Colombian emeralds: why there is a shortage – Sectors – Economy

He emerald carat cost Colombian, the most coveted by foreign investors for its quality, purity and color, is triggered by the high demand left by the covid-19 pandemic and the low supply due to the fact that in some areas of the country the extraction of the gem is paralyzed due to the lack of environmental licenses and exploitation titles, among other problems that the miners allege.

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Some of them point out that there are many “cuts” paralyzed due to issues of environmental licenses that have not wanted to be issued, since the Government has intensified the requirements to grant them, and that has impacted the supply of emeralds in the trade.

Until a year ago about 1,040 mining titles were valid for the extraction of this mineral in Colombia and 486 applications were pending, according to the National Mining Agency (ANM)entity that until the closing of this edition did not give a reason for how many of those requests were approved.

“The little emerald that is available on the market is being monopolized by the United States and Asia,” warned a trader in the sector, who says that they are buying any stone that goes on sale regardless of its size, for which they are asking millions of dollars. pesos

He also said that a stone of about 1.25 carats of very good quality and color, which could well cost 5 or 7 million pesos before, today they are asking for up to 25 million and more.

Opinion shared by Alejandro Amelines, spokesperson for fury gemsDubai-based mining company of Arab origin, which has operated the Coscuez mine west of Boyacá since 2018.

The manager maintains that “the pandemic also affected the mining sector a lot. As the emerald is not a commodity (raw material), like coal or gold, but a luxury item, during this juncture many people stopped investing in precious stones, even the largest jewelry houses in the world, such as Cartier, Tiffany and Bulgari”.

But I warn you that, since last year, you began to see that not only the appetite for the Colombian emerald returned, but that at this time, worldwide, there is a shortage of the stone, which has made the demand greater than the supply and prices have been boosted by this situation.

The production

In addition to Colombia, countries like Zambia, Brazil, and Afghanistan have emerald mines; nevertheless, Colombians are the most appreciated and valued in the world for their qualityto the point that it is estimated that the country represents 95 percent of the world market for this stone.

According to figures from Dane, the value of exports of emeralds (cut and rough) reached 129 million dollars, a value lower than the 142 million registered in 2015.

Calculations by the Ministry of Mines indicate that in 2021 the extraction of emeralds in Colombia was around 1.7 million carats, while a year ago 1.5 million were achieved, although the ANM estimates the production for 2020 at around 1. 6 million carats, which was expected to increase with the investments made by Colombian and foreign companies.

Only Fura Gems invested 100 million dollars in Coscuez and projected a similar figure in the coming years to continue promoting that mine in which they hope to have some 2,000 people working, after having received it with just seven workers.

Traders in the sector agree that this is a difficult market because some illegality still persists, especially in the stone trade, despite greater regulation and control, hence the issue of figures is not very precise.

The problem is that for this particular market, unlike what happens with gold, silver and platinum, among others, whose prices are governed by specific variables, such as their weight and grade (purity), the emerald has a particularity that is valued according to the criteria of the buyer.

“After the pandemic and due to the great existing demand, we can speak of a 20 to 40 percent increase in the cost per carat of all stone qualities,” insists Amelines, for whom the sector is clearly recovering. , while the market is always asking for many more carats, much more quality and quantity and that is something that the Coscuez mine has.

highly regulated mining

Unlike in the past, when the emerald market experienced an acute crisis for the control of the territories and the mines that produce the precious stone, today, without this problem having been completely banished, it is not what most hinders the extraction of the gem in the country.

The strong regulation imposed by the Government, especially in environmental matters, makes production and exportation continue to be complicated.

“At the moment, mining is a highly regulated activity and one of the strong aspects is environmental,” explains the director of Fura Gem.

He says that they have said license, which is almost 95 percent of the most important requirement that they had, since 2021 and to access this it was hard, complex work, because the Regional Autonomous Corporation (CAR) It is very demanding with respect to the operating requirements.

“We showed from a technical point of view what our operation was like, how we would conserve the forests, the fauna, the protection of the water currents and we complied with this, the license was obtained,” he specified.

This is just one of the factors that international buyers are looking at, that emerald producers comply with and respect environmental standards.

Today, according to the merchants consulted, a large buying house like Cartier requires that the emeralds have traceability, that is, that their producers comply with all the country’s regulations, that they are the product of a legal operation, that the companies have corporate social responsibility, that there are benefits for the communities of influence and that throughout the process there is no labor abuse, far from it, child labor, for this reason, they constantly visit the mines to make sure that this does not exist.

“I would say that very few companies in the country fully comply with all these requirements. Colombia has many emerald titles, but saying that a company has a license, a concession contract and also a sustainability and social responsibility program is less and less. Clients prefer to pay a little more for an emerald, but that they guarantee all those requirements and the legal origin of the stones”, pointed out Amelines.