Mountain jewel retains its shine

Tanzanite is a relatively recent discovery, found in 1967 on the foothills of Mount Kilimanjaro in Tanzania (hence its name). This is its only known source. Officially known as blue zoisite, it was renamed tanzanite by Tiffanys for marketing reasons. They figured, reasonably enough, that "zoisite" wouldn't go down as well with consumers.

The colour is a sapphire blue with overtones of violet, which only emerges after treatment in a gemstone oven. Although there are many - myself included - who had never heard of tanzanite, it is now a popular stone for jewellery. It is relatively cheap, at least compared with the big four - diamond, emerald, ruby and sapphire. This is largely due to its natural softness, with a tendency to chip if dropped.

Reports that supplies of tanzanite are dwindling are not true. The market has been saturated with stones from the start, with 2 million carats' worth released in the first five years after discovery. Tanzanite appears regularly on TV shopping networks in the US, usually hyped as rare and exclusive and generally given extravagant prices. These stones are likely to be of the lower quality. Tanzanite has recently started to appear on the secondary market in Australia and results show there is demand for high-quality items, with values steadily - if not dramatically - rising.

At Leonard Joel's fine jewellery auction in June, an art deco-style tanzanite and diamond pendant sold for $9700, including buyer's premium, while a loose heart-cut tanzanite sold for $6700, also IBP. The latter result was just above the higher estimate of $6500. Others fetched less than expected. A tanzanite and diamond ring sold for $2400 IBP, below the lower estimate of $2800.

Other recent Leonard Joel results included a tanzanite and diamond heart pendant, sold for $21,960 IBP in December 2012. A tanzanite and diamond cluster ring for $6700 IBP in September 2012, and a tanzanite and diamond pendant, sold for $14,640 IBP in March 2012. Diamonds, obviously, add significantly to the total value.

John D'Agata, Leonard Joel's head of jewellery, says the appeal of tanzanite is its availability in a variety of sizes and its affordability. It has been a consistent seller during the past 10 years, covering all age groups, he says, as it's a stone that everyone can enjoy. Good pieces in the $1000 to $2000 bracket appear regularly at auction.

D'Agata says tanzanite is not a great investment at the moment, unless you are buying museum-quality pieces. There is a regular supply of good-quality stones but that could change over time, as has happened with rubies. Fine jewellery has been a steady performer on the secondary (auction) scene, cruising through the financial crisis with only minimal interference, and has been the most vibrant department at Leonard Joel, D'Agata says.

Jewellery is a good commodity, while art has taken a bit of a bashing recently. Collectables are also very strong. Clearance rates are not necessarily the best indication. A 50 per cent to 60 per cent selling ratio is good, according to D'Agata. "If I get 70 to 80 [per cent], I'm beside myself."

It's the returns that tell the story. D'Agata clears $35,000 to $45,000 a week through jewellery sales. There's a steady supply of good-quality pieces appearing through a wide cross-section of vendors, although D'Agata has noted that very few want to sell because they need the money. More likely, they will be reinvesting the capital in another style of jewellery. He notes that, these days, there appears to be no stigma in buying second-hand jewellery. Some buy nothing else.

Sotheby's has also been achieving strong results in jewellery sales. Their next auction, on September 3 in Melbourne, will feature some wonderfully quirky items, such as an aquamarine and diamond bird on a rock brooch. It was designed by Schlumberger for Tiffany and Co., circa 1960, although there is a strong influence of Hanna-Barbera. Estimates for this oddity are $45,000 to $55,000.