Mandalay trader petitions for mining halt

A Mandalay trader is circulating a petition calling for an immediate but temporary halt to jade mining and a revamp of export procedures, warning the Mandalay market could be headed for disaster if business continues as usual.

The petition will shortly be submitted to a Regional and Union-level officials, with its main backer hoping it can sway the government, even if only a minority of jade traders signs on.

“If they keep mining and exporting the jade as they are now, then within one year, two years, the local market will be finished,” said U Aung Win Oo, a prominent Mandalay jade dealer.

He is the driving force behind the petition, which he said he began after a meeting with government officials shortly after the National League for Democracy took power on April 1.

U Aung Win Oo said that at the meeting the government officials sought businesspeoples’ opinions on the future of the jade market, which is an important part of Mandalay’s economy but has suffered enormously from falling prices in the last few years.

He claimed he was the only one of 16 jade dealers in attendance who wanted the temporary stop and reorganisation of the industry in an effort to improve its profitability for Mandalay.

U Aung Win Oo subsequently launched the petition, which calls for an immediate, temporary halt to jade mining at Hpakant. The effect will be to push up prices as supply becomes restricted, though U Aung Win Oo claimed the primary goal of the halt is to allow the new government to reorganise how the jade export market is conducted.

The previous government had passed an amendment to the Gemstone Law on January 29 2016 which he claimed made it easier for direct exports of jade. U Aung Win Oo said this will end up hurting the Mandalay and Sagaing markets, as traders can now cut out the middleman and take their products straight from the mines to China.

“We have to amend this law again,” he said in an interview at his home in Mandalay.

A mining suspension would also allow the new National League for Democracy administration time to improve the government’s tax and revenue efforts from the miners, he added.

Traditionally, jade is mined at Hpakant in Kachin State, and then brought to Mandalay or Nay Pyi Taw where it is sold to foreign buyers. The Mandalay market operates every day, while the Nay Pyi Taw jade emporium is run by the government and only takes place once a year for a few days. A large quantity of jade is also smuggled directly to China, the major buyer of Myanmar’s jade.

Prices in Mandalay and Nay Pyi Taw have dropped precipitously over the last two years, and traders have pointed to a range of causes.

U Aung Win Oo said the 2012-13 conflict in Kachin State between the Tatmadaw and the Kachin Independence Army somewhat restricted supply, keeping prices high. With a recently improved security situation in Kachin, more people have been able to enter the business.

The National League for Democracy victory in the November 2015 election also caused a flurry of activity at Hpakant, as miners pushed to extract as much as possible ahead of a potential change in policy brought by the new government, he said.

Other traders have blamed China’s crackdown on corruption and its slowing economy for keeping that country’s buyers at home.

Whatever the reason, it is clear the Mandalay jade business is hurting. However, U Aung Win Oo admits it has been difficult to convince jade traders to support his proposed remedies.

His petition had only a few dozen names of traders when seen by The Myanmar Times, though at the Mandalay market the next block over from his house, there are thousands of buyers and sellers at the market every day.

Prices may be low, but the prospect of striking it rich with the precious stones keeps traders coming.

Traders there said that while they are aware of the petition – U Aung Win Oo ensured a booth was manned at the market from July 14 to 28 – they are reluctant to put their names to it.

“I’m not interested in the petition,” said one trader at the market, who declined to be named. “Prices are less than half of what they were a few years ago, but I still need to sell for my business.”

U Aung Win Oo said he is not sure if his petition will have any effect. However, he reckons the new government may be receptive to his views, and he plans to submit the appeal even if it has fewer names than he would like.

The petition comes at a crucial time for the jade industry. Mining practices in Hpakant have been the target of repeated criticism due to environmental and human rights concerns, complaints about the murky business practices and profiteering in the industry, and allegations that the resource fuels conflict and corruption in the region.

However, Myanmar faces a large and growing trade deficit, and jade is a major export industry. Assessments of its value have varied widely, with a study by the Ash Center at Harvard University estimating jade sales as worth US$7.9 billion in 2011, while Global Witness put 2014 production at about $30 billion.

Regardless of the trade’s actual value, it is clear the economic impacts are far-reaching. For instance, it is a popular refrain among Mandalay’s real estate brokers that the jade market’s ups and downs affect the city’s housing prices.

The National League for Democracy government has already signalled the potential for change in the troubled industry, though much of its approach remains to be seen.

Government officials said in July that mining permits will not be renewed for jade and gems when they expire. New permits will be issued once by-laws to the Myanmar Gemstones Law have been passed, an official from the Ministry of Natural Resources and Environmental Conservation said.

For now, U Aung Win Oo claims he will continue with his somewhat unlikely petition.

“Next week, I will send the petition to eight different government departments,” he said. “I don’t know how they will respond.”

 

Source: The Myanmar Times

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