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Racing for the Red

Last September was far from the first time in this still young century that the gemological grapevine rustled with rumors about new finds of spinel in Africa and Asia. But this time, miners reacted to the rumors rather than merely repeating them. This time, they started what may eventually become the biggest spinel rush in history.

In the past, when important spinel deposits were found, the news invariably was overshadowed by hysteria about new ruby and sapphire mines. In 1990, when spinel was discovered at Morogoro, few buyers took any interest in it, focusing, instead, on Burma’s mammoth find of ruby at Mong Hsu in 1992 and the find of sapphire at Ilakaka in Madagascar seven years later. This may be the first time that spinel has ever caused a delirium among gem dealers.

The fever, says gemologist and gem explorer Vincent Pardieu, started at the Hong Kong Show where a couple of exceptionally clean and stunning 30 carat-plus red spinels were on sale. Owners of these stones suspected their origin was Tanzania.

Then, on October 5,, a Thailand-based web vendor of colored stones, published a story about a 52 kilogram crystal from Mahenge, a spinel-rich area in the south of Morogoro, one of Tanzania’s most famous gem mining districts. Miners also dug out huge 30 and 20 kilogram crystals. These behemoths eventually yielded a spectacular array of 20 carat-plus stones with rich vibrant pink and purple reds for which dealers in Arusha, Tanzania’s capital, were asking—and getting—astounding prices.

So were dealers in Bangkok where spinel scuttlebutt had it that Japanese buyers were paying as high as $5,000 per carat for superb stones between 5 and 10 carats. Prices of $8,000 to $10,000 were reported for fine goods in the 20 to 40 carat range.

No wonder Pardieu, who had recently investigated promising spinel finds in Tajikistan and Vietnam, immediately headed for Mahenge, arriving there on October 9, his first visit to the region since 2005. In just two years, the number of miners had doubled from 400 to 800, with more expected. It didn’t take Pardieu long to figure out why Mahenge was a miner magnet in a way it had never been before. “The new Mahenge material seen after the summer of 2007 is noteworthy for its high transparency, which is quite a departure from the velvety appearances of Mahenge goods we were used to seeing before,” he says.

Is it size alone that accounts for the amazing prices being paid abroad for new-find Tanzanian spinel? Not entirely, says globe-trotting gem dealer Dudley Blauwet, based in Louisville, Colorado. “The prices reflect the brutal devaluation of the U.S. dollar,” he explains, citing how the dollar was worth only 62 Kenyan shillings versus 70 of them the year before. “To compete, U.S. dealers have to pay higher prices and work on lower margins.” But even if the dollar wasn’t plummeting, spinel would be the most expensive it has ever been. Lovers of the gem say it’s about time.

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Tanzanian spinel