To paraphrase Will Rogers, I never met a gemstone I didn’t like. Having said that, I really like sapphire. I remember the first time I realized that sapphire came in almost every imaginable color besides the traditional blue. I once admired a tray of variously colored stones, appreciating the wide range of vibrant colors. It surprised me to learn that all of those stones in the tray were Montana sapphires. I’ve been enamored of sapphire since then, and I hold a special appreciation for the Montana material.

Having said all of that, let me explain the reason why I related this. I have noted with interest, along with some concern, the development of the Montana sapphire industry over the past several years. In particular, I have observed the sapphire marketing efforts and the consequent results by the American Gem Corp. (AGC) of Montana. Many trade journals reported numerous accounts of the development of AGC and its endeavor to create a world market for Montana sapphires. The important issue regarding the marketability of Montana sapphire takes place within the even larger topic of the market for fancy colored sapphire.

Fancies, which I refer to as corundum with any color not blue or ruby, are produced from deposits world wide. Only recently have they commanded a respectable niche in the gem industry. Acceptance of these fancies seems to be changing as a result of factors not entirely attributable to AGC. However, AGC’s marketing efforts seem well timed to coincide with the new popularity of fancies in the industry.
As amateurs and hobbyists, why do we care whether or not Montana sapphire becomes commercially viable? We should care for one very important reason: availability.

In years past, any of the several small mining operations in southwest Montana would sell a day’s production of sapphire, fresh from the gravel beds. Nowadays, the small mines have mostly been purchased. When I last called to locate a source of mine-run material, I could not find any. I remembered that I bought a sample of heat-treated rough from Eldorado Bar in the late 1980’s for $2 per carat.

 The rough sapphire from that parcel came as clean gem material with pieces weighing four to ten carats. This year in Tucson, I saw similar material selling for $15 to $50 per carat. Cut stones now sell for $30 to $200 per carat for sizes under one carat, with substantially higher prices for larger stones listed up to $2,000 per carat. If a market really exists at such prices, this lovely material will become unaffordable for anyone except the major players in the gemstone game.

I originally planned to write a column where I reviewed the issues of AGC’s efforts to produce Montana sapphire on a large scale. I thought I would also describe how AGC planned to bring this material to a greater acceptance in the world sapphire market. I listened to the concerns voiced by others in the industry that AGC’s claims regarding sapphire reserves were not entirely documented by hard facts. If these claims rang true, then the gem industry needed to consider the premise that Montana sapphires could well become serious players in the world gem market.

However, once I began the research for this article, I realized two things. First was that in the general idea of sapphire marketing, the recent interest in fancies and their acceptance needed to be reviewed. Second, while I did discover a few facts about AGC that I found sufficiently “curious”, which warranted further scrutiny, sufficient time was not available to conduct as thorough an inquiry as fairness required. I did not want to provide such a cursory review that might jeopardize this column and lose the educational merit. Consequently, I am writing on this topic using two or more President’s columns to provide sufficient time for further investigation, as well as to provide sufficient space to further explore this issue.

Do Montana sapphires stand a chance to enter the world market competitively? The material from Montana has been known for over a century, and some of the blues have been well accepted. Sapphire from Yogo Gulch enjoys world-renown for its natural and uniform deep blue color, along with its clarity and brilliance. However, Yogos typically are small, less than one carat when cut. Yogos over one carat and greater are unusual. Several companies found the hard rock mining for Yogos often to be unsuccessful financially. (See the excellent article on Yogo mining by Mychaluk, 1995)

 Yogo mining involves underground operations restricted to a very distinct geographic area. However, most of the Montana stones are recovered from alluvial deposits along the banks of several rivers. While a good blue hue is often found, much of the sapphire material recovered consists, instead, of greenish colored material, pale and steely blues, yellows, golds, oranges, some pinks, and bi-colors.

