Buyer Beware: Closer Examination of the Burj Alhamal Ruby Casts Doubt on its $120 Million Valuation

April 21, 2022

An astonishing record-breaking rough ruby of 8,400 carats, weighing 2.8 kilograms, from Winza, Tanzania has gone on display at the Waldorf Astoria Dubai International Financial Centre. According to Patrick Pilati, a director of the company that owns the ruby, SJ Gold & Diamonds of Dubai, said it is one of the largest rubies in the world and is valued at approximately $120 million. As the company's crown jewel, they have named it 'Burj Alhamal'.

However, a closer examination of the stone casts doubt on its estimated valuation. A closer look at the details reveals the stone may not be what it seems. For example, a 5.00 carat stone weighs about 1.00 gram. Therefore, a 8,400 carat stone would weigh approximately 1.68kg, not 2.8 kilograms. Second, several rough ruby-in-zoisite specimens 5 to 10 times larger have been documented. Third, rubies from Winza are not found in zoisite. The stone is likely from Longido, Tanzania. Finally - and most importantly - current valuations for ruby-in-zoisite specimens do not support the estimated $120 million valuation for the Burj Alhamal.

So, what could the Burj Alhamal really be worth? Steve Ulatowski of New Era Gems is an expert in ruby-in-zoisite specimens. He has sold a substantial amount of this material at the going rate of around US$350 per kilogram, including the approximately 3kg specimen he is holding in the photo below. "Maybe US$1200 if we were lucky…wholesale, most likely [this would sell for] $750."

Another example that undermines the extraordinary valuation of the Burj Alhamal is the 2 kg ruby-in-zoisite specimen named the "Gem of Tanzania." It was initially valued at £11m (US$14.35m) and owned by UK Wrekin Construction. The company used the valuation of the stone to help prop up its balance sheet. Forced into bankruptcy, the court-appointed administrators Ernst & Young declared the 2kg stone's £11m valuation and its accompanying documents as forgery. With 60 offers, it was eventually auctioned for a mere £8,000 (US$10,400), leaving creditors with massive losses exceeding £45m (US$58.7m).

But there's still more evidence that points to an inflated valuation for the Burj Alhamal. A 228,000 carat (45.6kg) ruby-in-zoisite specimen offered by Bonhams in Los Angeles on 20 May 2014 carried an estimated value of US$100,000-$150,000. This enormous ruby specimen is 16 times larger than the "Burj Alhamal." It failed to sell at the Bonhams auction. In other words, bidding did not reach the minimum estimated value of US$100,000 (or US$2,200 per kilogram).

Instead, the Bonhams stone, which the listing states was carved from a "single specimen of Tanzanian ruby rough" by a famous Idar-Oberstein carver, had a finished weight of 0.85kg and sold at auction for $13,200 or $15,500/kg. This is another great price/value comparison to the Burj Alhamal which, from its photos, is likely of similar or lesser quality. The National photo of Burj Alhamal shows that the stone may only be about 25% ruby and 75% zoisite. This means the actual ruby content is about 0.7kg - considerably less than the 0.85kg of the Bonhams carved toad.

The 2.8kg (or 1.68kg?) "Burj Alhamal" is only one of the gems in the SJ Gold & Diamonds Callisto collection, which includes 12 rough rubies that weigh a total of "an astonishing 236,000 carats" according to Tariq Saeed, writing for Dubai's Periodical Today news website.

SJ Gold & Diamonds should pay closer attention to auction records when publishing any eye-popping valuation of the stones in its collection. Otherwise, experience from the likes of the Gem of Tanzania will dictate the obvious next question: "Why?"