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

By Kyaw Hsu Mon 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.