravel International. Phone reservations will not be accepted.

Contact Nancy Porras Knight at Protravel International for more information:
    E-mail: nancyk@protravelinc.com
    Phone: (310) 691-7425 or (800) 301-3993

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A student works on her design with the help of CAD/CAM. Photo by Eric Welch.

An example of a CAD/CAM design rendering. Photo by Steve Workman.

From GIA Education: Use a Computer to Enhance Your Jewelry Design Process

Computer-aided design and computer-aided manufacturing (CAD/CAM) programs are used in virtually every manmade enterprise, from designing sunglasses to plotting roadways. And jewelry designers, now more than ever, are harnessing their power to assist in product design, manufacturing and promotion.

Computer-aided technology, which got its start in the U.S. military in the 1950s when the Air Force used computer renderings to test an air defense system, was limited to only a few industries for decades. The technology spread to other engineering sectors, such as the automotive and aeronautical industries, as designers grew eager to abandon pen and paper methods of drafting.

Through the years, as software programs evolved and computers grew smaller and more affordable, CAD/CAM programs became plausible as a mechanism to design and manufacture products from less-consolidated industries -- such as apparel and landscaping.

Today, CAD/CAM has become a necessary tool in the jewelry designer's arsenal to take pieces from concept to creation. While there's no replacing the time-honored practice of hand-sketching and fabricating jewelry, many designers use computers to enhance their productivity.

GIA has offered CAD/CAM classes, with the most extensive jewelry-specific curriculum available, for almost a decade. The program features a comprehensive Lab class that takes students from zero to 60 in seven weeks. Students first learn to use the general CAD/CAM program, Rhino, which teaches the fundamentals of computer-aided design. Then they are introduced to the jewelry-specific Matrix plug-in program that has design components, like gemstones, bezels, shanks, etc. Students progress from complete novice to designing their own pieces and running the machines that create them.

GIA emphasizes the importance of the manufacturing component, including the practical considerations that are fundamental to actually creating a final product. GIA instructors draw on decades of jewelry manufacturing experience to show how pieces are constructed and review the practicalities of working with different components -- from thickness of shanks to characteristics of certain gems. They instill in their students the understanding that making models requires a clear, well-defined thought process. Designers who approach CAD/CAM jewelry design with a practical strategy are more likely to achieve results they are trying to create.

GIA instructors also show students how to use computer-aided design to generate replicas of their designs and print out the images for use in portfolios, advertising and brochures, or as a tool to show customers a piece before it's manufactured. Designers can also use these images to make sure their designs are feasible during every step of the manufacturing process.

From streamlining jewelry manufacturing to building design portfolios, CAD/CAM has revolutionized the way jewelry is designed, made and marketed.

Click here for more information on GIA's CAD/CAM classes.

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Students gain the practical experience needed to succeed in the jewelry industry in GIA's Lab classes. These classes also provide the perfect opportunity for those already established in the trade to refresh important gemological skills. GIA Lab classes offered through mid-March 2008 are as follows:

For more information, see Gemology and Jewelry Manufacturing Arts Lab class descriptions. You can also e-mail GIA Education, apply online, or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call (760) 603-4001.

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