Gem industry growth hit by worker shortage
Sector workforce currently at 600,000:
A $1bn revenue target is spearheading Sri Lanka's efforts to solidify
its place as a key source market for gemstones and jewellery, although
flat global sales of luxury goods, coupled with labour shortages, risk
hindering the efforts.
Sri Lanka is home to 70 of the world's 200 varieties of coloured
stones, including its best-known export, the Ceylon Sapphire. Estimates
suggest that 80-90% of the country's rock formations could hold gem
The tax on gem exports drives people to undervalue their
However, with growing regional competition in gem and jewellery
trading, Sri Lanka will have to dig deep to win back its status as an
Market conditions. Operators hope that positive trends in Sri Lanka's
tourism sector provide a welcome boost in the jewellery trade. Tourism
growth reached double digits in the first nine months of last year,
according to figures released by the Tourism Development Authority, with
arrivals passing the 1.3m mark in September.
Yet, traders face a difficult operating environment industry wide,
weighed down by the broader economic slump and weaker currencies in
several key purchasing markets.
In China, for example - Sri Lanka's fastest-growing source market for
tourist arrivals - the 2% devaluation of the yuan in August was the
largest one-day move for the currency in a decade. Luxury goods
retailers fear the weaker purchasing power of Chinese consumers could
impact the lucrative tourism segment, as Chinese tourists spent a record
$500 bn worldwide last year, according to research service China
"Gems are the first to be affected by a crisis and the last to
recover, though there is always a niche market," Ahsan Refai, Managing
Director of retailer Zam Gems said.
Despite the concerns, a strong turnout at Facets Sri Lanka 2015, an
annual international gem and jewellery show that which brought over 100
buyer delegations to Colombo in early September, sent out welcome
positive signals for industry growth this year, after a more than 14%
drop in exports in 2014.
Sri Lanka's gem industry also faces considerable domestic challenges,
which include a smuggling problem, staff shortages and exploration
While gem, diamond and jewellery exports stood at $381.2 million last
year, according to the Central Bank of Sri Lanka, operators estimate
that the figure could be significantly higher, augmented by unofficial
business, smuggling and undervaluing.
"There is a need for a freer movement of goods," said Chanaka
Ellawala, former chairman of the Sri Lanka Gem and Jewellery Association
and director at Ellawala Exporters.
"The tax on gem exports drives people to undervalue their goods.
Building industry volumes and carving a niche as a trading hub also
presented challenges, He added, "It is also very difficult to bring
rough gems into the country, which could otherwise help build industry
volumes and make the country more of a trading hub," he said.
Fine-tuning for the future
The past decades have been marked by turbulence for Sri Lanka's
stone-cutting and polishing operations, with much of the country's
manufacturing going to regional competitors.
While Sri Lanka has fought hard during the last 15 years to
re-establish its gem manufacturing industry, operational challenges
remain, led by a shortage of qualified workers.
Industry players believe recruitment shortfalls are due in part to a
broader shift away from labour-intensive lines of work, although traders
are confident that these hurdles could be overcome with the necessary
resources and training.
Sri Lanka's Export Development Board estimates that the industry
provides employment to over 600,000 people, including cutters,
polishers, miners and marketers.
"For Sri Lanka to become a gem and jewellery trading hub and achieve
higher export targets through value-added products, the lapidary
industry and jewellery craftsmen need to be developed further," Akram
Cassim, CEO of Colombo Jewellery Stores, said.
With many retailers today still importing designs, the industry also
offers plenty of potential for value added, according to industry
"Only a small portion of the gems exported through formal markets are
actually jewellery, so there is enormous potential to add further
value," trader told . "This could easily double export volumes."
Exploration also presents additional hurdles for the industry. Sri
Lanka remains opposed to industrial-scale mining or foreign
participation in the trade, meaning that most gemstones are acquired
from pit mines dug by smallholders.
Stakeholders have long called for geological information mapping (GIM)
to help with exploration, as most producers do not have the resources to
conduct independent exploration.
