Traders hope for a boost from new gem laws

The Myanmar Times - - Business - KYAW KO KO [email protected]­times.com

THE new amend­ments to the law gov­ern­ing the ex­trac­tion of gem­stones in Myan­mar are ex­pected to of­fer re­lief for the gem in­dus­try in Man­dalay.

In­dus­try in­sid­ers in­ter­viewed by Myan­mar Times said they hope the mar­ket in Man­dalay will bounce back this year af­ter the Pyi­daungsu Hlut­taw on De­cem­ber 18 amended the tax rates and re­stric­tions on the open­ing of new min­ing ar­eas.

Un­der the amend­ments, medium and small-scale min­ing busi­nesses in Hpakant, Kachin State, are per­mit­ted to op­er­ate af­ter pay­ing the ap­pro­pri­ate taxes on min­ing blocks to the gov­ern­ment. Large-scale min­ing of gems us­ing heavy ma­chin­ery will remain re­stricted.

The re­quire­ments will con­trol the sup­ply of high-qual­ity gem­stones in the local mar­ket, while draw­ing in­vest­ments and main­tain­ing jobs at the same time.

High-qual­ity gems are scarce in the local mar­ket due to ex­ces­sive min­ing, said U Myo Myint Naing, sec­re­tary of the Man­dalay Maha Aung Myay Gems Trad­ing Cen­tre.

“The rarer it is, the more pre­cious a gem be­comes. With ex­ces­sive min­ing, gems be­come plen­ti­ful and prices drop. If con­trolled, it will be good both for the gov­ern­ment and gem mer­chants. I think if there is no ex­ces­sive min­ing, the mar­ket will be­come bet­ter, es­pe­cially in Man­dalay,” he said.

The Maha Aung Myay Kyauk Wine gem mar­ket is the prin­ci­pal jade and gems mar­ket in Man­dalay and is said to sup­port the liveli­hoods of 50 per­cent of the city’s res­i­dents. It is also the big­gest gem mar­ket in Myan­mar, with up to 500,000 vis­i­tors ev­ery day and trans­ac­tions worth up to tens of mil­lions of US dol­lars tak­ing place.

“You could say that Man­dalay’s econ­omy is good if busi­ness at the Maha Aung Myay Kyauk Wine gem mar­ket is good. Ev­ery sec­tor is con­nected and I would like to see more ac­tiv­ity in the mar­ket,” said one gem trader.

How­ever, the mar­ket has slowed con­sid­er­ably since the early 2000s, gem mer­chants say.

“Back then, it was quite easy to re-sell a gem. Gems were not as plen­ti­ful as they are to­day. Now, gems are plen­ti­ful but of poor qual­ity, just junk stones. In the past, we didn’t need much cap­i­tal. We could make a profit with what lit­tle we had,” said gem trader U Aung Than.

In the cur­rent en­vi­ron­ment, ru­bies, sap­phires, am­ber, rough jade and fin­ished jade are most com­monly traded, said gem trader Ko Yan Naing.

“In fact, high-qual­ity gems are be­ing ex­ported abroad through un­of­fi­cial routes and we don’t even have a chance to see many qual­ity gems that are pro­duced in our coun­try though they can be found in in­ter­na­tional mar­kets,” said a gems trader.

Although the new reg­u­la­tions are ex­pected to help Man­dalay’s gem in­dus­try, the re­gional gov­ern­ment and local busi­nesses should also do their part to boost the sec­tor by or­gan­is­ing gem ex­hi­bi­tions as well, said U Myo Myint Naing.

The gov­ern­ment al­ready or­gan­ises of­fi­cial gem ex­pos in Nay Pyi Taw, how­ever, these events are aimed at larger busi­nesses and for­eign­ers and are less ben­e­fi­cial to smaller traders, in­dus­try in­sid­ers say.

“Although most of the ex­pos are in­tended for peo­ple in the local gems busi­ness to buy raw ma­te­ri­als, many Chi­nese traders are par­tic­i­pat­ing in them. While we need Chi­nese traders to act as buy­ers for the coun­try’s gems, they should be buy­ing from local busi­nesses in­stead of buy­ing di­rectly from the ex­pos, which hurts local traders,” they said.

Although the Union gov­ern­ment has passed the new gem­stone laws, Man­dalay’s re­gional gov­ern­ment also formed a com­mit­tee last year to look into leg­is­la­tion cov­er­ing small-scale gem min­ers and traders.

The group has al­ready con­ducted a field study and met with peo­ple in Mo­gok, the heart of ruby min­ing in Myan­mar, said U Tin Aung, head of the com­mit­tee and Chan Mya Tharsi Town­ship Re­gional MP.

«Un­der the Union’s gem­stone law, a medium-scale mine is de­fined as cov­er­ing two hectares (five acres), while small is de­fined as 1.2 hectares. How­ever, fol­low­ing those def­i­ni­tions in Mo­gok would mean there are vir­tu­ally no mines. I think the reg­u­la­tions are mainly in­tended to cover jade min­ers, so we need laws that are more ap­pro­pri­ate for small-scale min­ers and local con­di­tions,” he said.

How­ever, de­spite the need for some fine tun­ing, in­dus­try in­sid­ers are hope­ful the new law will help Man­dalay’s jade mar­ket re­cover and lead to the re-emer­gence of new, more sus­tain­able gem min­ing blocks in Hpakant and other gem-pro­duc­ing ar­eas.

Photo: Kang Wan Ch­ern

A trader sells gems at Yangon’s Bo­gyoke Aung San Mar­ket.

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