MAC: Mines and Communities

South Asia Update

Published by MAC on 2006-10-20

South Asia Update

20th October 2006


Critics attack Myanmar's 'blood gem' auctions

Charlotte McDonald-Gibson, Agence France Presse

18th October 2006

It is a long journey from the rocky mines of Myanmar to the toned necks and slender wrists of US celebrities gliding along red carpets.

But with up to 90 percent of the world's rubies and many other precious gems mined in Myanmar, chances are that a vast proportion of the stones glinting in the windows of high-end jewelers worldwide originate in the military-ruled nation.

Hundreds of gems and pieces of jade from Myanmar, formally known as Burma, are due to be sold at auction starting Thursday, and the junta's frequent sales have become an increasingly important source of foreign currency.

But human rights groups and some dealers are urging a boycott, and compare the gems with Africa's so-called blood diamonds which are mined in war zones to finance further violence.

"Buying these gems from Burma, I would say that people are unwittingly supporting the Burmese regime with hard currency ... and pushing Burmese youth to die under great hardship," says Aung Din, policy director for the US Campaign for Burma.

However, some gem dealers and experts dismiss attempts to boycott Myanmar's precious stones as futile and unnecessary, saying it will only push the market into the hands of criminals.

"The stones will go to the black market, it is no different, because of the demand in the market," says Pornchai Chuenchomlada, president of the Thai Gem and Jewelry Traders Association (TGJTA).

Myanmar has been under military rule since 1962. The continued house arrest of democracy leader Aung San Suu Kyi and alleged human rights abuses by the junta prompted the United States and Europe to slap economic sanctions on Myanmar, one of the poorest nations in the world.

But immediately after the United States passed an import ban in 2003, gem dealers began lobbying to circumvent the sanctions, leading to a clause stating that if a gemstone is cut and polished in a third country, it is no longer considered of Myanmar origin.

"That stone is now a legal import into the United States," says Richard Hughes, a US-based gemologist.

Hughes says that all gemstones mined across Myanmar, either by groups controlled by the junta or by private enterprises, are meant to be officially valued by a government committee.

The high quality stones go to auction, where thousands of dealers from the world over gather to bid on lots that include jade, rubies and blue sapphires.

Most bidders are from China and Thailand, says Hughes, who attended an auction in 2004, but they also come from Europe and the United States.

Myanmar's state-run media has said that an auction in July raised 124.2 million dollars. The sale due to take place from October 19-29 could reportedly raise more than 100 million dollars.

While about 95 percent of the jade stays in Asia, the gems are mostly purchased by Thais to be cut and polished be-fore being sold on to dealers and shops abroad.

TGJTA's Pornchai says that for years the black market dominated the trade, but rising oil prices have made mining costlier for smaller illegal operations, and the government has been able to take control of the mines.

"I don't have figures but I believe it is one of the major benefits for the country," he says.

But the idea of buying stones from a military-ruled nation worries some jewelers.

"The fact that virtually every Burmese-origin gemstone offers benefit to one of the most oppressive regimes on the planet made our decision to boycott Burmese gemstones very clear," Brian Leber, a US-based jeweler, tells AFP from his home in Illinois.

One of the highest-profile companies boycotting Myanmar's gems is Tiffany and Co, which stopped selling them in 2003. But Leber says there are still plenty of jewelers who are either ignorant of the situation or turn a blind eye.

"An alarming number are fully aware of the situation in Burma yet are seemingly content to ignore the issue," he says.

Hughes, by contrast, believes the international community should engage with Myanmar's junta rather than pushing it further into isolation.

"These people are paranoid under the best of circumstances and if you start threatening them that only increases their paranoia," he says.

And besides, he says, the gemstones will simply go through neighboring countries and reach the west as Thai gemstones.

"It is not the product that is the problem, it is the politics," he says.

As dealers debate the pros and cons of the trade, human rights groups call for a complete ban on the import of gems from Myanmar's mines.

"A gift of a ruby is meant to symbolize love, but if it comes from Burma the true price is paid in blood and oppression," says Mark Farmaner of Burma Campaign UK.


Vedanta varsity faces technical problems

Pioneer News Service, Bhubaneswar

20th October 2006

Though the State Government had agreed to provide 8,000 acres of land free of cost to the Vedanta Foundation to set up its world-class university near the Puri-Konark marine drive within three months, the Government has failed to allocate land because of technical reasons.

The MoU between the Foundation and the State Government for the Rs 15,00-crore university project was signed on July 19. The Foundation has sought a total of 10,000 acres of land for making provisions for at least 1 lakh students. The deadline was completed on Wednesday

Sources said the Government could not provide land as the MoU had been signed with a private company. "Had there been an MoU with a society, foundation or trust, the Government could have given the land. But in this case, the MoU is between the Government and the Vedanta Foundation, which is a private company," said a senior officer. He said that though Vedanta Foundation was a foundation, it was a private company registered under the Companies Act-1956.

The sources said that according to law, the Government cannot directly give land to any company. It only can give land for public purpose to a trust or a society. Any company has to apply for land to the State-owned Industrial Infrastructure Corporation (IDCO) for the industrial purpose. the IDCO cannot give land to any private body for setting up educational institutions as an educational institution is not an industry.

Another trouble for Vedanta Foundation is that without the University Grants Commission's (UGC) approval it has used Vedanta University. The UGC puts clear restriction on the use of word university by any one, including a private company. If anybody uses it, he has to give fine as it is an offence as per UGC Act. An institution can be only recognised as a university, once it receives clearance as per the UGC guidelines.

