MAC: Mines and Communities

Burmese jade - a clear "conflict mineral"

Published by MAC on 2014-07-05
Source: The Irrawaddy (2014-07-03)

Some organisations (including Christian Aid) have been calling for the definition of "conflict mineral" to be extended to all mining production which contributes to armed conflict.

Given the failure to monitor the sources and supply chains, of only four metals - tin, tungsten, tantalum and gold, deriving from the DR Congo (see: Is the US "conflict minerals" act working?) - this may be a good idea on paper, but exceptionally difficult to enforce in practice.

However there's at least one mined  product which is instantly identifiable as deriving from a war-zone, and whose sale uneqivocally feeds conflict  in a single country.

That's Burmese jade.

This remains banned from import into the United States,  although the US government has recently lifted a number of other sanctions.

So far, it seems to be  Chinese, Thai and Japanese traders who purchase jade in its raw form.

Although the most recent Burmese "jade fair" attracted fewer such buyers  than the previous year, jade jewelry is still being freely exported to many countries, including those within the European Union.

Less Raw Jade for Sale at Burma Gems Emporium Amid Push for Value-Added Products

By Kyaw Hsu Mon

The Irrawaddy

26 June 2014

RANGOON - Burma's government expects to earn 2 billion euros ($US 2.7 billion) in jade sales at a major gems emporium that began in Naypyidaw this week, although a smaller supply of the precious stone is available compared with previous years, an official from the Ministry of Mines says.

At the 2014 Gems Emporium, a 10-day event that kicked off on Tuesday, buyers can peruse 7,160 jade lots, owned by the government and private miners, compared with 10,000 jade lots last year and 15,000 in 2012. They can also choose from about 400 lots of other gemstones and 200 pearl lots. More than 4,000 traders from mainland China, Hong Kong, Thailand and Japan are attending the emporium, according to the ministry, and sales begin on Saturday.

"The jade lot sales rate last year were at 2 billion euros, so we expect to reach the same amount this year, though we have fewer lots this time," Min Thu, assistant director of the ministry's Myanmar Gems Enterprise, told The Irrawaddy.

He said the government wanted to reduce sales of raw jadestones to promote value-added products, which would be more profitable.

"The government told traders to reduce raw jade sales and to improve technology for value-added gems and jade. Now the Gems Entrepreneurs Association is working with Chinese technicians to raise the value of jade and gems, to have a better price in the future," he added.

Win Maung, a gems merchant from Mandalay, said in the past raw jade was sold to Chinese traders who processed the stones in China.

"Chinese is better at adding value to the jade materials," he said, noting that Burma lacked the sophisticated technology required to process gemstones.

The Burmese government last year said it planned to establish a jade and gemstone center in Naypyidaw, where it hoped traders and investors would open stores and processing industries.

At this year's emporium, the highest valued raw jade lots belong to a Mandalay-based company, Tharyar Kyinue Phwe. The US$60 million lots weigh up to 233 kilograms.

Burma produces the vast majority of the world's jade. Most is sourced from Hpakant, 350 kilometers north of Mandalay, in the conflict-torn mountains of Kachin State.

Trade in the precious stones is highly controversial. Competing claims over the jade mines have helped fuel a war between the government's army and the Kachin Independence Army (KIA). Historically, gem sales have been a major source of revenue for Burma's ruling elite as well as the Kachin rebels.

The government and the KIA controlled the jade mining industry in Hpakant between a ceasefire deal in 1994 and 2011. After fighting resume in 2011, the government suspended large-scale mining operations in the area. Small-scale miners and hand-pickers moved in illegally to try their luck.

At the emporium, many merchants who are no longer exploring jade in northern Burma are showing off old jade lots that have remained in their possession.

"I still can't say when the government will allow them back to explore jade in Burma. I heard a better gems policy needs to be approved-explorers and merchants are waiting for this law to be approved," Min Thu said.

In February this year, during a meeting with President Thein Sein, Burmese tycoon Tay Za called for a better gems policy. Tay Za, who chairs the Myanmar Gems and Jewelry Entrepreneurs Association, urged the government to investigate the mining situation in Kachin State, where he has extensive business interests.

He told the president that Burmese citizens of Chinese ancestry were heavily involved in the mining industry and were exporting gems over the border to China. As a result, he said, value-added industries had developed in China but not in Burma.

The former military government started selling gems and jades at three emporiums per year in the early 1990s. The Ministry of Mines says more than 526 million euros worth of jade and gems were sold at 49th Gems Expo in 2012, compared with more than 2 billion euros in 2013.

Gem sales have slowed, however, after the Chinese government doubled import taxes on Burmese jade. The raw stones are often smuggled over the border to China through unregulated trade, without ever being taxed.


Jade Mines to Resume Operations in Kachin State: Burmese Govt

By Kyaw Hsu Mon

The Irrawaddy

8 July 2014

RANGOON - In northern Burma, where the vast majority of the world's jade is produced, mining companies will soon be allowed to resume operations, following a two-year hiatus due to armed conflicts.

The Ministry of Mines announced Tuesday that small- and large-scale miners can return September 1 to the resource-rich Kachin State.

Mining operations were suspended in the state in 2012 due to fighting between the government's military and an ethnic armed group, the Kachin Independence Army (KIA). After the suspension, small-scale miners and hand-pickers moved in illegally to try th eir luck.

The Ministry of Mines said progress had been made recently in peace talks between the government and the KIA, although a bilateral ceasefire remains elusive.

The decision to resume mining operations follows an annual gems emporium in the capital Naypyidaw, which saw fewer lots of jade than previous years. Even so, jade sales surpassed expectations, reaching about US$3.4 billion, compared with $2.6 billion last year.

Trade in the precious stones is controversial because competing claims over mines helped fuel the war between the military and the KIA.

A senior official from the Myanmar Gems Enterprise, under the Ministry of Mines, said that before 2012, about 700 jade mining companies worked in Kachin State's Hpakant and Lone Khin areas, where most of the jade is sourced.

"Companies whose licenses are still active to explore jade mines can continue their work. Otherwise they need to renew their licenses," the official told The Irrawaddy.

"Due to the government's temporary stop on jade mining, the number of jade lots at the annual emporiums in 2013 and 2014 were smaller. I hope that if they are allowed back, there will be not one but t wo emporiums next year," he said, adding that the government hoped to sell less raw jade and more value-added jade products in the future.

Khin Lay Myint, vice chairman of the Myanmar Gems and Jewelry Entrepreneurs Association (Mandalay) said she expected the supply of jade to return to normal soon. "We welcome the government's decision to allow jade miners to resume their work," she said.

Daw Khar, a resident and jade dealer in Hpakant, said the return of mining companies could end the illegal exploration by hand-pickers.

"Some residents explored in company-owned mines whe n the companies stopped working. This was not legal, and they will need to stop doing that," she said.

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