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Meet the Company That’s Changing the Gem Mining Industry, One Ethically Sourced Ruby at a Time

Gemfields is committed to ethical practices that give back to the community at its ruby mine location in Mozambique and its emerald vein in Zambia.

Examining Mozambique rubies Photography by Barry Hayden

It’s a stark, startling contrast. Beautiful, precious jewels, like rubies, emeralds and sapphires, are often sourced in dismal conditions where disadvantaged workers and lawlessness make it easy for valuable stones to trade hands under unscrupulous circumstances. In remote, rural parts of Africa, South America and Southeast Asia, far from the markets where most of the stones are sold, there’s little pressure—or appetite—to improve.

Gemfields is bidding to change the mining culture. The London-based company is committed to sustainable mining wherever it sources stones, including at its ruby mine in Mozambique and emerald vein in Zambia. To support that mission, it spends 32 cents of every dollar in revenue on ethical practices—social programs, sustainable initiatives, taxes and royalties often dodged by rivals, and pays staffers about 10 percent more than the industry’s minimum wage.

Gemfields’ success in the past several years—the company has sold more than $425 million through its ruby auctions since the sales started in 2014— underscores that a steady supply of quality stones from a qualified, ethical source is a potentially lucrative proposition. The firm’s corporate mandate provides safe mining practices and offers education, farming skills and medical services— something that might seem like standard practice yet is sorely lacking in gem-producing countries.

Near the ruby mine in Montepuez, Mozambique, for example, Gemfields funds two mobile clinics—offering everything from family planning to vaccinations to 5,000 patients a month—and four schools, refurbished or built from scratch, that are now educating almost 2,000 students within the community. A recent visit to Montepuez revealed how the company’s efforts are transforming communities: A flourishing vegetable farm operates as a co-op, involving families from seven nearby villages. They’ve pooled land and used new techniques—relay farming, for one, where complementary crops are planted together in the same ground—to turbo-charge yields.

Even better, this is one of almost a dozen similar farms in the area, each underwritten by Gemfields, whose initial outlay of $300 per farm will yield a fivefold return for the families, thanks to a surfeit of produce that they can eat and sell at the local markets.

Near a mine in Mozambique, Gemfields pays for four schools that are now educating almost 2,000 local students.

Near a mine in Mozambique, Gemfields pays for four schools that are now educating almost 2,000 local students.  Photography by Barry Hayden

These types of commitments might be admirable, but how does such touchy-feely TLC affect the P&L? After all, the cost of socially progressive policies, whether higher wages or community support, risks making the final product pricier and therefore less competitive. Not so, claims Gemfields CEO Sean Gilbertson. He says that well-run mines boost the market for the company’s stones. “It runs counter to what everyone is taught in business school about the laws of supply and demand, because they’ve forgotten that those rules apply only to an efficient market,” says Gilbertson. “This is a highly inefficient market, which did not have reliable, consistent or stable supply [until now].”

In other words, investing in better business practices has shored up a shaky industry, and so prices have risen along with the resulting confidence: The finest-quality rubies are now reaching $1 million per carat for the first time, and the price of rough emerald rocks increased eightfold per carat in tandem with Gemfield’s decision to triple production in Zambia. Note, too, that Gemfields’ openness about its supply chain has particular appeal in certain markets—North America, for example, where younger luxury buyers increasingly want to know the origins of luxury products.

The sort house

The sort house  Photography by Barry Hayden

Value and values can profitably align, especially as the luxury market embraces radical transparency and ethical sourcing. Consider, for example, Kering’s Environmental Profit & Loss (EP&L) tool, which measures the environmental impact of the materials and processes used to produce products within its portfolio of brands including Saint Laurent and Gucci. The EP&L data also motivate transparency, which in turn helps minimize future risks.

In the jewelry sector, more brands are taking a stand. Chopard recently committed to using 100 percent responsibly sourced gold (which is verified as having met international best practices for environmental and social standards), and Tiffany & Co. has long been mindful
of ethical and environmental concerns, as evidenced by its pioneering self-imposed ban on selling red coral. “Twenty years ago, this was not even a topic of discussion, but now it’s just accepted and expected,” says Tom Moses, executive vice president of the Gemological Institute of America. He points to the London-based nonprofit Responsible Jewellery Council; more than 1,100 firms have committed to its independent audits of their business practices.

The Mozambique landscape

The Mozambique landscape  Photography by Barry Hayden

“This is a movement driven by the pull from consumers, who are very much interested in where and how something was sourced,” he says. In particular, of course, those consumers are social media–savvy millennials. They’re both prone and able to dig into a company’s ethics and practices and won’t shy away from sharing criticisms or accolades in response to what they find.

“Knowing the stone’s provenance now is a baseline,” says New York–based jeweler Michelle Fantaci, whose supply of colored stones comes entirely from Gemfields. “I don’t think it’s a particularly heroic stand—it’s just best business practice.” Fantaci says that her customers often query her about a ruby’s or an emerald’s route to the showroom. “It creates more of a bond with the gemstone and therefore the finished piece.”

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