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Hearts of Stone BY CAROL BESLER - - November 2001 Robb Report magazine The road back from the emerald mine was quite narrow in places and crossed over the paramo - a high treeless foggy pass through the Andes Mountains- at over 12,000 feet. The four Colombians and the American in the Jeep had been warned that day of bandits on the road but they continued on, feeling safety in the fact that four out of five of their group were armed. Nothing was said as they sped over the paramo, but they drove with guns drawn and emeralds stashed under the dashboard. From the back seat, Ron Ringsrud, an emerald dealer from Saratoga, California cracked a tight smile - he was the one without a gun. Each bend in the road brought a new sense of tension over what might be encountered. Then, at the highest point, the worst curve, a truck was seen stopped diagonally in the road with three men near it. They were showing guns. Miraculously, the truck was positioned wrong and with a grimace and a squeeze the driver of the Jeep got by without even slowing down. It all happened so fast that nobody could react: the group went from danger to safety in an instant and passed downhill through more cloudy curves. In a few minutes they entered the forest below. It is a cruel irony that the world's most valuable and sought-after gemstones come from the most remote regions of the world's poorest, most undeveloped, and most politically unstable countries. The precarious pipeline that feeds raw materials to the world's leading jewelry designers is fraught with risk and uncertainty. As a result, the availability of certain gemstones can have as much impact on the pieces you see under glass at the local jeweler's as the designer's creative vision. Like most gem dealers, Ringsrud, a soft-spoken man, has learned to live with the stress of being in constant danger. Unlike most of his colleagues, he never carries a gun, even when his travels take him to places such as Colombia, now on its 14th year of being on the U.S.State Department's list of undesirable places for citizens to travel. Why do dealers conduct business in risky locales such as Colombia? Because it is the source of the most exquisite emerald in the world. The 15 carat cushion shaped emerald in the photo with the gun recently sold for over $150,000. When it is not being worn at the best parties on the most pampered of hands, it is likely to be resting comfortably in a safe-deposit box or in the felt-lined compartment of a jewelry case in a home with fail-safe security. There is only one way an emerald such as this could have come into the world. It was dug by hand out of a hole in the ground by a miner living in a remote area of Colombia. It was hauled in a bag of dirt, mud, and pebbles, then dragged to a nearby river or creek, where the miner waded into the water, dumped the load into a shaker box or sieve, and separated the non-emeralds from the prized ones. There is a good chance it was smuggled out of the country, and was as likely to have changed hands once or twice by thievery as by genuine commercial transaction on its way to market in either Chiquinquirá or Bogotá . Even after a stone reaches the hands of a Western gem dealer, there is still a good chance that it will be switched or stolen in transit, depending on the reliability of that dealer's associates. At any given time, supplies of particular gems can be drastically reduced, depending on a maelstrom of variables. Explosions and cave-ins are frequent hazards in the primitive mines, as are natural disasters, such as flooding and landslides, all of which could shut the mines down for months, restricting supplies to gem dealers and putting thousands out of work. Or the mines might suddenly stop production because of civil unrest, government crackdowns on smuggling, or power struggles over the right to control the gem trade. In any case, the result is that Western dealers on the first rung of the gemstone supply chain&emdash;the ones who travel to the source&emdash;function in a world of chaos in which they can never predict with complete accuracy the price, quality, or quantity of the rough gems they will be able to obtain in a given year. These adventurous souls travel around the world to negotiate million-dollar deals in places of the people live in desperate poverty, crime is rampant, and governments are corrupt. They live in constant danger of being robbed, swindled, or worse. Forget Romancing the Stone and that endearing villain played by Danny DeVito. The reality is more like a Quentin Tarantino film. Tom Cushman of Allerton Cushman & Co. in Sun Valley, Idaho, always packs a pistol while on the job in Madagascar, and he lets people know it; it sits in a holster on his hip. "You never get used to wearing a gun," he says. "As soon as you put it on, the stakes go way up. Someone could die if a situation escalates. Still, I won't go to the bathroom without a pistol. lt's sitting on the side of the sink while I'm taking a shower." Cushman, a former irrigation systems salesman, thrives on the high-stakes lifestyle. "I'm too lazy to work, too chicken to steal," he says, joking about why he chose to be a gem dealer. "I'm living every 14-year old boy's fantasy. It's like living in an adventure novel." Cushman has been traveling to Madagascar, an island about the size of Texas off the southeast coast of Africa, for 11 years.When the French colonized Madagascar in 1896, they called it the "Land of Beryls." Beryl is the mineral rock that both aquamarine and emerald are found in. Madagascar is one of the most gem-intensive countries in the world, a source for everything from amethyst and aquamarine to zircon. Until 1990, only a handful of Western gem dealers operated there. Since the early 1990s, the government has been democratic, though the current president was the country's dictator from 1974 to 1991. Oespite poverty, crime, and corruption, the country has been free from the civil wars that have ravaged the African continent. In the last two years, Madagascar has become a new source of sapphire&emdash;not just commercial