Cave pearls are formed in much the same way a real pearl is formed. From Wikipedia: A cave pearl forms when the water is moving too vigorously to form a stalagmite. A nucleus of matter (such as a grain of sand) becomes coated with calcite, and the current then provides a rotation to the nucleus in such a way that it is coated evenly. In this manner, concentric layers build up over time, in much the same way that a biological pearl forms within a mollusc. There may be microbial action involved in the formation of cave pearls.