Shandong's precious stones soar in value

When Zhou Weixia left her job as a bank clerk to conduct sapphire trading with her husband, she had no idea the price of the local stone would skyrocket more than 50 times over the last decade.

But now the 28-year-old from Changle county in East China's Shandong province, one of the world's major sapphire production areas, is seeking opportunities to buy and store as much sapphire as possible, betting that the price will keep increasing to a new high in coming years.

"I paid 20,000 yuan ($3,175) in 2007 for a 24-carat sapphire and I refused to sell it when someone offered 400,000 yuan just a few days ago," said Zhou, dressed in a luxurious fur coat, as she pointed at a sparkling blue stone.

"It's very hard to find such a fine star-sapphire (a rare type of gem displaying a pattern of stars) now. The price will stay high. I won't take less than 700,000 yuan," Zhou said.

Ten years ago the average price of a one-carat sapphire was only dozens of yuan on the local market, but now a one-carat general sapphire may cost 2,000 to 5,000 yuan and high quality stones cost at least a five-digit figure for each carat, according to Zhou.

Zhou isn't the only one in Changle who has made a fortune out of the precious stone. Sapphire trading has created a handful of millionaires and even billionaires in the small county town.

About three hours drive from Shandong's capital city Jinan, Changle is one of the few places in the world with rich sapphire reserves. Its sapphire is characterized by large size, intactness and purity of color. There are also main features that distinguish it from those of other producing areas in the world, such as Thailand and Sri Lanka.

However, local people treated the dark-blue gem as valueless ordinary stones until 1986, when the region was found to boast 450 square kilometers of sapphire-rich land with deposits totaling more than one billion carats.

Since then, gem dealers and collectors from other parts of the country and even from abroad started appearing in the county and tried to buy rough sapphire deposits in bulk at incredibly low prices. The region soon became a collection of privately-owned mines.

"At first we didn't know much about sapphires and we were just so glad that someone wanted to pay for them," said Liu Hongchang from Wutu village. He began to dig for the stones with his fellow villagers in 1999.

The local government started to place restrictions on exploration from 2008 and banned any form of mechanized mining last year, citing concerns about national resource protection. It significantly reduced production and caused the price of sapphires to shoot up.