Why Australian black opal is one of the most expensive gemstones in the world

  • High-quality black opal can cost $10,000 per carat.
  • But even for an expert, finding it isn’t easy.
  • After investing tens of thousands of dollars, a miner might not find a single gem.
  • See more stories on Insider’s business page.

Following is a transcript of the video.

Narrator: High-quality black opal can cost over $10,000 per carat, making it one of the world’s most expensive gemstones. But mining black opal isn’t easy. After investing tens of thousands of dollars, a miner might not find a single gem. So, what makes black opal so hard to find? And why is it so expensive?

Black opal is one of the most enchanting stones in the world, sought after for its seemingly infinite display of colors. Compared to common opal, which is usually one color, black opal exhibits many different colors contrasted by a dark body tone.

Frederick: It’s simply the most stunning gemstone on the planet. It’s just remarkably beautiful. You can put the thing away for a week, pick it out and look at it, and you can still see things inside it that you’ve never, ever seen before.

Narrator: Opal is found in several parts of the world, including Ethiopia, Brazil, and Mexico. But over 90% of the world’s opal comes from Australia. And a lot of the black opal is found here, at Lightning Ridge. It’s located on the edge of the Outback, with a population of just over 2,000 people. Miners have been searching for opal here for over 100 years. But even for experts, finding black opal isn’t easy.

Frederick: If you were to start mining tomorrow, and once you learn mining skills — and I’ve been mining for 40 years — we’d be an equal chance, just because there’s nothing really that can tell you, “Oh, there is opal in that piece of ground” or “There’s not opal in that piece of ground.”

Narrator: Miners start by drilling a vertical shaft in an area that they think contains opal. Then they must clear out an underground room large enough to start digging at the rock.

Frederick: The basic idea of mining is basically extract the opal clay out from the ground, put it onto a truck, I take the truck to a puddling site in town, and check if there’s opal in that.

Narrator: The equipment needed to mine and the cost to register your claim can be extremely expensive.

Frederick: Really, if you wanted to rock up here and be serious, it’d probably … need $150,000 to $100,000 in your pocket to have a go.

Narrator: But buying the equipment doesn’t guarantee that miners will find black opal.

Frederick: Some people will go, “Oh, there’s definitely money there, because next door they got $200,000 and there was a bit of color drilled up here. It’s got to have come over.” And there’s a whole epic story of why there should be opal there, and you go and dig there, and it’s not.

Narrator: Miners search for areas in the rock with trace amounts of opal. They follow these spots, called “nobbies,” hoping to find more opal deeper in the rock.

Frederick: You’ll keep going in a straight line till the trace runs out, and then come back where there was trace in the wall, go left and right, and then if that stops, then you come back and do it again. And you can come back and do it again. So you’ve always got that in the back of your head, you know, “When do I leave, how long do I stay, have I stayed too long? I’m wasting time, I’m wasting money for my next patch.”

There’s a nobby there. When you’re in a really good pocket, see how these nobbies are sitting close like that together? They can be like a cluster, like a bunch of grapes. They’re all sitting around each other, and they’ve all got color. Hear that? [scraping] See that sound? It’s like glass. So, you get that big one out, there we go. Doesn’t have any value. Common black opal.

Narrator: Opal is formed when silica-rich groundwater hardens in rock over millions of years. Large silica spheres within the stone diffract light, creating vibrant colors. That play of color makes each gem unique. But for miners like Frederick, digging for black opal is a gamble.

Frederick: The human factor is the biggest factor in finding opal. If you’ve got a piggy bank of $10,000 or $20,000 and then all of a sudden in one month or two months you’ve blown all of that budget because you’ve had breakdowns and you’ve had things occur that you didn’t think of, and then you go, “Well, I’m $20,000 down. What do I do here?”

I’ve been full-time mining for about over 45 years, and quite often I say to myself, “How did you do it? How did you survive that long making it your only job?” I’ve done … I’ve done good. Not great. I haven’t been in the millions. I haven’t been up there in the fantasy pocket, you know?

Narrator: Once rough opal is extracted and processed from the dirt, it has to be cut and polished. This is when the real value of the gem is determined.

Jo Lindsay: A black opal can vary from … starting at maybe $1,000 a carat for run of your mill and going right up to tens of thousands of dollars for that really exquisite top quality. The main stone is 241 carats. A few thousand dollars a carat wouldn’t be unreasonable. A lot of money. [laughs]

Narrator: The color, brightness, and patterns can all influence the price of black opal.

Jo: What you’re looking for in the best-quality opal is a black stone with really bright color and as much red and other colors as possible. So, the most valuable black opal of all is a really bright red stone on a very black base that just glows. And you don’t see them very often at all.

Narrator: That lack of supply is a huge driver for the price of black opal. We can barely keep up with the demand at the moment. As soon as you find a gem-quality stone, you know you’ve got a buyer for it.

Narrator: Between 2005 and 2006, approximately $30 million of opal was mined at Lightning Ridge. And for fans of black opal, there’s simply nothing else like it. It’s just a magic stone, and when I came to Lightning Ridge, just the beauty of it captivated me.

Frederick: It’s an awesome job. I would love to find two or three more good claims, like, one more good patch, get rid of the debts that we have, and set it up and offer the opportunity for my son to take over the job.

