Sapphire Mining Market: Overview
Sapphire is an aluminum oxide that falls under the corundum metal category. Under general use, sapphires qualify as a jewelry item. Certain sediments or rock formations are the major natural sources for sapphires. Artificial or synthetic sapphires are also manufactured for industrial purposes of the remarkable hardness of sapphires and of aluminum oxide in general. These sapphires are used in some non-ornamental applications, including infrared optical components, such as in scientific instruments, wristwatch crystals, movement bearings, and very thin electronic wafers, which are used as the insulating substrates of very special purpose solid state electronics, especially integrated circuits and LEDs.
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Most sapphires come from countries with strict guidelines on how mining may proceed. In Sri Lanka, mining is regulated so the land is protected from over-use. Here, sapphire mining is restricted to small-scale operations where heavy machinery is forbidden. Natural untreated sapphires are rare and are mined in a manner that ensures a stable market and secures the deposits for future generations. Strip mining such as in some emerald mining operations creates tremendous environmental damage and only benefits a few large companies that have the capital for a large-scale operation. This type of mining also results in a market that will fluctuate heavily when new deposits are found, as the new production will flood the market and prices will drop. Some sapphire producing countries do not allow mining activities that damage the environment or create unstable economic conditions. These responsible fair trade laws are regulated well and have existed for years.
Sapphire Mining Market: Drivers and Restraints
The sapphire mining market is affected by certain positive drivers, namely the increasing demand of sapphire for the production of jewelry and LEDs. Secondly, new deposits and mining sites have been recently discovered in parts of Australia and South Africa that have attracted a lot of companies to start exploration and mining of the gem.
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Despite the positive growth, the industry has been facing certain restrictions in terms of extraction methods and the extent of extraction allowed. Government regulations have been put into place over concerns of ecological imbalance and environmental hazards that sapphire mining has caused over the years.
Sapphire mining has had a major impact on agricultural lands as well. Intensive capital requirement and availability of expertise for operations are also some of the factors that have hindered the progress of sapphire mining. Despite all the limitations, new opportunities lie in store. With the advent of new eco-friendly mining technologies, sapphire mining could see a spur of growth in the near future.
Sapphire Mining Market: Segmentation
Most of the world’s sapphire production and mining is carried out in Australia in the Asia-Pacific region followed by Sri Lanka, Myanmar Thailand, Laos, Malawi and Cambodia. The state of Montana in the U.S. leads the market in the North American region. No significant deposits have been discovered in Europe; hence sapphire mining there is limited. The African region also boasts a significant sapphire production dominated by Tanzania, Kenya, Nigeria, Madagascar and South Africa.