Silmarils

Creation

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During the Years of the Trees, an elf named Fëanor would forge the greatest creation of his life and possibly of the whole elven race. Fëanor would craft three gems using some of the essence of the Two Trees (Laurelin and Telperion). Many wondered at their beauty. Upon their creation, the silmarils were hallowed by Varda so that no hands of evil could touch them without being burnt. Fëanor often wore the silmarils openly until he became paranoid that someone would steal them from him and thereafter he locked them in an iron chamber.

Fëanor wearing the Silmarils.

Theft

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The silmarils would be stolen by Morgoth and Ungoliant and Fëanor's father would be killed. After Morgoth stole the silmarils, he and Ungoliant fled back to the North of Middle Earth.

Morgoth's Crown

In the old evil fortress of Angband, Morgoth would forge the three silmarils into an iron crown. The weight of the crown was heavy on Morgoth's head and his hands were forever burnt from having held the silmarils for so long.

Morgoth and his crown.

Anger of Fëanor

Fëanor was angered greatly by the theft of the silmarils and the slaying of his father. So he and his seven sons vowed to pursue Morgoth and wage war on anyone who would keep the silmarils from them.

Fëanor also persuaded the greater part of the Noldor to return to Middle-Earth with him. On their way back to Middle-Earth, they would do a very evil act. The Noldor needed ships to cross the ocean and the Teleri, who were expert shipwrights, refused to help the Noldor return to Middle-Earth. Fëanor was upset at this and so he and many of his followers attacked and killed many of the Teleri and stole their ships. For this, the Noldor were cursed and not allowed to return to Valinor. This event was called the Kinslaying at Alqualondë.

The Kinslaying.

Prophecy

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There is a prophecy of peace on Arda after the three silmarils are recovered and returned to the valar. They will be broken open and Yavanna will use their light to revive the Two Trees and the light of the Two Trees will fill Arda, bringing in a new age of eternal peace.

Thus far, only one has been found and it is currently the property of Azeb. The locations of the other two are unknown. It is thought that the other two were destroyed during Dagor Dagorath.

The Silmaril in Gondolin.