lonewoodminer
Shiny_Rock
- Joined
- Jan 5, 2005
- Messages
- 141
I often see questions along the lines of why is that stone so cheap ,there must be something wrong with it. To try and explain some of the possible reasons for this, I thought I''d jot a few hypothetical figures down relating to the supply chain in the sapphire game. These are not our prices but an average of the Australian mining prices. For an example lets say miner A sells a mine run parcel to one of our traditional Thai buyers. The parcel would normally have about 75% small and 25% large, lets just look at the large (most of the value). The large consists of 83% corundum, 17% gem grade - say they buy $20,000 worth of large @ $7.40 per gram giving them 2700 grams - out of this they should end up with 456 grams of gem grade (of all grades including the lower quality). This gem grade has cost them $8.80 per carat. Then you need to consider the losses in cutting that in this size parcel could easily be 75% leaving them with only 114 carats of cut sapphire for sale. By this stage, it has cost them $177 per carat including cutting costs which are very low in Thailand - around $2.00 per ct . I''m sorry for so many figures but I thought there may be interest out there. Remember the $177 AU per ct is the cost to the original buyer and if you add in a wholesale buyer who buys from them and then resells into a retail outlet, it is then clearer why there are some hugh price variations. A stone can be quite a bit cheaper if it misses out one or more steps in this process or quite a bit more expensive if it has been custom cut (or recut) at a much higher per carat cost. The highest priced need not always be the best it may have just traveled through a few more sets of hands in the supply chain. These are very rough figures just to give you a picture of pricing from the mine level in our region but it illustrates how the price bumps up dramatically at each step - hope they are of interest to some out there.
cheers
Andrew Lane
cheers
Andrew Lane
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