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Thursday
Jul272006

The State of the World's Jade Markets

Kirk Makepeace, an old friend, FOJ member, and the world's most successful nephrite miner, has the largest jade operation in the world. We asked Kirk, a Canadian who lives and works in British Columbia, to continue his annual analysis of the world's jade deposits and markets.

In general, production from all mining locations in Canada has been down for the past two years. A result of ownership changes at Kutcho, a lack of material at Polar, the continued closure of Ogden, and slower than planned development at the Cassiar asbestos mine are all causes of lower nephrite production. Demand is greatest for the high-grade material, but as can be expected, fine quality is always in the shortest supply. The dramatic decrease of the value of the US dollar and resulting increase in value of the Canadian dollar has hurt the profitability of mining operations. The producers have been conditioned to expecting much of their profit on the difference between the two currencies. In 2001 the difference in the rates was 1.60 CDN to $1.00 US; now, instead of a 60 percent Canadian premium, the currencies are virtually at par: 1.09 CDN to US$1.00. As almost all jade sales are conducted in USD, the exchange rate has seriously affected our Canadian cash flow. Buyers are reluctant to accept a currency fluctuation as a strong argument for increasing our prices. Other inflationary costs, (OIL, OIL, OIL) have also hurt jade operations. Government regulations continue to tighten, making mining in Canada viable for only the very rich and well-financed large corporations. It would be difficult to bring a new jade discovery in Canada into production. Somehow, I do not think Sasha (a friend and Siberian jade miner) has this problem.

Diamond Drilling at Polar Mine

Figure 1 Diamond Drilling at Polar Mine in search of elusive jade veins. Large jade boulder sits at bottom of an open jade pit.

Kutcho jade mine

Figure 2 Loading jade boulders for Italian tile project at the Kutcho jade mine.

Cassiar Mine

Figure 3 Year end production at Cassiar Mine shows many small jade boulders recovered from massive tailings piles. A costly jade recovery project yields many high quality stones.

CONSUMPTION

New Zealand

Although the New Zealand market is extremely strong, it depends on the very clean dark green jade that is almost exclusively supplied from a British Columbia Cassiar mine. The Cassiar operation relies on exports to the NZ market for almost 75 percent of its production. Because NZ has always had a higher cost associated with jade, they are prepared to pay a big premium for Cassiar jade. Ogden is another source for dark material, so we are considering re-opening Ogden to take advantage of the NZ market.

China

China is reluctant to pay what New Zealand does for Cassiar material. Also it is less interested in darker jade. Sales to our Taiwan joint ventures remain strong, but they consume mainly middle-of-the-road jade, which they mostly re-export from China to the USA, NZ, and back to Canada. The Chinese market has been price sensitive because much of the jade is used in the tourist market, which does not welcome dramatic price fluctuations. Jade supplies from Russia, now about equal to the output from Canada, are creating additional competitiveness in pricing.

Do not expect logic in the jade market with China. White nephrite has skyrocketed in price, but green nephrite has not. Many stone markets still commonly refer to green nephrite as "jasper." The huge jadeite industry (and it is HUGE) does not welcome any competition from nephrite into its market. There are new Chinese billionaires in the jadeite supply and distribution, rivaling diamonds and DeBeers. On my most recent trip to China I saw an area equal to about 10 city blocks near Guangzhou (Canton) bulldozed as part of a new jadeite distribution and manufacturing facility. The importation of jadeite into China, regardless of what others say, is in thousands of tons a year. The main players do not want a natural-colored green jade to interfere with this lucrative jadeite market.

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Figure 4 Guangzhou, China jade auction held 4 times a year. More than 2000 tons are for sale in closed and heavily guarded yards that covers 5 acres. The auction is closed to the public.

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Figure 5 Guangzhou jade auction. Buyers inspecting jadeite boulders with high-tech flashlights.

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Figure 6 Guangzhou jade auction. This selection of jade was available for bidding. My camera was taken away after this photo was taken.

Our office receives inquiries daily from people wanting to export jade to China. Invariably, they say they know someone who knows someone else who thinks it is a great idea to sell jade from Canada to China. Most of them, who do not know the first thing about jade, are shocked that we are already selling jade to China. There is little room for a middleman in the nephrite business because by the time he adds his profit, the deal goes sour. The future of marketing of jade in China will be as it is for most other products in the world-a 'Costco Warehouse or perhaps a Jade-Mart. The concept of an auction based on the successful jadeite marketing has been floated many times, but there appears to be little interest to let nephrite join that club. As Fred Ward often says, "The Chinese have lost their history, their heritage, and the thousands of years of love and respect for nephrite. They have reversed history. They think jadeite is the Stone of Heaven, not nephrite."

North America and Europe

Rough jade sales to North America and Europe are minimal. Lapidary sales account for 1-2 tons a year. Jade sold for artistic sculptures and jewelry varies year to year. A single artist may purchase a one- to two-ton boulder for a project, which will match the purchases all other artists in a single year. Noted Canadian jade sculptor Lyle Sopel has been the single largest artistic buyer of Canada's nephrite jade for more than 20 years, with annual consumption averaging 5 tons a year. With Lyle now semi-retired and with a stockpile of jade that will last for a number of years, the jade industry will be losing its major North American client.