With the country's Geological Survey and Mines Bureau legally
confined to exploration of minerals other than gems, the National Gem
and Jewellery Authority of Sri Lanka would likely be responsible for any
future GIM efforts, though no official steps in this direction have been
The gem mining industry in Sri Lanka
Sri Lanka has been famous from time immemorial for the great variety
and abundance of gem minerals of extremely high quality and uniqueness,
earned it the name Ratna Deepa meaning Gem Island. Nature in her bounty
has chosen the bosom of Sri Lanka to enshrine some of her rarest
Significant gem fields had been known from ancient times. Blue
Sapphires, Cat's Eyes, Alexandrites, Rubies, Star stones found embedded
in layer of gravel and sand, in river beds, marshes, fields or
accumulated at the foot of hills have made Sri Lanka the renowned island
These precious stones perfected in the laboratory of nature lay
hidden for countless ages, their luster undimmed, their value
Sri Lanka ranks with Myanmar, Brazil, South Africa and Thailand as
one of the world's most important gem bearing nations. The story of Sri
Lanka's gems is as old as civilization itself.
Legends, myths and the occult have been associated with the long
history of the island's precious stones. Gems are deeply embedded in the
traditional beliefs and the religious life of the majority of Sri
Lankans. Priceless gems are among the treasures kept in the relic
chambers of the great Buddhists tupas in the island.
The earth's greatest concentration of gems in over 50 varieties is
found within the country's land area of approximately 25,000 square
miles. The Arabs called this the land Jazirat Kakut, which denotes the
same meaning the Island of gems. The fame of her gems spread far and
wide. These priceless precious stones have adorned the crowns and
thrones of royalty in many parts of the world
Mining for gemstones is carried out on a cooperative basis. A number
of miners form a group and share the costs of labour and profits from
the sale of gemstones. This group is known as a Karuhavula. Its most
important members are the investor and the miners.
The investor finances the whole operation project up to the sorting
stage. The miners decide on a suitable site, once a suitable site is
chosen, miners excavate until they reach the gem bearing illama. A miner
is able to judge the depth of the illama by inserting a steel rod into
the earth until it reaches the layer below the illama, called the malava.
Although the malava is found beneath the illama, there is a
possibility of finding another layer of illama beneath the malava. The
mine owner, being the head of a mine, is responsible for various legal
activities. The organization and operation of a mine requires particular
skills and some considerable experience of the industry. Mine owners
tend to have been involved in gem mining for a significant period of
time and the majority of them were middle aged.
There are two common mining methods. One is pitting: Pitting shafts
are made to reach levels from 10 to 12 feet of pay gravel exist. Tunnels
are made to collect the pay gravel around the base. Walls are structured
with timber species that resist water rot and fern. Pits are generally
confined to marshy terrain and paddy lands. Flooding is the main hazard
in pit mining and the workers of the present day generally use water
pumps to dewater.
The other is riverbed mining: Gems are also mined from riverbed
material by using suction pumps for extraction of riverbed gravel for
gems. Much harm can be done to riverbank stability by removal of gravel
thus undermining the banks because there is no control of the operation.
The mining methods used in Sri Lanka are specifically developed and
suited to the terrain. Compared to other gem producing countries some of
the techniques are both simple and apparently obsolete. However, these
methods are effective, adequately efficient and generally safe. Moreover
the initial capital cost of mining operations is generally very low
which permits greater involvement by relatively poor rural inhabitants.
The Government has in fact banned the use of heavy, mechanized mining
methods in gem mining. This not only prevents rapid, destructive
depletion of an irreplaceable resource but also maintains an alternative
source of revenue for much of the rural population who otherwise would
be dependent almost entirely on agriculture.
Excavation of a pit is done usually by manual labour. In the first,
stage, miners remove the non-gem bearing material, often soil, sand and
gravel. This material is taken out of the pit and sorted and stored to
be used later to fill in the hole.
If the pit is shallow, the soil is removed with the miners standing
at different levels of the pit and baskets being passed by hand to hand.
