The story of the Silmarillion revolves around the creation of all things in J.R.R. Tolkein's fantasy universe, from the elements to the stars, to the first beings and to Middle Earth itself. And of all the many amazing things that were created in the universe in all the ages of the world, before the stories of The Hobbit or the Lord of the Rings take place, one of the most precious is the Silmarils.
The Silmarils are very rare gems, so rare in fact that there were only three of them ever in existence, and many wars were fought to claim them. They are said to be the most covetous objects ever to exist, even more so than the Arkenstone is to the dwarves of Erebor. They were created by an ancient elf, who was born with gifts of craft and skill far beyond the measure of any seen before, and his name was Feanor.
‘Feanor, becoming to his full might, was filled with a new thought, or it may be that some shadow of foreknowledge came to him of what drew near; and he pondered how the light of the trees and the glory of the blessed realm might be preserved imperishable.’
When the longing for the Silmarils first came to him, Feanor sought far and wide for the perfect things to include in his masterpiece. Such materials ranged precious elements found in the air around him to the golden hairs of Galadriel; things that were, up to that point, the most beautiful things he had ever laid eyes upon. Galadriel denied him of course, but Feanor went on to produce the stones regardless, and in doing so he set a chain of events into motion that would change Arda forever. But what are the Silmarils actually made from, and why did they become so desired by all who saw them? The answer is tied up in the terrible fate that befell the first beautiful things of the world at the hands of Melkor.
When the world was first made, Yavana, one of the Ainur who loved things that grew, sprung forth two beautiful trees that emitted a silver and gold illumination. These were the Trees of Valinor, and their light was so pure that it stayed with all who saw it and gladdened their hearts. But when Melkor became twisted and evil, the trees were destroyed, and their light was extinguished. As in the above quote, perhaps Feanor somehow had a strange sense that this terrible thing would occur, because he blended the light of the trees into his creations. Yet, that alone doesn't tell readers exactly physical material the Silmarils were made of. In fact, the text tells readers that the knowledge is destined to remain hidden until some distant date in the future:
‘As three great jewels they were in form. But not until the End, when Feanor shall return, […] not until the sun passes and the moon falls, shall it be known of what substance they were made.
Therefore, a part of the reason that the jewels are so coveted is precisely because their material makeup is unknown, which gives them that alluring air of mystery. However, one thing that the Silmarils do definitely contain is some of the last light of the Trees before their death, as Feanor sought to preserve that beauty in the crystals:
Yet that crystal was to the Silmarils but as the body is to the Children of Illuvatar : the house of its inner fire, that is within it and yet in all parts of it, and its life. And the inner light of the Silmarils Feanor made of the blended light of the Trees of Valinor, which lives in them yet though the Trees have long withered and shine no more. Therefore even in the darkness of the deepest treasury, the Silmarils of their own radiance shone like the stars of Varda […]’
But of course, others' desire for the Silmarils goes beyond their beauty, as the gems are powerful as well. The Ainur wish to use the Silmarils to restore the trees, to heal their wounds and bring them back to life again, but in doing so, they would destroy the jewels themselves. Melkor wants the Silmarils purely out of his destructive nature; he wishes nothing more than to destroy and take away everything that the other Ainur hold dear.
Lastly, Feanor wants the Silmarils back because he knows that all of his powers of creation were poured into them. He knows that, (although he is the only one who knows exactly what they are composed of he will never be capable of creating such gems again, especially now that the Trees are lost. They were a once-in-a-lifetime deal, and once they are lost, they are lost for good.