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Copper is ‘the new oil’ and could reach $15,000 by 2025 as the world transitions to clean energy, Goldman Sachs says

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A worker inspects batches of processed copper at Mutanda Mining Sarl, Democratic Republic of the Congo

Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four years, Goldman Sachs said in a report on Tuesday.

Increased demand and likely low supply are set to drive up the price from the current levels of around $9,000 per ton to $15,000 per ton by 2025, the bank said.

As a cost-effective metal, copper is majorly important in the process of creating, storing and distributing clean energy from the wind, sun and geothermal sources as it has the physical attributes needed to do so, Goldman’s team of analysts, led by Jeff Currie, said in a report titled “Copper is the new oil”.

“Discussions of peak oil demand overlook the fact that without a surge in the use of copper and other key metals, the substitution of renewables for oil will not happen,’ the report said.

Copper will be needed to create the new infrastructure systems required for clean energy to replace oil and gas, however there has not been enough of a focus on this so far according to the report.

Demand will therefore significantly increase, by up to 900% to 8.7 million tons by 2030, if green technologies are adopted en masse, the bank estimates. Should this process be slower, demand will still surge to 5.4 million tons, or by almost 600%.

Copper is a key part of sustainable technologies, including electric vehicle batteries and deriving clean energy. As the deadline of the Paris Agreement comes closer, political and economic pushes towards renewable energy and green technology are becoming stronger.

Just two weeks ago, US President Biden announced an infrastructure package worth $2 trillion, which specifically encourages new sustainable technologies and infrastructure projects.

In its current state however, the copper market is not prepared for the increased demand, Goldman Sachs argue. The copper price has risen by about 80% in the last 12 months, but there hasn’t been a matching rise in output.

“The market is already tight as pandemic stimulus (particularly in China) have supported a resurgence in demand, set against stagnant supply conditions,” Goldman said.

The benchmark three-month copper futures price on the London Metal Exchange was last up 1.4% at around $9,022 a ton, while NYMEX copper futures were up 1.5% at $4.09 a pound.

As the expansion of mines and creation of new copper production fields takes years, this is likely to lead to shortages of the metal. To prevent a depletion of copper supply within two years, prices must rise now to encourage investment and an expansion in output, Goldman said.

At present, Goldman Sachs “now estimate a long-term supply gap of 8.2 million tons by 2030, twice the size of the gap that triggered the bull market in copper in the early 2000s”.

Copper production declined in 2020 due to government restrictions and lockdowns during the Covid-19 pandemic. The world’s largest copper producers, Chile and Peru, were hit especially hard by the pandemic, which could impact supply until 2023, according to commodity analysts S&P Global. Last week, prices spiked following Chilean border closures related to the pandemic.

Global copper production is however predicted to increase by 5.6% in 2021 after declining by 2.6% in 2020, according to a GlobalData report published in February.

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Bitcoin miners raked in more than $1 billion in combined earnings last month. Here’s how they make money.

Bitcoin miners earned a combined $1.1 billion in January.

  • Bitcoin mining is the process that allows new coins to enter circulation, adding to the crypto ecosystem.
  • Miners receive bitcoin as a reward for verifying “blocks” of transactions on the blockchain.
  • Last month, they earned more than $1 billion in combined earnings. Here’s how they do it. 
  • Visit the Business section of Insider for more stories.

Bitcoin is created on a decentralized network called the blockchain, where a vast network of digital “miners” work to verify transactions at any given time.

These miners earned a combined $1.1 billion in January, up 62% from December, when bitcoin’s price surged to $42,000. The road to making this amount of money is no easy feat.

What do bitcoin miners do?

Miners have the responsibility to audit transactions on the blockchain to ensure the legitimacy of the network. They also work to avoid the “double-spend” scenario, in which a bitcoin owner could sneakily spend the same coin twice through duplication or falsification.

Miners don’t necessarily work as a team. They work to compete with each other in order to add the next “block,” or a record of all bitcoin transactions, to the chain. A block contains a partial record of the most recent transactions and carries 1 MB (megabyte) worth of data.

The miner who receives a reward would be the first among a bunch to run through hordes of number combinations to solve a numeric problem, known as proof of work, to arrive at an acceptable 64-character code. The code of this winning block helps keep the blockchain secure. It would normally look something like the last line in this image: 

Screenshot 2021 02 19 at 14.43.43

By being the first to solve the equation and successfully adding the next block to the chain, the miner is rewarded a certain amount of bitcoin. Only one such block can be added at a time, and each one takes about 10 minutes to verify and attach.

Over the course of the next 20 years, a total of 21 million coins will be released.

What are the rewards worth?

In 2009, the first time bitcoin was created, miners were rewarded with 50 bitcoin per block. But according to a mandate by Satoshi Nakamoto, rewards for mining are halved every four years. The rewards were cut to 25 bitcoin by 2012 and to 12.5 bitcoin by 2016.

As of February 2021, miners gain 6.25 bitcoin for every new block mined – equal to about $330,475 based on current value. They’re also allowed to keep the transaction fees from each trade carried out on that block, which is worth $20 per trade.

An estimated 1 million bitcoin miners are in operation, at present.

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