Under these circumstances, the State Government is trying how to sort out the problems facing the proposed Vedanta University.

Villagers protest against proposed Mittal project

Pioneer News Service | Sambalpur

20th October 2006

Thousands of villagers protested against the proposed Mittal Steel plant in Chiplima area in a public meeting organised at Bhalumundia village under Basantpur gram panchayat on Tuesday.

Villagers of Kalamati, Basantpur and Kardola participated in the protest ater, the villagers submitted a memorandum to local MLA and Commerce and Transport Minister Jayanarayan Mishra, who was present at the meeting.

Sources said the company had selected three places including Chiplima in the State to set up a steel plant in 10,000 acres of land. Mittal Steel was keen on setting up the plant in the area as about 6,000 acres of land had been acquired by the State Government for Hirakud Stage-2 Project.

POSCO protestors manhandled by police in front of Navin Nivas

Report from SS Dash, Bhubaneshwar

15th October 2006

About 300 people, mostly women and children from Jagatsinghpur arched early morning to day to submit a memorandum to the Chief Minister (CM) demanding to put a stop to the POSCO project. Medha Patekar and B.D.Sharma were also participating in the rally. When the people reached the CM's residence the Police gheraoed them and a scuffle to drag them away ensued leaving four people critically injured including a senior citizen who has been on indefinite starvation for more than 20 days.

The police showed no consideration to the fact that people were on indefinite starvation and had barely managed to walk from PMG square to the CMs house at Palaspali. Women and children were dragged across the concrete roads and pushed into the vans. The police also asked the media to turn its face away so that they could get over with the people in a much more faster and needless to say inhuman way. The police was also shouting profanities and every given opportuity digging their elbows as hard as they could into the ribs of the protestors. It was the presence of Medha and B D Sharma that made the police restrain its hand else mayhem was on the verge of breaking out. Medha's repeated appeal not to use violent methods to the Police went to vain as men, women and children were beaten, intimidated and herded into vans. There was no presence of any ladies police in the first 30 minutes when all the scuffle happened.

Women were pushed and pulled around by male policemen who were brutally aggressive. The scenario was a mockery of democracy with women and children crying out in terror. It must be mentioned here that the Police was even trying to convince the protestors that they shouldnt agitate against POSCO. There is no reason the Police should be judgemental about the issue. The police should not have treated peaceful protestors as criminals. The police should restrain itself before applying force on women and children.

A peaceful protest march and submission of a memorandum turned into a situation reminiscent of India freedom struggle thanks to the high handedness of the Police. Umakant (25) and Narahari (70) regained consciousness after 3-4 hours. Umakant was kicked repeatedly in the chest when he fell down during the scuffle. Eye witnesses will agree that the Police seemed to be on a personal motive in controlling the people. It seemed as if their eyes were thirsty for blood and everytime the cameras of media persons present moved away they would commit an act of violence. It was a shameful act and the icing was by the CM himself who as usual remained indifferent to the demands of the impoverished of Orissa.

On a personal note the Police tried to intimidate me and forbade me to take any pictures. The Police man or rather Police officer without a nameplate and any identification even remarked that I was 'exploiting the poor people' (??) and that he could read my 'nature from my face' (!!). Also he made up a story of how he has inside information that I was with the protestors right from Paradip. He tried to snatch my tapes and break my camera without much luck as I resisted it and shouted back. Fortunately he saw sense and didnt go all the way. Some other media persons later told me he is a DSP of the Crime branch though I have not verified this piece of information.

Corus Seals Deal With Tata

Chris Noon, Forbes magazine

20th October 2006

India's Tata Steel won the hand of Anglo-Dutch steelmaker Corus Group on Friday, but it can't hang loose just yet; talk of a counterbid from Russian company Severstal is rife.

Shares in Corus (nyse: CGA - news - people ), which have risen more than 50% this year amid persistent bid talk, were down 7.49 pence (1.57%) to 471.01 pence ($8.87) at 12.15 p.m. in London. That is still well above Tata's offer price of 455 pence-per-share.

Tata has agreed to a 1% break fee if the deal collapses due to a rival bid.

Morgan Stanley's Charles Spencer upgraded Corus' shares to "overweight" and raised the bull-case price target to 490 pence from 470 pence. "With our price target now implying 33% upside potential, we believe the risk-reward ratio is in investors' favor," wrote the analyst in a research note.

Tata's £4.3 billion ($8.1 billion) takeover bid -- which reflects the mania for consolidation in the steel industry after Mittal Steel (nyse: MT - news - people )'s $31 billion acquisition of rival Arcelor this summer -- will create the world's fifth-largest steel company.

Tata, the world's 56th biggest steel producer and part of the sprawling Mumbai-based Tata conglomerate, said job cuts could not be ruled out in the long-term. Chairman Ratan Tata said the takeover would be a "defining moment" for the firm.

Many spectators though it was merely a matter of time before Corus, created through the merger of Dutch firm Hoogovens and British Steel in 1999, was swallowed up.

In March, Corus rid itself of most of its aluminum assets in a deal that paved the way for the company to take part in steel consolidation.

"If Tata did not take this step today, it would have been invaded by the Mittals and Poscos of the world," said Jigar Shah, the research head of Mumbai's K.R. Choksey Securities, to journalists on Friday. "This was a proactive move to acquire a company in the global space and helps Tata remain unchallenged in the Indian territory."

Corus Chairman Jim Leng said the deal helped to give Corus access to low-cost output and high growth market.

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