Jade artists from California, Mike Burkleo, in particular, are becoming an increasingly important market for Canadian jade.

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This piece came from Kirk Makepeace's Polar Jade mine and is about 30 inches high.

Finished products (nephrite jewelry and sculptures) are showing strong growth in both Europe and North America. There has been a quiet revolution in jade sculptures away from wildlife to a modern style that highlights the quality and character of the jade. With strong Maori influences, the styles are smooth and contoured. They take advantage of translucency and natural variation of colors. Artistic sculpted jewelry follows the same design path. The traditional souvenir market survives, but the newer styles provide a much higher return for jade artists and stores and galleries featuring new jade items.

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Figure 7 New styles of Canadian carvings show a New Zealand Maori influence.

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Figure 8 Jade pendant and jade leaf sitting in bed of broken jade beads

DIMENSION STONE

Jade as an industrial material remains "the carrot at the end of the stick" for all jade producers. The bulk of the jade remaining at Canadian mines is suitable for tiles, flooring, countertops, but not jewelry and sculpture. Thus, the promise for profit for the miners has always been to find a method to develop and market jade for industrial uses. Thousands of tons of jade remain in inventories waiting for technology or market conditions to ignite Canada's jade industry. Technology has arrived with new machines in Italy capable of cutting entire massive jade boulders into slices as thin as 2.0 mm (less than 1/8") without breaking. Coupled with ultramodern machinery now available in China, tools are capable of cutting and polishing at a fraction of the cost of 20 years ago.

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Figure 9 Shanghai Stone Fair (April 2006) with massive selection of diamond blades and new stone processing equipment

Marketing now appears to be the remaining challenge as most of the world's stone industry and associated architects and designers are unaware of the availability of nephrite and its vastly superior endurance qualities compared to marble and granite. For a thin translucent tile, there is no stone that can compare to jade in strength.

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Figure 10 Translucent Canadian nephrite jade tiles backlit in Buddhist temple , Chaing Rai, Thailand

There are currently two projects underway to test-market jade as an industrial stone. Forty tons of large jade boulders are being tested in Italy's largest tile factory to provide slabs for countertop and flooring. Distribution of this product via a worldwide network of stone dealers will be available in early 2007. Twenty tons of jade are currently in China for a test in producing conventional 4"x4," 6" x 6," and 12" x 12" tiles. Our company, Jade West, now offers new "laminated to acrylic" thin jade tiles for backlight applications, such as stair risers, windows, walls, and floors. Our 12" x 12" tiles start at $125.00/square foot.

SUMMARY

The market for Canadian nephrite is in a favorable state with inventories very low. As commodity prices for almost all raw material rise, jade will be able to piggyback on an upswing. However, to offset the decrease in the exchange rates between the Canadian and US dollars, a 50 percent increase will only bring us to where we were five years ago. An appreciation of jade as art form and sculpted jewelry will put pressure on the demand for higher grades of jade, which are currently scarce. As always, the market relies on exports to China to keep the industry strong. If China removes import duties on rough jade, which seems likely, demand will probably increase. The industrial use makes only baby steps each year. I expect that 2006/2007 will see the first jade tile products available for sale to the public in more than 20 years.

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Figure 11 "Emperors Stone," a 5 tonne Polar Jade boulder currently on tour in Europe

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Figure 12 Close-up of "Emperors Stone." The nephrite jade was polished through the very thin "skin" of this unique Polar Jade boulder

By KIRK MAKEPEACE

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Reader Comments (14)

Thanks Kirk, great article. I'll probably need a few more "Lbs" pretty soon :)

Brian
July 29, 2006 | Registered CommenterBrian Matheson
Kirk, another question, how much does that jadeite rock sell for in the market? Obviously there are many variables, but like a mid grade slightly green maybe like in the last photo you posted?

thanks,

Brian
August 2, 2006 | Registered CommenterBrian Matheson
Hi Kirk.

This is an amazing mountain of jade. I see a green
tree in the stone.
My name for it is "Jade Tree Mountain".

We hope to meet you someday!

Mark Mendoza
December 2, 2006 | Registered CommenterJade Hunter
Thanks for sharing such news.

If we can share some news on the supply and demand trends of Jade (Nephrite and Jaeite). How are these items priced in rough in different markets.

May 2, 2007 | Unregistered CommenterRizwan
This may be a rather pedestrian question, but how can I tell if some jade beads in my collection, which are labelled as Canadian Jade are, actually Polar Jade (which I understand to be a higher grade and rare stone) versus just-your-basic jade mined in Canada. Or is there, in fact, a difference at all? The beads are a lovely, uniform translucent dark green in color.

I would like to feature the stones in a project, and would love to refer to them as the "real thing - Nephrite, rather than Jadeite, but I'm not sure how to know. I would also like to discuss the difference between the Polar Jade, regular jade mined in Canada, and the difference in the quality between Canadian jade (nephrite) and the more common Chinese Jade on the market (Nehprite).

