Burma's gem industry: profit that fills the generals' pockets

by Mungpi & Solomon

New Delhi (Mizzima) – To promote production of gems and jewellery, Burma's Ministry of Mines said it is allocating six blocks in three states to local entrepreneurs to mine gems, an official at the ministry said.

An official at the Ministry of Mines in Naypyitaw said, the six blocks, located in Shan state's Mongshu and Namhyar, Kachin state's Moenyin and Sagaing division's Mawhan, Mawlu and Hkamti will be leased out to private entrepreneurs for a three-year term.

"These areas are regular mining zones and we are giving out new blocks in these areas. Those who are interested can apply now," the official told Mizzima.

While Burma's military government by occasionally granting gem mining blocks claims that it is promoting domestic entrepreneurs, local residents in the mining areas said mining and the gem trade has largely deteriorated since the current batch of generals grabbed power in 1988.

A local businessman in Mogoke in Mandalay division, a mining town which produces one of the world's finest rubies, said, mining business has largely been monopolized by a few businessmen who maintain a close relationship with the junta.

"Even those (the announced) blocks will be dominated by some of the cronies of the junta, others will only get it if the sites are not producing much gems," he said.

He said, since the early 1990s, the junta has taken control over all gem mines and only permits companies to carry out mining in collaboration with government enterprises, popularly known as Oo Paing.

Since then, companies such as Shwe Pyi Aye, Lynn Yaung Chi and Kadekada, who have close relations with the ruling generals, have dominated gem mining and production in Mogoke.

While Burma's Ministry of Mines designates Mogoke, Mongshu, Lonkin, Phakant, Khamhti, Moenyin and Namyar as gem mines, Phakant of Kachin State and Mogoke of Mandalay division and Monghshu of Shan state are the most famous areas, where mining of gem is carried out on a large scale.

According to a veteran gem trader residing in Mogoke, with the mining industries solely dominated by junta's allied companies, most high quality gems are directly transported to Rangoon and Mandalay to be sold to foreign buyers.

He also insists that a part of the high-quality gems produced is also smuggled directly to China, Thailand and Hong Kong.

"The mining scene in Mogoke today has drastically changed. Earlier we could look for gems in 'Hta Pwe' but now the machines do the work and most products, specially the high quality gems, would not even be noticed by local traders," the trader said, referring to a local gem-bazaar in Mogoke town, known as 'Hta Pwe', where traders and local miners come to meet and bid.

Despite the big companies coming in to take control over mining, Mogoke, a town with abundant gems beneath, still holds the 'Hta Pwe' where small time businessmen and private, now illegal, miners still hold business meets.

Similarly, in Phakant in Kachin State, a town popularly known for its quality and abundance of jade products, with the advance of Oo Paings, most jades have disappeared from local businessmen only to be sold off to China, Hong Kong and other countries, through the borders.

But the business community in Phakant said a few of the products still reaches Rangoon to be exhibited in government sponsored gems and jewellery exhibitions.

The Burmese government has been conducting annual exhibitions in Rangoon since 1964, and later in 1992 extended it to twice a year by having a mid-year exhibition. Through these exhibitions, the junta earns millions of dollars. In October 2008, the junta said, it earned more than US $ 172 million from the sale of gems in such an exhibition.

But a long time jade businessman in Mandalay calculates that the junta's generals are earning much more from sale of gems mainly jade to China through the borders, which are then re-sold to buyers in Hong Kong and other parts of the world.

Burma, from its various gem mines across the country produces some of the best quality rubies and jades in the world, and also produces emerald, topaz, pearl, sapphire, coral and a variety of garnet tinged with yellow.

"If all of these precious stones and gems are made use for the development of the country, people won't be starving," the veteran businessman, who now resides in Mandalay, said.