Editor’s Note
This article explores the enduring legacy of Sri Lanka’s sapphire trade through the lens of a major gem exhibition. It highlights a key industry perspective on the gem’s market value relative to other precious stones.
“Sapphire prices have risen a lot? They’re still far behind rubies or emeralds.”
This is what Altaf Iqbal, Chairman of the international gem exhibition ‘FACETS Sri Lanka’, said to the author during an interview at the event held in Colombo, Sri Lanka’s largest city, on January 7. While many associate Sri Lanka with Ceylon tea, in the gem industry, it is known as the homeland of sapphires. The British royal family played a significant role in establishing sapphire as one of the world’s most beloved gemstones. In 2011, when the late Princess Diana’s Sri Lankan sapphire engagement ring officially moved onto the finger of Kate Middleton, the price of high-quality sapphires worldwide surged. From that day, exploring Sri Lanka was added to my bucket list, and finally, at the start of the new year, I was able to realize my Sri Lankan bucket list, experiencing everything from mines to distribution channels with all five senses. I share here the various aspects of Sri Lankan sapphires in 2024, gathered through my feet, eyes, ears, and hands.
Sri Lanka, formerly known as Ceylon, boasts a 2,500-year history as the world’s oldest sapphire-producing region. Nicknamed the ‘Jewel Box of the Indian Ocean,’ it possesses the highest concentration of gem-bearing veins per unit area. With gem production potential in 25% of its total land area, it can truly be called a blessed land. It is a real-life treasure island yielding not only sapphires but also 75-80 types of colored gemstones including cat’s eye, tourmaline, moonstone, and quartz. Sri Lanka is also the origin of top-tier giant sapphires like the ‘Giant of the Orient (466 carats),’ ‘Logan Blue (423 carats),’ and ‘Blue Bella of Asia (400 carats).’ Consequently, ‘Ceylon sapphire’ is synonymous with ‘high-quality sapphire.’ Once-famous sapphires from Kashmir and Burma are now scarcely found in the market, with most high-quality sapphires being mined in Sri Lanka and Madagascar. Described in the Bible as having “transparency like the celestial bodies,” Sri Lankan sapphires are characterized by their clarity and brightness compared to those from other origins.
Another charm of sapphires is their diverse colors. Beyond blue, they boast a rainbow spectrum including pink, yellow, green, and purple, referred to in the industry as ‘fancy color sapphires.’ Particularly, padparadscha sapphires, with their subtle mix of pink and orange, are highly popular among collectors due to their rarity and unique color. Blue sapphires show the widest range of color saturation as a single gemstone, with dozens of commonly used terms like light blue, cornflower blue, peacock blue, and royal blue depending on tone and saturation. Shehzmin Mansoor, a third-generation sapphire business owner in Colombo, said:
Meanwhile, over 95% of sapphires circulating today undergo heat treatment to enhance their color, clarity, and luster. While this is a positive practice in terms of choice diversity, disclosure of any treatment is essential for market order. Sapphire prices are determined not only by the 4Cs (color, clarity, cut, carat) but also by various treatment factors, shape, special effects, and distribution status.
The most surprising aspect of visiting Sri Lanka this time was the level of mining environment and sustainability. Strict regulations and rigorous licensing are implemented to protect ecosystems and minimize environmental impact. In Sri Lanka, 90% of mining involves non-automated work, handled by small-scale artisan miners using simple tools and techniques. Mechanized work is only permitted in areas where manual labor is difficult. Since most rough stones are located on farmland, work in rivers has recently been banned to prevent damage to waterways and crops. Foreigners can obtain mining licenses in cooperation with local partners, but the number of licenses and annual export quotas are limited.
Sri Lanka’s mining projects involve a structure where landowners, license holders, and various individuals providing mining labor and equipment share profits. The Ratnapura mining site I visited is also operated on a small scale by local residents, giving a clear sense of community. Miners spare no effort, working for days or even weeks to find a handful of sapphires, yet they take considerable pride in extracting rare and beautiful natural resources. Meanwhile, the sapphire industry has faced serious challenges due to consecutive adversities in Sri Lanka in recent years. During the pandemic, a shortage of skilled labor and outdated equipment led to significant production declines. Compounding this, the 2022 national debt crisis caused unprecedented inflation and currency devaluation, sharply increasing mining costs and leading to higher rough stone prices. In response, the government is implementing fiscal tightening policies, including electricity rationing and doubling taxes. The economy is also gradually recovering with IMF financial support. Currently, foreign buyers’ visits have resumed, and gem exports are normalizing. While full recovery may take years, vitality was palpable in the Ratnapura gem market I visited that day.
“Sapphires Selling Well Due to MZ Generation’s Color Preference”
To understand Sri Lanka’s sapphire market trends, I met directly with Altaf Iqbal, Chairman of ‘FACETS Sri Lanka’ and the ‘Sri Lanka Gem & Jewellery Association (SLGJA)’ in Colombo.
Q. What kind of event is FACETS Sri Lanka?
It is an international gem & jewelry exhibition held annually in Colombo, celebrating its 30th anniversary this year. It is a platform to introduce the most famous blue sapphires and other colorful gemstones and share industry innovations and trends.
Q. What are the main markets and trends for Sri Lankan sapphires?
Traditionally, the US and Europe have been the largest markets, but the landscape is changing as China has emerged as a major buyer in recent years. Currently, China is the market with the highest demand for medium-quality sapphires. There is also a trend of top-tier, unheated sapphires moving from the European to the Chinese market. However, with supply lagging behind demand, China is diversifying its import sources to Madagascar. The US imports large quantities of standardized, medium-to-low quality stones in bulk, and India also holds an important position in the sapphire market. South Korea shows high demand for heat-treated stones and royal blue color. Overall, sapphire demand is increasing due to the downturn in the natural diamond market and the influence of the younger generation preferring color. Furthermore, with growing expectations that the US’s tight fiscal policy is effectively ending, investment demand for high-quality sapphires is predicted to expand further.
Q. What is your advice regarding sapphire treatment methods that have become an issue?
Over the past decades, sapphire treatment methods have advanced significantly alongside the development of new sources. In fact, common heat treatment is an essential technology to make mined sapphires marketable products and broaden the range of choices across various price points. However, treatments like lead-glass filling and diffusion can be problematic in terms of durability and safety, so caution is needed. FACETS Sri Lanka prohibits trading treated stones (excluding heat treatment) and synthetic stones. This is a strategy to preserve and protect the image of this historic origin. Since all variables cannot be completely excluded, we recommend obtaining a report from a reputable gemological laboratory when purchasing.
Q. How accurate is a laboratory’s origin determination?
The origin of a sapphire plays an important role in marketing. However, results can vary between laboratories. It is not uncommon for sapphires circulating in the market as Kashmir or Burmese to sometimes be identified as Sri Lankan. It is crucial to trade with trustworthy entities, and it is advisable to choose based on color and quality rather than relying excessively on origin.