Accompanying the growing interest in Montana sapphires is an increasing list of questions about them. One frequently asked question concerns value. The question usually takes the form, Are Montana Sapphires Rare? Full disclosure compels me to acknowledge my interest in the question. Our company, Americut Gems, has a large inventory of Montana sapphire, which we use to supply our independent retail jeweler customers throughout the United States. I consider the question of value to be a significant one deserving a very thoughtful answer. That is the purpose of this article.
What is value?
Value is a broad term that could mean many things. I think what is meant by value in this context is most likely one of two things. It could be both. If the value is equated with beauty, the question would be, Are Montana sapphires beautiful? This is the aesthetic sense. If value is understood economically, the question would be, Are Montana sapphires expensive?
My experience has been that some consumers are primarily interested in aesthetic value, while others are more interested in monetary value. Most have some measure of concern about both. The two concerns are interrelated. Despite the adage that beauty is in the eye of the beholder, it is generally true that the greater the beauty, t
Are Montana sapphires expensive?
Like most commodities, Sapphires acquire and hold value because of their rarity. Generally speaking, the greater the rarity, the greater the value. In an earlier post, I explored this rarity=value theme, comparing the volume of Montana mined production with total worldwide production. The comparison was based on a ten-year United States Geological Survey study. In 2008, the last year of the analysis, worldwide sapphire production was approximately 25,000 kilograms. In the same year, Montana contributed 70 kilograms or 0.002% to that total.
It is hard for me and others to visualize 0.002%, so I suggest imagining an assortment of 350-400 sapphires. The assortment would represent all of the sapphires mined everywhere in the world in any given year of the recent past. Then, based on the production statistics just cited, we would recognize that only 1 of the 350-400 sapphires in the assortment could be called a “Montana” sapphire. Visualized in this way, one can appreciate just how rare Montana sapphire is.
It is one of the reasons the Survey identified Montana sapphire and Burmese and Kashmir sapphires as being the most expensive in terms of average polished prices. Rarity creates value. Rarity also means that consumers generally cannot walk into most jewelry stores and see an excellent selection of Montana sapphires, at least in finer qualities and larger sizes. They will need to ask for them, in which case such inquiries are best placed with independent jewelers with the resources to accommodate their requests.
When people buy fine sapphires, it is often in connection with life-changing events like engagement and marriage or recurring special occasions like special anniversaries. They expect to keep, enjoy, and wear them for a lifetime. They are often passed down to future generations. This prevalent life history of precious sapphire helps explain the buyer’s concern with not only value but also durable or lasting value.
Rarity creates value
Because of these concerns, many people would like to learn more about this “rarity=value/lasting value” theme. An informative, meaningful sequel to this theme must include discussing the sizes and qualities expected from a given volume of mined Montana rough. The size I am most concerned with is 1 carat + polished because that is where most of the demand is.
Very little has been published about Montana-mined sapphire’s size distribution and qualities. The most comprehensive Survey I know dates back more than a century. Although the results of a similar study today may not be the same, the parameters are such that sharing a summary of the report would be helpful.
The Survey was based on ten years ( within a 1906 to 1923 timeframe) of production records of sapphire mining operations in Granite County, Montana. It was a large enterprise that produced 38 tons of sapphire rough, all sold for high-precision industrial applications. The mine ceased operating in the 1940s after synthetic sapphire became widely used. The company’s records suggest that approximately 18% of the total production of mined crystals was of sufficient size to create faceted gemstones that would have weighed one carat or better.
A more recent survey conducted in the 1970s in the same area by a different mining company was based on the extraction of 35 kilograms. The study aimed to determine whether sapphire mining would be profitable. Apart from size considerations, they concluded it would not be advantageous because of the many unmarketable pale stones uncovered. They estimated that only 8% had sufficient color saturation to be sellable, which looks pretty high based on my buying experience. Because I have yet to learn of similar, more recent studies in the public domain, my best resource for exploring these matters in more detail is my buying and cutting experience.
Our company, Americut Gems, has a large inventory of alluvial-sourced Montana sapphire. We acquired this inventory by purchasing large volumes of rough material over several years. We presided over all the processes required to transform this rough into a vast inventory of beautiful gemstones. However, I do not imagine that because of this experience, all my conclusions must be spot on to the last digit. On the other hand, because of my knowledge, I am confident that I can describe the rarity of Montana sapphire so that interested persons can acquire a sense of and appreciation for its lasting value.
Montana Sapphires Rarity Equals Lasting Value
Production of Montana-mined, rough sapphire fluctuates from year to year. For this article, I will assume a yearly output of 500,000 carats. Given this rough volume, we can take that approximately 6-7000, primarily brilliant; marketable gemstones will be cut, weighing one carat or more. They likely have an aggregate weight of roughly 8400 carats or slightly less than 2% of the total weight of the rough mined. Most of these 8400 carats would be made of stones weighing 1.00-1.25. A minority would weigh 1.25-1.75, and relatively few, perhaps 5-7% of the total (500-600), would weigh 2 carats +.
Given the worldwide demand for Montana sapphire, these numbers on their face imply Montana sapphire’s extreme rarity, and this means lasting value. But again, as in an earlier article, I need help to visualize the statistics. But like before, I can use my imagination. Based on the numbers, if every billionaire in the United States wanted a 2-carat Montana sapphire, they would need to wait two or three years of production to fulfill all their orders. If every American who bought a Jaguar last year wanted a Montana sapphire one carat or larger, they would have to wait 3-4 years to fill their orders. The same would be true of every American who bought a Mercedes Benz last year, except they would have to wait half a century to have all their orders filled, to say nothing of all Mercedes Benz buyers in future years who would have virtually no hope of buying a 2-carat sapphire in their lifetimes.
I could go on. But enough of that. I am sure everyone knows by now that Montana Sapphires are rare. This level of scarcity should provide a comfortable level of lasting value. This article will help put to rest those concerns people have who are buying fine sapphires they hope to enjoy for a lifetime.
Written by Arlan Abel FGA
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