grades, but gems that rival the royal blue beauty of the Kashmir sapphire, which has not been mined in decades. Gem dealers from around the world have flocked to the country most settling in a small village called Ilakaka, near the mines. Like most gem boomtowns in Africa and Southeast Asia, Ilakaka has quickly developed into a third-world rendition of Dodge City, with a rootin'tootin'Wild West atmosphere of lawlessness and gregd. According to Cushman, the population of Ilakaka skyrocketed from about 20 in 1998 to about 100,000 in 2000."There is no infrastructure, no mayor, no fire department, just a lot of money floating around," he says."Everybody's there for money. Guys that didn't own a pair of shoes two years ago are now millionaires in the local currency." With an exchange rate of about 6,500 Malagasy francs to the dollar, it is not uncommon for dealers to carry shoe boxes filled with cash."You'd better be armed or have a heavy security team, or both," says Cushman, adding that robberies are a fact of life in Ilakaka. Most of the crime involves Malagasy people stealing from Malagasy people, says Cushman. But in one week, three foreign dealers were robbed, with the smallest take being $50,000. And once, Cushman arrived only a few days after two Sri Lankan dealers were murdered."They were staying in a hotel owned by a gem dealer who was targeted," he explains. "They just happened to be in the wrong place at the wrong time." IN A PLACE WITHOUT INFRASTRUCTURE or security systems, anywhere can be the wrong place. "This year, I lost three of my men," says Yianni Melas, a gem buyer for Swarovski, one of the world's largest gem companies. His men were from the Mandingo tribe of Guinea, who are historically known for their gem dealing expertise; Guinea has long been a source of diamonds. He had sent them to complete a transaction on his behalf near the mines in Nigeria, and they never returned. "I found out two weeks later that they had been shot," says Melas, who was devastated by the news, but not surprised. "Anytime you go to the source, you're dealing with large amounts of cash in the middle of nowhere.There is no Brink's. Just you, a motorcycle, and a bag of money on your back. You are always at risk." Part of the stress comes from having nowhere to turn for protection. Asking for help from the police is futile, says Cushman."And you can't rely on the army," he adds."You see them during the day, but when the sun goes down and the crooks come out, they head for their barracks. They know the crooks are at least as well armed as they are and probably a lot more motivated to use their weapons." VIOLENCE IS A CONSTANT threat in the gem world, but it is not a constant. The vast majority of gem dealers' time is spent doing business. Ultimately it is about the gems, and the strange, intense bond of trust that develops between dealers and sellers. Once a dealer has made the right contacts, the guns are no longer a threat, just a fact of life. "It's funny," says Ron Ringsrud of Ronald Ringsrud Co. in Saratoga, Calif., who frequently deals in Colombia. "I'll be out in the middle of nowhere with these really tough guys who have big guns with extra-long clips strapped on their hips, and we'll be discussing the finer points of a gem's clarity or color." Developing a trusted network can take years. "You spend more time judging the seller than you do judging the stone," says Ringsrud. That is why dealers tend to specialize in certain areas of the world, where they have established sources who provide them with quality stones at fair prices. What Colombia is to Ringsrud, Madagascar is to Cushman. ''I'm not just another pretty face coming here to spend a little money. I'm a piece of the economy," says Cushman, who operates a company in Ilakaka."Sometimes people hold stuff for me because they know that I'm coming and I'll give them a fair price. I get to see stuff that other guys don't see." Over time, the deals get better for those who make valuable contacts close to the source, allowing them to eliminate some of the middlemen."Anybody can show up in Ilakaka with a bag of money and find people to sell them gemstones," says Cushman.''But the last people you should talk to are the English speaking people. They're a long way from the hole. Several people have bought and sold that stone before it got to them. If you can't speak either of the local languages&emdash;French or Malagasy&emdash;then you have to talk to certain people, and you're going to pay the you-have to-talk-to-certain-people price." The trick, then, is to get to know the ather people, the locals who are directly connected to the mine. "You have to spend lots of evenings with people until three or four o'clock in the morning," says Melas,"getting to know their inner character, eating with them, drinking with them, before you know whether you can trust them or not. And that works both ways." Melas and the other dealers balk at the suggestion that they are pillaging the countries they trade in. "I'eople think we take advantage of them," he explains."The truth is, we take advantage of them maybe for the first six months after a major discovery. Then for the next six years, they take advantage of us. They learn about gem dealing from us, and they become very shrewd. And we end up losing continuously to them." ONCE THE RIGHT CONTACTS are made and the right gems acquired, the dealers still face the ordeal of getting them out of the country. Because Cushman is a resident and owns a Malagasy company, he can carry gems out in his hand luggage. Other Madagascar dealers must acquire a business visa and then go through the Service de Mines, generally a two-day ordeal. Is there corruption? In Madagascar, Cushman says it exists but mostly on a small scale. He notes that a small gift to a secretary will expedite paperwork, for example. "Connections are handy," he says."But you still have to pay every single person.There is no top down control where you can fix it with one guy and it flows downhill." Despite the fact that the tax is only 5 percent, smuggling is rampant. If you are caught, your gems are seized, you spend the