Myanmar (former Burma) produces almost 90 percent of the world’s rubies and is a leading international supplier of other gems and jade. The gem industry is controlled by the government, which was repeatedly criticized for bad labor conditions and insufficient control over the environment in the industry yielding a lion’s share of export profit to the military junta.
According to human rights groups, gem trade makes $300-$400 million per year to the regime. The U.S. embargo is the latest event in a series of moves to exert financial pressure on the junta.
Burmese rubies, particularly rare stones of “pigeon blood” color, are highly valued on the international market. The country is mining “emperor jade (nephrite)” of dark green color, which is very popular in China and other countries of this region.
The junta regularly holds international gems auctions selling thousands of lots of precious stones. Every auction nets no less than $100 million.
The International Colored Gemstone Association expressed its concern over the law passed in the United States and forbidding importation of gems from Myanmar. As it is said in the ICA statement, the association is worried about possible consequences of the ban for the poverty stricken population in this Asian country. The law adopted in the U.S. prohibits importation of Burmese gems and semi-precious stones (of which jade and ruby are the most important) including by way of third countries with a view to eliminate the primary source of income for the military junta ruling in the country.
Meanwhile the ICA reiterates that “its policies are in line with all national and international associations against the violent repression of individuals, human rights and pro-democracy movements in Myanmar.” The ICA has asked its members to stop buying Burmese gemstones from any sources associated with the country’s rulers. Nevertheless, the association fears that the U.S. ban may “cause damage upon poor populations engaged in mining, processing and trading activities in Myanmar and other countries.”
“Those who will suffer are the very people that the legislation intended to protect,” ICA President Andrew Cody said in his statement. According to him, it is a pity that the leaders of the country [the U.S.] and “the leadership in national, international and governmental agencies, people that are not really in-the-know as to what takes place on the ground, failed to consult our association on this issue.” ICA President added that, to his knowledge, no “collateral damage” study was undertaken.
The Burmese market sends contradictory signals. Thus, as early as mid-August it was reported that the law introducing embargo on importation of rubies and jades from Myanmar to the United States did not much impressed Burmese vendors of gems in Yangon (Rangoon). The sale of sapphires, rubies, diamonds, emeralds, jade and other gems at the Myanmar Gems Museum is thriving due to professional buyers and tourists.
The Detroit News quotes one of the jewelers: “Our buyers are almost all from China, Russia, the Gulf, Thailand, India and the European Union, and we can barely keep up with their demand.”
However, after two weeks there came another kind of information. According to some owners of jewelry outlets, because of a reduced number of tourists gems trade in Myanmar dropped to its historic minimum.
“Usually our buyers are Thailand residents. Now they do not come to Burma. This is why our turnover went down,” says a manager of Gloria, a famous Rangoon company.
Also the representatives of the Sun and Moon Trading House say they ran into lower sales turnover due to a decreased number of people coming to Burma during the year started last September. According to them, now they are re-targeting from foreign tourists to customers in Asian countries.
Rangoon tour operators say that after the so-called “saffron” revolution there was a sharp drop in the number of tourists aggravated by the Nargiz hurricane, which hit the country in May.
And to top it all, the U.S. Senate unanimously voted for the law on embargo. However, despite all the bans and misfortunes, Myanmar’s government was going to hold another gems auction on October 4-16. An official spokesman of Myanmar Gems Enterprise informed the agency that the sales would be tailored as competitive bidding and offered lots would include jades, pearls and gems.
This will be the first auction since U.S. President George Bush signed the law on embargo. Jewelers of America approved the ban and the organization was supported by Tiffany and Bulgari, the largest retailers.
Meanwhile, the American jewelry society is interested in finding new suppliers of rubies. The jewelry mass media publish recommendations by gemologists, who explain the difference between rubies from various deposits and by what kind of other gems similar in color they may be replaced.
It is evident that this situation spurred the development of ruby deposits in other countries. Thus, after a two-year lapse there was re-opened the Nyala Field in Malawi.
The government of Malawi granted a ten-year lease (plus an automatic renewal after five years) to Columbia Gem House owning the mine. The lease contains not only mining details but also social matters such as the company’s obligations to fund a health clinic for local population and have local Malawians among the mine’s owners.
The company informed about its intention to present a large-scale development plan in November, which would permit to boost the mine’s output 20-30 times.
JCK Online says that historically, the Chimwadzulu Hill area production consists of various gemstones: 35 percent is ruby, while the rest is sapphire of varied colors.
Columbia Gem House says that mining, cutting and sale of gems will be under complete control.
