As often mentioned, turquoise pricing is distorted because of the two-tier market of treated and natural. It is like comparing, not apples and oranges, but apples and plastic fruit. The plastic fruit may look like the real thing but it is much less satisfying and nurturing when consumed. With natural turquoise price rises at a dramatic rate as we go from mid-grade to high mid-grade to high grade to gem grade. Let’s look at how price is related to grade and rarity.
Let’s go mining. First, we must locate a claim and file with the necessary authorities. The cost of entry is inexpensive. Next, we must develop a Plan of Operation to demonstrate that we are in compliance with all environmental and other regulations. This is time consuming and expensive and we may have spent tens of thousands before we ever begin mining, much more if reclamation is needed on our claim.
Once we are legal (and many operate illegally as long as they can) we begin mining. If we are hand mining our expenses are limited to travel, personal maintenance and paying for our labor. Using only hand tools production will be limited. If we have permit for using heavy equipment we must purchase or lease equipment; an excavator and bull dozer. Better throw in some way to clean the stone and have sufficient water to do so. A trammel for picking out turquoise is nice.
Buying equipment that is used for only a month or two a year is an extravagance. This equipment may cost several hundred thousand each and diesel fuel and maintenance are expensive. Renting may cost upwards of thirty thousand a month each for the big machines. Down time due to equipment failure is a fact of life and repair in remote locations very time consuming.
So, before we have extracted any turquoise, we will likely have several hundred thousand dollars into the effort and remember, it is always if not necessarily when that we may discover turquoise. As Jesse Robbins, Myskogee jeweler and owner of the Cheyenne turquoise mine says. “I can guarantee that the most expensive turquoise you will ever buy is the turquoise you mine yourself.”
Assuming we do find turquoise, depending upon the mine, we may expect as much or more as 80% will be chalk and require some treatment before it may be used commercially. That means we have a one in five chance of finding the elusive natural turquoise. Of that 20% about 75% will be mid to high mid-grade with only the top 5% considered high grade with maybe 1% being very high grade. For all our mining effort and expense, we have a one in a hundred chance of finding very high-grade turquoise. Don’t forget our expenses are the same for whatever grade we may extract. True gem grade turquoise is one of the rarest of all gem stones occurring in as little, or less, than 0.1%, one tenth of one percent of all turquoise reducing the chance of our mining effort to discover the elusive gem turquoise to one in a thousand.
Pricing does not reflect the cost. Most turquoise miners do not do cost accounting or have a business plan and rely on other income to subsidize their mining efforts. Those that do show a profit from mining will be producing large amounts of chalk for treatment. The price of mid-grade to high mid-grade turquoise is restrained by competition from the treated market where treated turquoise may have better color and hardness than similarly priced natural. Natural mid to high mid may sell from $4 to $8 a carat.
As we move to high grade the quality of the turquoise increases dramatically and treated rock will not compare at all. Here we see price escalate greatly and, depending on grade and the mine may range from $20 to $80 a carat, an increase of twice to ten times more than very high mid-grade. For gem grade, again depending on mine and grade, pricing will range from $80 to $400. In this market pricing will also depend on the particular market. As told in Turquoise in America Part Three, The Stories of Turquoise, 1990-2020, since the 1990s the Japanese have shown a willingness to pay more for the highest grades than US buyers.
While it may seem counter intuitive to say that the best value in turquoise is found at the highest grade that is the truth. On an historical basis turquoise is undervalued. During the time of The Great American Turquoise Rush of 1890-1910 covered in Part One of Turquoise in America high grade turquoise sold for an average price of $15 a carat which is over $300 in todays dollars.
From a cost accounting perspective, the price of the ultra-rare gem grade, relative to the cost of production, does not begin to reflect true cost. Of course, this is a moot point in an open market where price is determined between a willing seller and buyer. Still if there is not sufficient profit to the miner relative to expense there is no incentive to make the extra effort in time, equipment and labor to pick out the gems from the chalk. In this scenario a product in short supply will become less and less available as the only gem turquoise available is that coming from hoarded stock.
When supply is limited increases in demand will greatly increase price. Demand for turquoise has remained more or less constant over millennia interspersed with short periods of buying frenzy such as we saw in the 1890’s, the 1970’s and, for high grade, the 1990’s. Remember, Lander Blue was priced at $2 a carat when it first came to market in the mid 70s. It quickly moved to $10 and to its present lofty levels over the past twenty five years. Compared to Lander Blue other gem grade turquoise from the most prominent mines are a current bargain.
As a collector I continue to buy high grade turquoise. The challenge is less my willingness to pay the price but to find the turquoise. I also sell select turquoise from my Callais Collection in the Store on the web site. While it may sound self-serving the prices offered are generally less than market rate, which can be difficult to determine since comparable pricing is often not available for high grade. For example, a gem grade cabochon of red web Candelaria offered from the Callais Collection was selling for ten percent less than a well-known collector and dealer had sold the same grade two years ago. In a recent conversation he commented, "I underpriced it then. I can't find any." Currently I can find no comparable prices. There is none on the market. This situation is supported by the general consensus from all of the stories in Turquoise in America Part Three from miners, jewelers and traders that high grade turquoise has become very scarce.
Here is a collecting story. In 2014 I bought some gem grade Bisbee from the late Bruce Mead, the Bisbee Rock Man, for $100 a carat, high for the US market at that time but the Japanese and Chinese were paying more. I asked for Bruce to mail me the cabs with insurance. He refused. “How do you insure something that can not be replaced?” I ended up meeting him in Santa Fe to receive the turquoise.
One hopes to follow one’s own advice. I buy gem grade turquoise when I can find it and I recommend that those who have the means and discernment do so as well.
Mike Ryan II