Cutting in ChinaPlay
The Miranda GroupOur representative’s documentation of the journey of rubellite tourmaline from Brazil to China began at the Hong Kong office of Miranda Group Co. Ltd. There, he interviewed Miranda Costa, a co-founder of the company. They spoke in detail about his experience in the market and the connection between Brazil’s rubellite tourmaline and the Chinese market. Mr. Costa had been a partner in Miranda Gem Hong Kong between 2005 and 2009. When that company closed in 2009, Mr. Costa co-founded Miranda Group Co. Ltd.
The Miranda Group started working with rubellite in 2010 and entered into a joint venture with KGK, a global diamond, colored stone, and jewelry wholesaler, to acquire and market rubellite in China. At that time, the Miranda Group was buying rubellite from Africa. In 2011, they started working with the Cruzeiro mine and its owners, the Neves family.
The Business ModelToday, the Cruzeiro mine, the Miranda Group, and KGK work together to bring Brazil’s rubellite tourmaline to the market in China. The Cruzeiro mine provides the rough rubellite to the Miranda Group, which cuts the material. The rough crystals are sliced or sawn in the Miranda Group office in Hong Kong, and then faceted and polished at the factory in Shenzhen, China. The stones then go to KGK’s factory and offices in Panyu, China.
KGK markets and sells the cut stones and also mounts cut stones into jewelry for sale, primarily in China. The Cruzeiro mine also cuts its own facet-grade green and blue tourmaline in Brazil and produces bicolor and multicolor tourmaline, which the Miranda Group has been cutting and stockpiling.
The Miranda Group can cut about 25,000 to 30,000 carats a month at their factory in Shenzhen. They then provide the cut stones to KGK. The Miranda Group also works with bicolor tourmaline, aquamarine, morganite, emerald, and Mozambique ruby. They cut these materials and work with KGK to sell primarily to the Chinese market. They also deal in Mozambique copper-bearing tourmaline and Brazilian Paraíba tourmaline which, in cooperation with KGK, they will supply to the market in 2015.
Fashioned Rubellite ProductionThe Miranda Group needs to receive 100 kilos of rough rubellite a month to meet its production goal of 25,000 to 30,000 carats. They promote more-included material for beads and carvings. The company’s goals for facet-grade material are to produce clean stones that meet the requirements of the high-end Chinese market.
In the United States, the Miranda Group plans to market gems of three carats or smaller, to meet what they feel is the right price point for that market. In China, there is a ready market for sizes over three carats, including very large sizes of 100 carats or more.
Miranda Costa estimates that the demand from the Chinese market has caused the price of rubellite tourmaline to double over the last three years. Even though there is current resistance to the high prices, the company still finds it difficult to meet the demand for fine-quality faceted stones, so he thinks there is still room for price increases.
For high-end consumers, the rubellite needs to be well proportioned, bright, and clean, and have fine color. Because these qualities are essential, the Miranda Group only gets about 12 percent weight retention from the rough.
Since many of the crystals from the Cruzeiro mine are bicolor or multicolored, the Miranda Group also cuts that material. Many of the tourmaline crystals from Cruzeiro are zoned with black, green, and rubellite colors. The Miranda Group has been cutting and accumulating green-and-rubellite material over the last two years, so they have about 80,000 to 100,000 carats in stock now. They plan on marketing it in the US and China in the near future.
Comparing Brazilian rubellite tourmaline rough to the material Miranda Costa used to get from Nigeria, he finds the Cruzeiro material to be cleaner, with better crystallization and more even color. Mr. Costa sees much less Nigerian material on the market today, and the prices are much higher than when the company was buying large quantities in 2010.