Other than royal blue or ruby red, sapphire never has been highly prized except as collector stones. The collector market is different from the world retail market. The relatively small amount of fine blue sapphire from Montana has hampered efforts to market it, because suppliers must be able to provide a consistent availability of uniform material in calibrated sizes. There was so little interest in fancies that sales of sapphire, other than blue and ruby, never warranted monitoring. Trade journals report annual trends in gem sales. (See Colored Stone, Jan. 1997, p.563)

For example, in 1995, blue sapphire commanded the top selling seat for colored stones, while ruby placed forth. No records were kept for sales of fancy sapphire then. However, public acceptance of fancies changed to the point where fancy-colored sapphire constituted a separate category of colored stones. Retail sales in 1996 indicated that blue sapphire was, once again, the top seller, with ruby placing second. It was also in 1996, the first year that fancies were tracked, that fancies placed near the top for colored stone sales (placing tenth). Now, sapphire of various colors accounts for three of the top ten categories. I guess I wasn’t the only person to recognize the beauty in this material.

Reasons for the increased acceptance of fancies probably include good durability and exceptional brilliance. These factors alone brought sapphire to public attention, proved by continued sales of blue sapphire and ruby over the centuries. A more recent influence is public acceptance of the stones with the new colors that span a wider range of hues than previously shown popular. In the past, the fact that fancies were neither blue nor red posed a hindrance to successful marketing. This impediment appears to be on the wane.

Merely because an increase in interest exists in a stone does not mean that it will become a staple of the gem industry. If supplies are insufficient to meet a consistent demand, then interest will wane. Dealers will hesitate to stock an item that cannot be procured in different shapes and sizes for their customers.

Mark Lurie wrote a nice overview on the topic of supply versus demand in regards to sapphire (Lurie, 1996). He pointed out that the reasons for sapphire consistently ranking very high in sales was a result of its durability, its broad range of prices, and its diversity of colors available. Apparently, consumers in other countries had not been quite as hesitant in their appreciation of the fancy-colored sapphires as the ones in this country.

When reading reports of gem production world wide, the articles primarily focused on either blue sapphire or ruby. Lurie continued to comment that while Asia had been the traditional source of both top quality and top colored sapphire, many of the sources of such quality material have become inactive. As a result, supplies are becoming unreliable. He stated that the previously important sapphire mines in India and Thailand no longer produce substantial quantities of top grade sapphire material. Because of political problems and the greater need for expensive machinery, the sapphire mines in Cambodia and Myanmar are difficult to operate. Sri Lanka maintains its status as a world renowned sapphire locale, while other sites in Asia and Africa vie for acceptance. Tanzania, in particular, produces small (10 to 40 points when cut) sapphires of varied and often intense color.

Continuing from the same article, Lurie commented on the status of Montana as a potential player in the world sapphire competition. He stated that, in regards to projected potential, “No material has been more heavily hyped than Montana sapphire.” (Lurie, 1996, p. 39). He explained that for all the projected millions of carats said to be trapped in the ground, most of it remains just there. He pointed out that, aside from quantity, the quality of the material is also in dispute. He quoted AGC President Greg Dahl as stating that “some of the blue will match up against some of the finest sapphire in the world.” Echoing that enthusiasm is Tom Lee, President of Gem River Corp. of Montana. Lurie quoted Tom Lee as stating that his deposit “is as clear, clean, and gemmy as anywhere in the world that I’ve seen.” In contrast to their optimism, Sid Tucker, of Sid Tucker Gems, is quoted as stating that the material produced is typically commercial to medium grade. The colors always have teal or steel undertones, making these particular stones unlikely to replace blue sapphire from elsewhere in the world.

So, are you confused yet? You should be, at least a little, because not all of the claims about Montana material can possibly be true. (I plan to explore in greater detail some of these seemingly contradictory claims about this material). We have seen sapphire prices increase dramatically, but this is in parallel to the dramatic rise in the stock market. I wonder what would happen to stone prices, especially for a stone without an established market niche, if the stock market were to take that long-predicted “correction.”

This seems a good enough stopping point for now. I will discuss in future President’s columns the history of sapphire mining in Montana, especially the news of recent years. I plan to describe the technology used for the successful heat-treatment of this material, as well as AGC’s efforts in advertising to promote the material as a world class gem.

References:
Beard, Morgan (1997). Dealers say: Business better, but risks higher. Colored Stone, Vol. 10 (1), pp. 1, 561-563.
Lurie, Mark. (1996). Will new sapphire sources satisfy sapphire demand? Colored Stone, Vol. 9 (2), pp. 1, 38-39.
Mychaluk, Keith (1995). The Yogo sapphire deposit. Gems and Gemology, vol. 31 (1), pp. 28-41.