Potential gems in Lanka’s 90% land area

Sri Lanka is to become a regional hub in the world gem industry by establishing an exclusive economic zone for gem and jewellery in Ratnapura, offering attractive incentives to investors. This is according to geological opinion that 90% of land in Sri Lanka has gem bearing potential.

The Sri Lankan government is exploring opportunities to find new markets and studying the feasibility of promoting Free Trade agreements with countries like Singapore and Thailand, allowing investors to gain on value added exports originating from Sri Lanka. The 15 percent Value Added Tax (VAT) on imports and trading of rough, cut and polished gemstones, diamonds and precious metals, has also been removed by the government.

Minister of Enterprise Development, Mano Wijeratne said that his ministry initiated a programme with Thailand and Singapore to strengthen forward linkages with the counterparts of the industry for mutual benefit. The gem and jewellery sector recorded an overall growth of 8 percent during the first quarter of this year in comparison to corresponding figures of last year .

The industry has earned a sum of Rs. 44.9 billion in 2006, with a 23 percent growth compared to the previous years’ income of Rs. 36.5 billion. The Sri Lanka Gem and Jewellery Association (SLGJA) said it was in the process of introducing an internationally recognised quality certificate to certifying the quality of gems purchased in Sri Lanka. Currently, certificates that are issued are not recognised internationally. Future industry plans include setting up a gem laboratory and gem trading floor in Ratnapura, and the National Gem and Jewellery Authority has made arrangements to upgrade skills of gem miners.

The local industry’s “Gem Talk” magazine highlighted the fact that there are nearly 30,000 to 40,000 gem pits being operated annually, providing additional income to nearly 150,000 people per mining season. Most of the labour involved in the gemming industry are from low income groups while their efforts contribute to nearly 60% of the total income from mineral exploitation in Sri Lanka.