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Market Manipulation Yields Price Spike in Topaz


Mine Owners Manipulate Local Market By Richard W. Wise, G.G. 2007

Collectors in the U. S. have noticed a substantial spike in topaz
prices. Rumors have recently been circulating in the trade to the
effect that price hikes were the result of forced closings of topaz
mines by government environmental officials. I heard similar rumors
from usually well informed dealers on a trip to Brazil in late

According to David Epstein, author of The Gem Merchant and an
American dealer living in Brazil the latest price increases are a
result of market manipulation by the owners of Capao, Brazil’s
largest commercial topaz mine. According to Epstein, Capao’s owners
are systematically buying all the peach topaz produced by the 10-12
smaller mines currently active in the area in the topaz producing
area. Capao is located about five kilometers from the small village
of Rodrigo Silva almost dead center of the two hundred ninety square
kilometer topaz belt running in an east-west direction west of Oro

This buy up has been targeted at stones in the peach hues that the
mine owners consider undervalued. Peach can be best defined as a
pinkish-orange-brown to orangy pink range of hues. You will note
that I do not use the term “Imperial” because the traditional
distinction between precious and imperial makes little sense. Is an
Imperial topaz not preciousi Imperial is one of those terms that
confuse rather than clarify. I like the terms spring, ripe and
winter peach. A bit facifuli Yes, but fairly descriptive. As the
orange tone deepens the stone goes from spring to ripe to overripe
(winter), rotten would work but thats a hell of a way to market a

The geographically limited production of topaz has made the market
control scenario more than just possible. Commercial quantities of
precious topaz (all topaz other than the blue irradiated material),
is mined in just one place, a twenty-square mile area in the
Brazilian state Of Minas Gerais immediately adjacent to the city of
Oro Preto. Capao is, in fact, one of only two large mechanized
mines and the only one that currently sells commercial quantities
into the world market. According to Epstein Capao’s owner Dr.
Wagner and chief buyer Sr. Edgar have been aggressively buying up
peach stones for more than two years.

Capao’s aggressive buying has born fruit. Prices in Brazil have
jumped between two to three times previous levels. Oddly enough
topaz prices in the higher priced pink, red and sherry colors have
remained stable. According to Epstein, Capao’s principals believe
that prices in these rarer categories are already high and they
miners feared a falloff in demand if they attempted to push them

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