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Sunday, 16 March 2014

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Ambagaha Yata gem market has regional potential

The Ambagaha Yata gem market in Ratnapura where multi-million rupee business transactions take place every day is a unique market which has a long history and the potential to be an international or regional gem market if farsighted development takes place.


A lapidarist at work

Though there are no mango trees here today to signify its name Ambagaha Yata, this is where gem miners and primary buyers meet.

Thousands of gem miners, dealers and buyers from mining areas all around the country meet here. Though they are ready to do business worth millions of rupees most of them are simple, ordinary people. From early morning with torches in their hands they wait with vigilant eyes to catch a client.

According to the traders it has become a secondary and export market where even foreign buyers come. It is a unique place because there is no other market in Sri Lanka where the norm of the business is cheating.

Most poor gem miners who do not have much knowledge about the real value of precious stones are cheated.

Fake gems called gulabi made of glass is the new threat and in the recent past some traders have lost millions of rupees, they said. These artificial gems are similar in colour, appearance and chemical properties, but have no value in the market.

However, a gemmologist of the Gem and Jewellery Authority said that some properties in natural gem stones cannot be created artificially and they can recognise fake gem stones.

"Today most primary dealers who visit gem mining areas all around the country bring gemstones here and, therefore, this is mainly a secondary market," said gem buyer Linton Dayananda.

"However, miners around Ratnapura also directly bring their gem stones here," he said.

He has been engaged in this business since 1982 and has a great deal of experience. He said that without proper knowledge about stones and understanding the tricks of the trade it is extremely difficult to do business.

Whatever the real value of the stone it initially fetches the lowest price and the seller should be patient to get a reasonable price.

It is similar to the motor spare parts market in Panchikawatta, Colombo and there are thousands of brokers roaming around.

When a significant precious stone comes to the market the news passes around quickly through the brokers and they all bid the lowest price to convince the owner that it is the real value of the stone.

The Gem and Jewellery Authority provides a valuation service and there are qualified gemmologists to test whether the stone is natural or not and give details of cracks and damage.


Checking for flaws

But they do not value gems. They issue three certificates and charge a fee for testing. Yet this service is not popular among gem miners.

There are three qualified gemmologists in the Authority's Ratnapura branch and in 2013 they earned Rs.1.1 million by gem testing and this year they expanded the service and target an income two to three times last year's income.

They said that after correctly identifying a gem stone the owner can sell it at a competitive price. Normally in this Ratnapura market a gem stone worth Rs 10 million will fetch only around Rs. 50,000 at the beginning.

They explained a recent incident where a stone worth around Rs 200 million from the Elahera area was purchased at Rs. 20 million. They advise miners and traders who have little knowledge and experience in this business to get expert views before selling their gemstones.

A primary dealer from Bibile, Ratnasiri Alawatta said that this business is like gambling.

"There are occasions when you win and occasions where you lose. I started this business soon after leaving school in 1983 and have been in this business for over 30 years.

I have experience and a good knowledge about gem stones but yet there are instances when I lose in this game," he said.

"I have gem stones worth over Rs 200,000 that cannot be sold above the purchased price. The main reason is cracks in the gems that we failed to recognise," Alawatta said.

According to Alawatta the gem mining industry is also a complex process where many parties are involved. The mine workers are looked after by the sponsor of the mine who is either a gem merchant or dealer.


Ambagaha Yata gem market at Ratnapura

Getting a precious gemstone depends on chance and if there is nothing, the sponsor has to bear the whole cost. But if a precious stone is found the sponsor can bid a price but there is the option to seek a better price in the market.

After the gem is sold the land owner gets 20 percent, water pump owner - 20 percent and the mine licensee 10 percent. The balance 50 percent is divided equally between the sponsor and the mine workers.

Therefore, the sponsor has a 25 percent share and in most cases the water pump and licensee share too goes to the sponsor as he owns them.

Traders complain about the lack of support from the authorities and poor facilities in the Ratnapura gem market.

"We have around 3,500 traders here and the industry has created a large number of job opportunities and earns foreign exchange.

But we don't have a proper marketplace, toilet or other facilities," said the traders.

"The business has taken place in the streets as far as we can remember. Ratnapura should be developed as the main gem market in the country and the Asian region and though there are plans it has not been implemented," they said.

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