UK-based firm dispels local gem traders’ fear of invading local mining
Local gem traders have expressed concern over the entry of a British company in gem trading and exploration in Sri Lanka.
UK-based Gemfields Plc, one of the world’s largest coloured gem producers, is to launch its Sri Lankan unit in a joint venture with East West Gem Investments (EWGI), a local firm, saying it is abiding by state regulations in exploration work.Several local gem traders warned that the present traditional environmental friendly system of gem mining and trading in Ratnapura and the gem business of Sri Lankan firms would be greatly affected by the invasion of this company with exploration and gemstone experience in Zambia and Mozambique.
When this firm starts digging gem mines in Ratnapura it will deprive local ordinary gem miners of their livelihoods and occupation for generations, they said adding that they have lodged a complaint at the Sri Lanka Gem and Jewelry Authority. Gemfields has acquired a 75 per cent stake in three EWGI subsidiaries, holding 16 exploration licences covering diverse minerals, for US$400,000. The licences are for exploration only but traders fear that eventually they would also secure mining rights from the authorities
Outlining the company’s operations in Sri Lanka, Mohan Natarajan, Head of Business Development at Gemfields, told the Business Times on Friday morning hours before his departure to London after a brief visit to Sri Lanka, that the company listed in the London stock exchange will carry out clean and ethical business and they will first engage in gem trading.
He added that the company will not enter into gem mining in Ratnapura without carrying out a proper exploration procedure. It will adhere to the country’s laws, rules and regulations and there was no intention to carry out mining at present. In the past, Minister of Environment and Sustainable Energy Susil Premajayantha has emphasized that no foreign company or foreigner will be issued a licence to mine for gems. The Minister said that although foreigners could engage in the local gem trade, they cannot be involved in gem mining as a joint venture.
“Our current focus in Sri Lanka is on trading operation and understanding the geology through exploration. We have received a trading licence and are in the process of setting up operation very soon. We are also forming a team to start the research process on the Sri Lankan sapphire industry and also start the forst leg of the exploration,” Olivia Young, Marketing Executive of Gem Fields told Business Times in an e-mail communiqué this week.
The joint venture seeks to develop the broader exploration, mining and sorting infrastructure in Sri Lanka to promote a globally competitive gemstone sector, Mr Natarajan revealed.
Sri Lanka is known as a key source of sapphires of all colours including the rare pinkish orange coloured sapphire. The company plans to pursue opportunities in the Sri Lankan sapphire and gemstone sector, he said.
Gemfields and EWGI will set up a gemstone trading company, Ratnapura Lanka Gemstones, to carry out trading of rough sapphires sourced from the Sri Lankan market.
It will offer the gems to international buyers through the company’s rough gemstone auction platforms, he said, adding that local gem traders will also benefit as they can fetch high prices for their gems as well.
Ratnapura’s main square has become the biggest open-air gem market in Sri Lanka where dozens of precious stone merchants gather daily. With the intervention of Gemfields, the trading at this open-air gem market would be affected, traders warn. According to the traditional system: the owner of the land where the mine is located, the owner of the water pump, the miners, the owner of the mining permit, and the gem merchant – jointly get a share from the sale of gems. This practice will also be changed with the entry of the new company, they said.