Precious gemstones miner Gemfields (LSE: GEM) is stepping up efforts to market its emeralds and rubies in China after a report highlighted the “huge potential” for ethically sourced gems in the Chinese market.
Based on research among gemstone owners across China, Gemstone says there is an opportunity to meet Chinese consumers’ growing expectations of corporate responsibility and sustainability.
The report, Sustainability: The Future of Coloured Gemstones in China, shows that up to 35% of Chinese jewellery owners plan to acquire rubies, while 25% expect to buy emeralds in the near future.
The study also shows that Chinese jewellers prioritize rank clarity, carat, colour and cut when it comes to selecting a gemstone. Consumers reportedly care more about the gemstone itself than they do about its price.
“It is highly positive that 97% of jewellery owners are willing to pay a premium for responsibly mined gemstones,” Gemfields chief executive Sean Gilbertson said. “We expect responsible sourcing will continue to receive ever-increasing attention, and become progressively more important to Chinese jewellery buyers.”
Gemfields owns and operates the Montepuez mine in Mozambique, which is the world’s richest known ruby deposit. It also owns the Kagem emerald mine in Zambia, which provides more than one-fifth of the world’s green gemstones.
The company, which owns Kagem in partnership with the Zambian government’s Industrial Development Corporation, repatriates all proceeds from the sale of Kagem’s emeralds back to Zambia. The strategy, says Gemfields, generates tax revenue for the government, as well as employment and economic growth.
Gemfields saw its first Chinese customer successfully win a schedule at an auction in Lusaka, Zambia, last year.
The buyer, Lok Chen of Cai Bao Cheng, bought 117,500 carats of large emeralds greater than 31 mm in size, which the company will cut and polish at their factory in Shenzhen.
The finished pieces are destined for the Chinese domestic market, either via a wholesaler or a jewellery company, Gemfields said.
Cai Bao Cheng was the first company to signal an increasing interest in Zambian emeralds coming from Asian consumers, according to the company.
Gemfields’ growth strategies in China for the rest of 2020 includes undertaking marketing launches and ruby masterclasses, as well as participating in gem and jewellery fairs to increase awareness of responsible sourcing.