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Gem of a trade

Pakistan is home to world’s finest gemstones. Obsolete extraction methods, lack of policy, smuggling and export in raw form are stopping the country from reaping benefits

Gem of a trade

Travelling on the Gilgit-Skardu Road during summers, you come across people climbing rugged mountains, many of them after crossing the river in between with the help of makeshift chairlifts called “dolis” in local language. They carry essential everyday items including clothing, food that may last for days or weeks and basic tools including hammers and chisels. Before and beyond this season that lasts between three to four months, it is not possible for them to tread this path and spend time here due to rains and snowfall.

The rocks and boulders they are crossing or settling around are no ordinary ones. These are repositories of immense natural wealth and hold some of the world’s best reserves of precious gemstones and semi precious stones. These people will stay here for long time and use their experience and instinct to figure out the location of the deposits of the precious stones. Sometimes, their guess turns out to be a well-calculated one, sometimes not.

In the absence of modern technology, they use blasting to break the rocks into smaller pieces and hunt for their desired product. Knowledge transferred to them over generations gives them a slight idea of which precious stone they can find near which mother rock.

The gems merchants and experts say the establishment of gem exchanges is a must to check movement of raw gemstones. They believe if there are better selling opportunities for miners and traders of raw gemstones inside Pakistan, they will not even think of smuggling.

A problem with this method of extraction is that the uncontrolled blasting done with dynamite can bring more harm than benefit and the precious stone may get destroyed along with surrounding rocks. The mines where these people search for gemstones are controlled by local influentials who give them mining rights as per the terms and conditions decided between them.

So, this informal mining goes on in a scenario where the government is yet to come up with a proper mining policy and introduce modern technology to extract gemstones in high altitude mountainous regions. The situation is almost the same in other areas blessed with gemstone reserves.

While the types of gemstones available in Pakistan is common knowledge, the reserves are yet to be quantified. Their location and value has to be determined. The last geological survey of these regions was done around 25 years ago and is now long overdue. The question here is that when you do not have the idea of where the different gemstones lie and in what quantity, you cannot exploit the potential and attract investors on terms that suit you.

Pakistan is a known hub of high quality gemstones in the world. Here garnet is found in Astore district, topaz in Mardan district and Astore district, spinel in Hunza-Nagar district, ruby in Hunza-Nagar district, tourmaline in Skardu Baltistan district and emerald in Swat. Similarly, aquamarine is found in Haramosh, Gilgit and Shigar Baltistan, peridot in Kohistan, agates, onyx and jaspers in Waziristan and Balochistan, Kunzite in Chitral (KPK) and turquoise in Chaghi Hills in Balochistan. There are several other regions that are home to semi precious-stones.

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Official sources claim Pakistan has exported gemstones worth Rs2.57 billion over the last three years which the players in the sector term a tiny fraction of the actual potential that exists here. They believe there is huge scope for the country as the global gems and jewellery market is expected to gain the value of around $292 billion by the end of 2019. But this will not come easy; the government of Pakistan and other stakeholders will have to adopt a revolutionary plan to reform this sector and remove the impediments.

Matiullah Sheikh, Chairman, All Pakistan Gems Merchants and Jewellers’ Association (APGMJA), based in Karachi, questions why the gemstones extracted in Pakistan are available in the markets of Thailand in cut and polished form rather than here. Unfortunately, he says, “most of these gemstones are smuggled out or exported in raw form by exporters who declare far less than their real value in customs records.”

“A large quantity of these raw gemstones reaches the emerging markets of finished gemstones like India and Thailand where they are cut and polished before being put on sale in their local markets as well as the international market.”

Sheikh demands for a fresh geological survey of the said areas, especially those in Gilgit-Baltistan and Khyber Pakhtunkhwa, to quantify the reserves. He shares that phenomenon like earthquakes and the activity going on inside earth’s crust change formations of rocks and often brings treasures hidden far below the surface to the fore. “Therefore, relying on the old geological survey is not a prudent approach especially when many earthquakes have occurred here over the years,” he adds.

Sheikh says, “Taxes on exports and remittances from sale proceeds of finished gemstones also discourage people from exporting them through proper channel, so they prefer to take these abroad in raw form and get them value added there. I would request the government to remove these levies for some time so that the sector can flourish.”

Other issues plaguing the sector include the lack of advanced technology and equipment for mining, dearth of skilled manpower and non-existence of gemstone exchanges inside Pakistan where these can be traded. As the precious stones here are found in veins formed inside rocks at high altitudes, the required blasting has to be done in controlled environment and with extreme care so that only the surrounding rock is cracked. Otherwise, the gemstone trapped inside these veins is destroyed.

This can be handled by leasing modern equipment to the miners for high altitude mining and improving the mining techniques and blasting methods. Adoption of these methods would lead to conservation of the gem material and increase in production.

Regarding skilled workforce, the situation is that several government and non government sector institutes are providing training in gemstone cutting and polishing but there is a need to bring it to the international standards. Mahmood Alam Mehsud, who deals in emeralds of Swat and owns a lapidary in Islamabad, says he brought experts from France to train the workforce here so that the level of their skills could be enhanced to the required level. He says he has a loyal customer base in France and Italy where Pakistani emerald is high in demand. He hopes time will come when all the gemstones extracted from here are cut and finished here and then sold to the buyers. “Pakistan is blessed with world’s finest emerald which is more expensive than diamond. It’s up to us to market it to the world in the best possible manner.”

The concept of gem exchange is not new in Pakistan. Namak Mandi in Peshawar has historically been the hub for all gemstones that are mined from Pakistan, Afghanistan, Iran and the adjoining states. But unfortunately these do not exist now. “The exchanges of Quetta and Peshawar are no more there,” says Faisal Shafiq, Marketing Manager, Pakistan Gems and Jewellery Development Company (PGJDC) that works under the Ministry of Industries and Production. He says these two exchanges were set up by the company, but “these could not remain functional beyond a certain period due to the extraordinarily high retail costs involved.”

Shafiq shares the company organised a 4-day exhibition early this year that received excellent response from prospective buyers and investors. “They are offering courses in gems’ cutting and polishing. Also, the interest shown by people in taking these courses is a good sign.”

The gems merchants and experts are however convinced the establishment of gem exchanges is a must to check movement of raw gemstones to countries like China, Afghanistan and Thailand through informal channels. They believe if there are better selling opportunities for the miners and traders of raw gemstones inside Pakistan, they will not even think of smuggling or exporting these out in this form. Therefore, they demand creation of gem exchanges in cities like Skardu, Gilgit and Peshawar on the pattern of Chantaburi in Thailand. They believe it is the best time to do this because the unauthorised movement of goods and individuals across Pakistan-Afghanistan border has become difficult recently due to the increased control and checks introduced there.

Proper quantification of gems deposits and required reforms in this sector are also necessary as Chinese companies are coming to Pakistan and it is quite likely that they will invest in this sector as well. Without making progress on these counts, Pakistan will not be in a position to extract maximum benefits out of partnerships and may end up leasing outs treasure troves for peanuts.

Shahzada Irfan Ahmed

shahzada irfan
The author is a staff reporter and can be reached at [email protected]

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