If the pit is deep a pulley system is used. The illama is also removed
in the same manner. In some instances the illama is excavated
horizontally thereby creating a tunnel called a donava. These can extend
from 6 to 9 meters form the shaft. A temporary shed is made above the
gem pit to protect the miners from the heat. Planks and logs are used to
support the walls of the pit. While timber is usually used for this
purpose, as prices increase for materials, some miners more use
alternatives such as steel plates. Gem pits sometimes suffer from
accumulated water when the pit is dug and therefore mines are equipped
with pumps to remove this water. Time taken to mine is usually
determined by the amount of illama found. Mining can range from a couple
of days to a couple of years.
After being thoroughly washed, the contents of the basket, called the
nambuva, is examined for gemstones. The basket is tilted at an angle
allowing the sunlight to fall on the contents. The examiner usually
determines if a stone is valuable by the color, variation of color,
transparency form or shape. The same basket is examined many times by
different people. This is the most important stage of the mining and
done by the most experienced hands.
As time passed, new mining methods were discovered which did not
hamper the cultivation of crops and the farmlands remained untouched.
With advanced technology a vertical shaft was protruded until it reached
the illiam. Feeder tunnels were built and were supported by timbers of
wood and bamboo.
The miners dug the tunnels and loaded their knapsacks with the
precious gravel as made their way to the surface. Pumps operated
full-time to keep the tunnels water free. The process of washing,
screening and sorting took place on the surface, once the miner climbed
The gemstones erode from mineral rich rocks and eventually get washed
down the rivers. Finding the right spot in the river is the tricky bit
as strong currents sweep away even the heaviest gems and slow waters
means sifting through a lot of unwanted debris.
Perhaps the simplest type of mine workings is the river dredging
which are developed around the exploitation of present day stream
gravels and illam exposed during down cutting and erosion by the river
They also sometimes build dams to help them trap and sort the
gemstones before they do the sieving. In their simplest form the
dredging operation involves raking up a the river gravel or illam into a
shallow pile using a long handled iron rake-like tool known locally as a
mammoty, and letting the river wash away the fines.
The resulting coarse fraction is then picked over by workers to
extract the gem minerals. Often riffles, small dams and other barriers
are built up on the riverbed to control the current and direct it into
riverbanks or accumulations of gravel to assist in winnowing out the
fine sediment and washing the gravels illegal dredging of riverbed
gravels for gems.
The gravel bar is an artificial construction and such features
significantly modify the flow of the river resulting in damage to
riverbanks and seriously affecting water supply. In some instances,
particularly where the river is too deep to permit traditional dredging
methods bottom sediment is dredged into weighted baskets pulled across
the riverbed on ropes.
The resulting basket of sediment is then processed on the riverbank.
River dredging is carried out both legally and illegally and if not
closely controlled has significant negative environmental impact as well
as health and safety implications for the workforce. River gravels are
dug out using a hoe and washed in-situ. Unwanted material is simply
discarded with fine-grained mud and silts held in suspension in the
The majority of gem mining in Sri Lankans carried out within
communities by the local population. It is pre-dominantly a
low-technology labour intensive industry carried out usually when the
agricultural workload is at a minimum and when the paddy fields are not
producing crops. In Sri Lanka gem mining is solely a male occupation.
The number of staff employed by owners varied depending on the type
of operation carried out with five to six people employed in shallow
mines, 8-12 in deep mines and around seven in river dredging. Total
numbers employed tended to average between 11- 16 depending on the
number of mines owned.
The length of time of involvement in the industry also varied but the
majority of owners had worked in the industry for at least six years
with some having worked up to 30 years in the business. Most of them
took up mining as it was shown to be profitable and several had
progressed to become mine owners after working as gem miners themselves,
using what they had earned to invest in their own mines.
Gem mining is a physically demanding and labour intensive occupation
and which is restricted to the male population in Sri Lanka. Mine
workers cover a wide range of ages from 18-50 with a relatively even
distribution throughout this range. No children below the age of 18 are
allowed to work in gem mining.
Mine workers enter into a verbal agreement with a mine owner who is
generally someone well-known and local to the area. Seventy percent of
miners work in the industry because there is either no alternative
employment or because they have specialist skills in the industry. Only
a small proportion (20%) got involved with mining in anticipation of
making high profits. Mineworkers tend to stay in the industry for
several years with the greatest majority having worked in mining for