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 LONG WAIT ON FOR GLOBAL VALUE ADD PLAYERS TO ENTER GEM MARKET


 
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GEM traders and miners from Myanmar are looking forward to the day when a major international value-added gem market develops in the country.

A prominent jade and ruby miner, U Maung Sein of Noble Land Company Ltd, said Myanmar is the biggest producer of jade and rubies in the world, but the biggest markets for those precious stones have been established in other countries.

"The biggest gem market is not in Myanmar but rather in neighbouring countries, including Thailand, China and India," he said.

According to government figures, Myanmar produces tens of thousands of tonnes and carats of precious stones every year.

"But Myanmar miners and traders enjoy only 10 or less than 10 per cent of the real value of the stones before they go into the world market," said U Maung Sein, who has been in
the gem business for 15 years.

"Two years ago I found a ruby in a shop in Bangkok that cost about US$15,000. The same ruby would sell for less than $1000 in Myanmar," he said.

He suggested that Myanmar should form an association made up of representatives from the gem industry that can control the standardisation, quality and production of gems, and that can regulate the gem market in the country.

"In Myanmar, we have many associations that regulate other sectors such as rice, pulses and beans, and timber but we don't have an association dealing with gems and jewellery," said U Maung Sein.

"The gem industry could contribute as much to the country's economy as other sectors if we had an influence on the intenational market," he said. "Our rubies and jade already have a good reputation."

"It is good that the government organises gem emporiums twice a year, but we should have a major international gem market that operates throughout the year," he added.

U Maung Sein said that during the past several years the production of someprecious stones, especially rubies) has dropped.

The country's ruby production decreased from about 7.24million carats in fiscal 1996- 1997 to about 1.42 million carats in 2002-2003, according to the figures published by the Ministry of National Planning and Economic Development.

Rubies are also found in Afghanistan, Vietnam and Tanzania, but Myanmar's are widely considered to be the most beautiful and valuable, as is Myanmar's jade, sapphire, peridot, spinel and numerous other rare gemstones.

There are three ruby mining areas in Myanmar: Mogok in Mandalay Division, Moog Hsu in southern Shan State and a newly discovered ruby field at Nam Yar in Kachin State.

During the past decade, Myanmar's gem industry has improved on traditional production methods, leading to mass processing at 1:i1ine sites. This has involved establishing large, open-cut pits worked by modern heavy machinery that can remove dirt from the site and literally flatten large hills in a matter of months.

Liberalisation of mining in the Mogok; field was initiated by the government's Myanma Gems Enterprise in 1991.

In 1995 the enterprise handed over its gem mining operation to the Union of Myanmar Economic Holdings Ltd with operations in Mogok, Mong Hsu, Nam Yar and Pharkant.

Though mechanisation has helped miners recover gemstones more quickly, the precious stones are now becoming more difficult to find.

Union of Myanmar Economic Holdings produced eight million carats of rubies in fiscal year 1997-1998 but the figure decreased to three million carats in 2001-2002. A source close to the company said the figure has gone down even further since then.

"Given the situation, Myanmar should put emphasis on value-added production," said U Maung Sein. "The idea is that we must focus on getting good prices for the gemstones we have rather than concentrating on quantity."

"And we have to concentrate on marketing, including the use of electronic methods," said U Maung Sein, who runs the only gem and jewellery website in Myanmar, www.myanmargems-jewellery.com.mm.

He said his website is becoming increasingly popular and has been getting a growing number of hits from around the world. Other traders must take advantage of this trend by educating themselves in the use of email and the internet.

"Most traders are sitting around waiting for international buyers to just show up, and never consider using modem marketing strategies," said U Maung Sein.

Another top gem trader said the ruby supply has gone down by about SO per cent during the last two years.

" And I think our value-added gem sales are less than one percent of Thailand's cut gem sales," he added.

 

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Prepared by DPS. Last Modified: 23 May, 2008 (slm)

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