Is it true that De Beers pulled off one of the one successful pieces of social engineering ever? If they did manage it, you can’t deny that it was one of the most remunerative schemes ever hatched!

For sure it persuaded all of us (with a little help from Marilyn Monroe) that love, courtship and weddings mean diamonds. From being a loss-making over-supplied product, diamonds were transformed into a product that brought in billions of dollars. So could this be done with other gemstones? Miners have at least 130 more to choose from.

There is a lot of money riding on that question. Diamonds, emeralds, rubies and sapphires are “precious” – they are the pricey classics. Few doubt that. They have “lasting appeal and distinguished history”, says the International Colored Gemstone Association in the US.

Prices give the rankings. Diamonds generally come top. Ruby and emerald are also priced higher than a top quality sapphire, due to their rarity. For a one-carat ruby stone the bill is likely to be between $250 and $10,000 per carat. Truly quality gems will cost more.

De Beers knew all the tricks

What hope of using De Beers’ tricks for any of those other 130? Miners are always on the look-out for new money raisers. Plus, given quantities are often too small for the mega miners this can be rewarding territory for the minnows.

Rising stars of gemstone jewellery are, apparently, tanzanite, tourmaline, aquamarine, imperial topaz, and tsavorite garnet. Gems in this category sell at between $50 and $1,000 per carat for an average-to-good quality one-carat stone. Larger stones go for more. For example, large examples of tsavorite – can easily reach $3,000 per carat.

There is another category – connoisseur gems. These have a more specialized market because they are rarer. Here are all sorts of marvellous names – black opal, jadeite, pink topaz, chrysoberyl cat’s-eye, fancy coloured sapphires, and even rarer stones like demantoid garnet and alexandrite. The lists give prices ranging from $250 to $5,000 per carat. Yet top quality alexandrite with a good color change regularly command at least $10,000, even in a one-carat size.

Collector’s gems include spinel, zircon, moonstone, morganite and other beryls, and many even rarer ones. They are little-hyped as they are not many around to make marketing worthwhile. Red and hot pink spinels can command a few thousand per carat, but most of the gems in this category will sell for hundreds, not thousands.

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Lastly, well inside present budgets, there are the affordable old favourites and some new gems. These are amethyst, white opal, citrine, ametrine, peridot, rhodolite garnet, blue topaz, iolite, chrome diopside, kunzite, andalusite, and many ornamental gemstones such as lapis lazuli, turquoise, onyx, chrysoprase, nephrite jade, and amber. Prices for these gemstones range between $5 and $100 per carat for a one-carat stone.

…yet diamonds may not be best

Of course, it’s questionable whether risking money on an obscure mineral as recession looms is a good idea. Better go for diamonds? Not necessarily! The trade fears a collapse after sharp rises in prices of large stones. Fuelling the market are stock-piling insiders. To them it seems the best haven, as the financial news grows ever more dire, are diamonds.

A warning has come from right at the centre of the trade – from America’s maverick diamond trader Martin Rapaport. “Higher prices brought about by internal diamond industry speculation are not sustainable and may result in significant financial loss,” he says.

And added: “If a significant component of the price level is based upon internal diamond industry speculation that prices will continue to rise, then even a slight short-term decline could cause a collapse.”

So, there is nothing wrong with checking for winners among the lesser gems. That is certainly the view of one of London’s most successful investors – Dr. Graham Birch who heads BlackRock’s Merrill Lynch natural resources team.

Tucked away in his World Mining Trust portfolio is a little £50m AIM stock – Noventa. It makes up just 0.2% of his £1.2bn portfolio. It’s worth looking further into, though, when it’s been picked by a manager whose fund’s share price has risen by 421% over the last five years, 185% in the last two.

One gem Noventa produces from its Mozambique mines is morganite. This is a rare pink beryl gemstone. It’s from the same family as emerald and aquamarine. There is an exclusive joint venture with NASDAQ-quoted jewellery manufacturer LJI, whose retail jewellery chains span across China. Noventa sells its rough morganite at $1,670 a kilo to LJI, and gets 49% of any jewellery sales profits on top of that.

And as a hedge for its jewellery business Noventa also mines tantalite. Key use of this rare stone is in capacitors for electronics and mobiles. Supply/demand balance is forecast to slip into deficit. Top of the pops rating comes from the fact that the US Defence National Stockpile Centre exhausted its inventories in 2006.

Tiffany’s made tanzanite a winner

Another little AIM gemstone miner is TanzaniteOne. This one mines the gloriously blue tanzanite in, of course, Tanzania, but also mines tsavorite. Fascinating company this but, by the way, the share price is heading south; it seems investors don’t like the latest news. It cannot be the figures – they show some good rises. One can only deduce that perhaps they don’t like the latest change to local management. A bit of resource nationalism going on here?

TanzaniteOne practically invented tanzanite. Discovered only forty or so years ago, it was not really marketed until the 1990s. The amazing thing about gemstones is that a number of others have equally short histories. Seems we are all suckers for a new pretty face – though the face of this brilliant blue stone has to be heated to 450 degrees to develop its colour.

The disadvantage to these new stones is that they carry no myths or magic. Key to their success is the way De Beers played diamonds – marketing. It can be done! Tanzanite became popular following marketing by legendry New York jeweller Tiffany. In 2002 the stone was added to its lists by Jewelers of America as one of the December birthstones.

So, keep searching!

Erin and Isabel

P.S. We’ve just heard the first excited whisperings of a new daily email that will pool Fleet Street’s collective genius, keeping you up to date with the sharpest opinions on the very latest financial news. Stay tuned, there’ll be more on this soon!