Gemstone Origins: Tracking Challenges | Blog | Ceylons Munich

Gemstones pass through many hands, typically in the countries of origin through collector systems at mines and local intermediaries to wholesalers. This is the case in Sri Lanka including all other countries where gemstones are mined. This also would be applicable for rough gemstones as well as for cut gemstones, which are resold in ever-increasing lots, thus mixing gemstones from a wide variety of countries of origin.  

To meet the demands of international buyers for uniform colors and sizes, international gemstone hotspots such as Bangkok (Thailand) or Jaipur (India) have formed where the gemstones are again mixed, sorted, and calibrated, especially for smaller stones. Thus, the origin, the way of treatment as well as the mining conditions on site can no longer be traced.  

The vision of CEYLONS stands to remodel this approach through a direct and traceable supply chain.

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Historically evolved supply chains in the gemstone trade.

The general problem with the trade has evolved historically. In the typical gem trade, stones pass through many hands, from the mine through collector systems, too many local small-medium-large rough stone dealers, until they are cut. After refining, there are usually even more middlemen involved until large international companies as exporters offer the stones in the world's largest gem centers or bring them to the respective markets for sale. Each intermediary naturally wants his/her share of the proceeds, so there are usually a dozen players in this process. This brings lack of transparency for the origin and treatment of the gemstone, drives the price up, and additionally increases the risk of misdeclaring the gemstone, as the gemstones are resold in ever larger lots to the next trading level.  

Directly in the country of origin, it can also be observed that many gemstones from other countries enter the system of trade, both uncut rough and cut gemstones. The typical gem trade relies on mixing and sorting of like to meet international demand for the most accurate calibration possible. Especially in the case of smaller gemstones, it is no longer possible to know,  

1. where they came from

2. whether and how they have been treated,  

3. and under what conditions mining took place.  

It can no longer be completely guaranteed that for example stones are subjected to labeling after chemical treatment or irradiation; false statements about the country of origin with lower quality and market value as in the case of sapphire. (Example - Thailand, Vietnam, Australia; falsely declared stones or even a few synthetic stones that are contained in large lots)

The exact knowledge of origin, way, and the approach of further processing, as well as treatment, is important in a market of high-quality gemstones, also as good of trust.  

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How can the traceability of gemstones be guaranteed?

There are several reasons why a direct supply chain without intermediaries and long-term oriented cooperation with trustworthy partners is the basic prerequisite for this. The pov of CEYLONS shows that transparency makes it possible to pay duty on the sapphire on its journey from the mine to the showcase of a goldsmith or jeweler.  

Through permanent partners in Sri Lanka, CEYLONS operates the mining and all further processing steps in a joint venture. Direct mine access is the basic requirement, but building a traceable supply chain from mine to cut gemstone takes,  

• a significant amount of time
• the right partners
• and great effort.  

Likewise, tracking the gemstones throughout the value chain is a challenging task to accomplish.  

By focusing on the supply chain and solid mining partnerships in Sri Lanka, one can say where exactly their' sapphires come from and have a significantly improved mining environment on the ground in a positive way. This is certainly not practically feasible with a portfolio of diverse gemstones from a wide variety of countries of origin.  

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Understanding the exact path of the gemstone is only possible through lean and verifiable value chain

Each country with gemstone deposits has different mining, processing, and trading patterns. However, it is the same approach in all countries that gemstones go through many different middlemen and are resold in ever-increasing lots or batches. This is common practice in all countries where gemstones are found and cut. There is nothing wrong with this per se, but it does carry certain risks.  

For many end customers, it is important to know what the journey of the gemstone has been like from the mine to their finished piece of jewelry. It's all about transparency, traceability, and sustainability. More and more customers want to demand this knowledge from their goldsmiths and jeweler. Behind this are the gemstone dealers, wholesalers, and producers who can only ensure this reliable knowledge and expertise if they have established a direct, lean, and verifiable supply chain.  

Building such a value chain is complex and not easy to implement sustainably. But it is possible, precisely by specializing in one type of gemstone or one country of origin, or a combination of both. How this most direct and lean supply chain can look like, with specialization in sapphires from Sri Lanka is shown by CEYLONS with their new approach to gemstone trade. Their rough sapphire stones come from the mining cooperations in the highlands of Sri Lanka, the refinement is performed by their cutters in the capital city Colombo and so the sapphires reach Munich with confidence, without any intermediate trade. This 'mine to market' approach is the most direct and streamlined value chain there can be in the gemstone trade and offers many great benefits for all involved in the value creation process, for their partners and workers in Sri Lanka and their customers around the world.  

This is the ideal combination of how sustainability can be practiced in mining and the entire value chain: Government regulations and control of the country of origin, using Sri Lanka as an example, together with CEYLONS' entrepreneurial efforts for wider improvement as a local employer on the ground. Regulations from government authorities alone are not enough. Neither are adjustments from mining companies alone. The combination of both has the desired impact, which is long-term and sustainable for people and nature.  

CEYLONS separating sharpness is important for reliability in the market. Their 'fair Ceylon Sapphires' come exclusively from the value chain and if the rough stone has been purchased from another mine where they do not control the mining conditions themselves, this is communicated. It is precisely this reliability and openness that has been a big part of CEYLONS' success in recent years. The market appreciates their pioneering work in building their traceable and sustainable supply chain. Important to them is the 'Fair for Everyone' aspect. 'Fair' for nature and the environment as well as 'fair' for the people behind the gemstones in Sri Lanka.

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Ensuring traceability

Worldwide, the gemstone trade operates on the same principle, with cross-traffic of gemstones taking place in every link of the supply chain. Gemstones are resold in ever larger lots. More than a dozen traders are involved until the finished gemstone is in the jewelry. Traceability is therefore no longer given. If someone is not directly involved in the mine, in the find, he cannot know the exact origin of the gemstone. Only through direct involvement can transparency be ensured and sustainable issues be advanced. Therefore, a joint venture in mining with local mining partners and the establishment and assurance of a traceable supply chain without intermediaries from the raw stone from the mine to the finished faceted gemstone is essential. The tracking of each stone is essential to document exactly its origin and the steps of further processing - to be able to reliably tell the journey of the gemstone on its way to the finished piece of jewelry.