Thanks,

Paula Morgan
June 16, 2007 | Unregistered CommenterPaula Morgan
I am planning to buy Canadian nephrite beads which are dark green 12mm smooth round B grade (regarded as gem grade) by the seller, is this a quality to consider?

Somebody should really spark nephrite jade back into the market since it has more history and heritage than the jadeite jade.

Your honest opinion on the above 12mm dark green smooth round B grade beads will surely make a great impact on my buying concepts for nephrite jade.

Thank you,
Isabel

December 8, 2007 | Unregistered CommenterIsabel Chin
Dear Mr.Kirk,
We are the authorised Owner's representative of " The Largest,Single Piece Sculptured Jade in the World"- Approx Wt:13Mt, Ht:6.5ft. Lgth:14ft, Width:6ft.- Sculptured with the theme "Beautiful Landscape on the Cliff, depicting the Great Wall of China"- Color:95%pea green, 4%white, 1%black.- MOH's scale found hardness:4~6.5;- S.Gravity:3.1(Hydrstatic Weighing); R.Index:Rayner Dialdex Refractometer reading:1.62 ;- X-Ray Diffraraction and Electron Microphone Testidentified the presence of Nephritic and Serpentine material; - Origin: China; - Storage:W.Malaysia; - Price:USD 1.5Billion (Negotiable)- Commission: 2% from Buyer.- Please contact with serious buyers for viewing. - send us your e-mail address & we can send you the full details and picture.
Thank You and Regards.
Vejay Naidu / Ragunathan.
..................................
Dear Mr.Kirk,
We are the authorised Owner's representative of " The Largest,Single Piece Sculptured Jade in the World"- Approx Wt:13Mt, Ht:6.5ft. Lgth:14ft, Width:6ft.- Sculptured with the theme "Beautiful Landscape on the Cliff, depicting the Great Wall of China"- Color:95%pea green, 4%white, 1%black.- MOH's scale found hardness:4~6.5;- S.Gravity:3.1(Hydrstatic Weighing); R.Index:Rayner Dialdex Refractometer reading:1.62 ;- X-Ray Diffraraction and Electron Microphone Testidentified the presence of Nephritic and Serpentine material; - Origin: China; - Storage:W.Malaysia; - Price:USD 1.5Billion (Negotiable)- Commission: 2% from Buyer.- Please contact with serious buyers for viewing. - send us your e-mail address & we can send you the full details and picture.
Thank You and Regards.
Vejay Naidu / Ragunathan.
..................................
Dear Mr.Kirk,
We are the authorised Owner's representative of " The Largest,Single Piece Sculptured Jade in the World"- Approx Wt:13Mt, Ht:6.5ft. Lgth:14ft, Width:6ft.- Sculptured with the theme "Beautiful Landscape on the Cliff, depicting the Great Wall of China"- Color:95%pea green, 4%white, 1%black.- MOH's scale found hardness:4~6.5;- S.Gravity:3.1(Hydrstatic Weighing); R.Index:Rayner Dialdex Refractometer reading:1.62 ;- X-Ray Diffraraction and Electron Microphone Testidentified the presence of Nephritic and Serpentine material; - Origin: China; - Storage:W.Malaysia; - Price:USD 1.5Billion (Negotiable)- Commission: 2% from Buyer.- Please contact with serious buyers for viewing. - send us your e-mail address & we can send you the full details and picture.
Thank You and Regards.
Vejay Naidu / Ragunathan.(3c.ragu@gmail.com.my)
..................................
Hi .... good artical .... how dose one get to buy some BC Jade and have it exported to Japan ...
plus I would like to become a member of Friends of Jade and get on their mailing list

regards

Gordon Wells the only Nephrite Jade Carver in Japan
February 13, 2010 | Unregistered CommenterGordon Wells
Dear Kirk,
Just doing some research and found your site. Good to see some Canadian enterprise in action! In China, yet! Sad to hear of Lyle's semi-retirement, he nearly single-handedly introduced jade carving in N. America. Keep up the good work, I'll get back to you with an order as soon as I get some equipment in. If you have some connections that way, I'd love to hear about them. Yours, Grant Crawford/Sculptor
November 5, 2010 | Unregistered CommenterGrant Crawford
I am interested in Jade from Canada. However, when you have a carved piece from the 18th or early 19th century, in a white mutton, there is no comparison. Rare is the word for acquiring Jade of this quality, but I can appreciate the efforts to find new Jade in new locations.
I myself, stick with the auctioneers like Michaan's for carvings created hundreds of years ago by experts who took their time by hand to carve and polish lovely white mutton jade. I read there will be an auction in Dec. 2012 at Michaan's selling some superb white jade. I will be watching that one. Keep on searching for Jade...try to find my favorite, the white mutton.
November 1, 2012 | Unregistered CommenterLauren
i have nephrite best quality available in bulk. serious people can contact me
June 16, 2014 | Unregistered Commenteryahya
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April 10, 2015 | Unregistered Commenteraqeel

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