World Geopolitics
and the Gemstone Market

The majority of the world's gems are mined in four principal areas: Brazil, S.E. Africa, India/Sri Lanka, and S.E. Asia (Burma, Cambodia, Thailand).

Each of these areas has special problems that may limit future gemstone supplies, thereby affecting world prices. The gemstone trade is totally free and unfettered by government regulations. Prices are therefore determined strictly by supply and demand.

Brazil produces tourmalines, aquamarine, kunzite, andalusite, golden beryl, emerald and other gems. Brazil has suffered in recent years from internal inflation rates topping 1 00% annually. Wealthy Brazilians have therefore turned to the gemstone production of their own country as a vehicle for protecting the purchasing power of their assets, since holding cruzeiros has proved to be foolhardy. As a result, many fine Brazilian gemstones are no longer being exported, and are unavailable for the rest of the world market.

Most of the gemstone wealth of Africa is concentrated in the southeastern countries: Kenya, Tanzania, Mozambique and Madagascar. All of these except Kenya are socialist countries with repressive governments and limited free enterprise. Since gemstone mining is very seldom conducted by government operations, the supply of gems from these countries is sporadic and potentially could be halted at any time. These localities provide all the world's tanzanite and tsavorite, and fine quality sapphire, ruby, tourmaline, aquamarine, scapolite and a wide variety of other gemstones.

India and Sri Lanka are ancient and rich gemstone localities, producing fine emerald, aquamarine, sapphire, chrysoberyl, spinel and other stones. India, despite its riches, has fewer than 20 gemologists in a country of more than 700 million people and the most recent complete survey of its gemstone deposits dates to before World War II. Sri Lanka has well established gemstone deposits, but many of these are destined to be destroyed by a dam that is to be built in the next few years for irrigation purposes. The effect on the world's gemstone reserves cannot be estimated -

Burma, Thailand and Cambodia are surrounded by hostile enemies; yet these countries supply the world with most of its ruby and zircon, as well as all its large peridot and significant amounts of sapphire, spinel and other gems. Cambodia is now socialist, and Thailand has been invaded several times. Burma's borders are closed and the supply of gems leaving the country has dwindled to a mere trickle.

ALL OF THE ABOVE FACTORS INDICATE THAT THE WORLD'S SUPPLY OF GEMSTONES IS DECREASING, AT A TIME WHEN WORLD DEMAND IS INCREASING STRONGLY. THE EFFECT ON GEMSTONE PRICES SHOULD THEREFORE BE CONTINUALLY UPWARD.