night in jail, and, after paying a hefty fine, you are immediately deported. "You pay a fine equal to their version of the price of the goods, which may bear no resemblance to the price you actually paid for the goods," explains Cushman. The dangers of smuggling from Burma are even greater: People have been known to disappear en route to the gem markets across the border in Thailand. The threat to smugglers in Cambodia is even worse. In addition to sapphire mines, the country is loaded with the land variety&emdash;the sort that explode. "I've never seen so many one-legged people as I have in Chanthaburi," remarks one dealer. THE GEM TRADE'S cash-only tradition poses even greater risks in countries with an active drug trade. Because they are bought in untraceable transactions, and because they are portable, gems are ideal fronts for money launderers. This makes Colombia one of the most dangerous places in the world to deal in gems. Besides being the home of the world's finest emeralds, this nation also hosts the world's most vicious drug lords. Emeralds have been mined in the Boyaca province for hundreds of years. When the Spanish arrived in the 1500s, the Indians were already mining the Muzo and Chivor areas of Boyaca and trading the stones in Chile, Peru, and Central America. Today the Muzo, Coscuez, and La Pita mines in the northeast corner of Boyaca are the most productive; Chivor is located in the southwest. Ringsrud owns a home in Bogota and has been buying emeralds in Colombia for 15 years, during which time the gem business has narrowly escaped the control of the country's drug lords. In 1988, under threats from the Medellin cartel, the miners organized, assembling a paramilitary army to engage in an all-out war. They repelled the onslaught of the cartel for three years until 1991, when Pablo Escobar and Rodriguez Gacha were finally tracked down and put on the run by the Colombian national army. "Those emerald miners are a tough bunch," says Ringsrud. The gem dealers worked with the U.S. Drug Enforcement Agency and the Colombian army to eliminate the threat of other drug dealers seizing control of the gem business. "Those of us who were there in those years were amazed at the magnitude of their achievement&emdash;they're heroes," says Ringsrud. "It can be said confidently that emerald mining in Colombia is not providing any support for any drug cartel. The miners and the drug cartels, in Medellin and Cali, remain enemies." Nevertheless, the mere presence of drug cartels makes Colombia a dangerous place to do business. Ringsrud has seen buildings blown up and people shot in the streets of Bogota. "It's not quite as bad as its reputation, but there are a lot of kidnappings and murders, especially on the dirt roads that lead to the mines," he says. Still, Ringsrud has suffered only two major robberies in his career as a gem dealer: one in Beverly Hills and the other in Los Angeles. Ringsrud owns a gun, but rarely carries it. "I carry a cell phone instead. It's one or the other. Carrying both is too bulky" Nor does he have kidnap insurance like many dealers working in the area ."Speaking Spanish and hanging out with the locals is my kidnap insurance," he says. "Going to the mines is safe, as long as you helicopter in and have someone wait for you." IN TANZANIA, the world's only source of violet tanzanite, the mines themselves can be trouble spots. Here, large international mining conglomerates have dug industrial mines alongside local, primitive operations. As the mines branch out underground, they often intersect, and disputes erupt over who has the right to the gems. People have been murdered underground over territorial claims. Occasionally, mini civil wars break out. Natural disasters have also impacted operations, and consequently the supplies of tanzanite. A few years ago, heavy rains drove workers into the mines to take refuge.When a nearby dam broke, the interconnected tunnels filled with water almost instantly. More than 100 people died. In fact, gem prices are surprisingly stable, considering the chaos surrounding their procurement. The steady market for sapphire, emerald, and ruby keeps prices relatively stable.What does fluctuate is supply, and that has a major influence on jewelry design and trends. The latest designs reflect the greater availability of sapphire in every color, much of it from Madagascar. "You work with what you can get," says Malibu, Calif., designer Gregg Ruth, who is known for his diamond pave designs."We've been doing some very important pieces using colored sapphires from Madagascar. I could not have produced these pieces, even with an open budget, with gems bought strictly in NewYork. There's just not enough material. We've been getting them from dealers who go to the source. It's given us a jump on the trend because we had them at the very beginning. Now we're moving into ruby." His timing is right-on: A major ruby deposit has just been discovered in Madagascar, with gems that are said to rival Burmese goods. In addition, dealers say, actual Burmese goods are starting to show up on the market again, all of which is likely to spark a major trend toward ruby in next year's designs. Emerald might gain in fashion as well; dealers say the market is on the verge of a comeback, thanks to fashion's fleeting fancies. Shops in Venice and other Italian fashion locales are showing more emerald green these days. Melas predicts green will be a big color trend in jewelry design next year. "Not just emerald, but also chrome diopside and tsavorite garnet," he says. For Melas, this means spending the next few months in Nigeria and Kenya."Being a gem dealer is like being a correspondent for CNN," he says."You can never say where you're going next; it depends on where the action is. I think it's interesting that God never made gems 50 miles from New York City, or some other civilized place. They are always some place where there's malaria or elephantitis, and native people who chase you with spears." Carol Besler is a journalist and gemologist who has traveled, without incident, to gem mines in Africa and Asia. She does not carry a gun.