jade Mining Blood from a Stone

Chinese collectors pay billions for imperial jade from Myanmar but the conditions for people mining the stones are perilous. Most of the revenues go to private hands.
Illegal jade mining in Myanmar.

Tint Soe is no stranger to the fickle, dangerous business of jade: “It's all about luck,” he said.

Mr. Soe is a jade trader, a middleman from Hpakant, the mining city in the north of Myanmar. The jade business can earn people a lot of money – some stones cost as much as a diamond. It is a risky game, he added. “Many lose their fortunes; the workers lose their lives.”

Mr. Soe is one of the lucky ones.

In the deal of a lifetime, he sold a rock that weighed three kilograms for $50,000 in Rangoon; he bought it from a mine worker for $3,000. He hopes to buy himself a Japanese SUV.

Even today, at least a half of all revenues from jade mining go into private hands.

Myanmar, Mr. Soe's homeland, is also known as the “land of jade.”

Kachin state in northern Myanmar is one of the few places in the world where imperial jade can be found. People pay enormous prices for the stone in China, according to Bertil Lintner, an author and expert on the region.

Video: Young men in Myanmar mining for jade.

The people living in the mountains of Kachin are poor. In the past, Myitkyina, the capital city of Kachin state, was controlled by opium producers and jade kings. While more recently, people were able to afford smuggled goods like color televisions and video recorders, their main access to wealth was war.

Those wars go on today, over who gets the biggest share of the region's raw materials: precious woods and rubies, sapphires, gold, oil and jade.

The Buddhist Burmese, who make up 60 percent of the multi-ethnic country of Myanmar, claim the wealth but this is disputed by minority armies such as the Kachin independent army (KIA), the guerrillas of the predominantly Christian Kachins.

It is not known how much money is involved. The military dictatorship, which has ruled for five decades in Myanmar, has pursued reforms since 2011 and is advised in economic matters by researchers from the United States. A recent study found that in 2011 alone, Myanmar mined more than $8 billion – one sixth of the country's gross domestic product. In the national budget, only $34 million was listed as jade income for that year.

To address this shortfall in the government's budget, jade can now only be auctioned at the annual gems fair run by the ministry for mining in Myanmar's capital city Naypyidaw. The stones traded there originate from the owners of state-issued mining concessions. The profits are shared – at least that is what is required by the law. The most recent auction, in summer 2014, generated €2.6 billion, calculated in euros due to sanctions imposed by the United States.

 

Workers earn a fraction of the profits from jade.

 

Most jade is still mined illegally though, so little money reaches the population and only a small portion of the revenues flows into the national budget to build streets and harbors, hospitals and schools. “Even today, at least a half of all revenues from jade mining go into private hands,” Mr. Lintner said.

It is difficult to track those who are growing wealthy from jade mining as Myanmar is changing rapidly towards a path of reform. Hpakant, the mining city and center of the industry, was long closed to people without a Chinese passport. According to the government, this is due to ongoing fighting between army and KIA rebels. Now, locals can travel to the area again.

Closay Saw was one of the first people to take the dangerous route from Myitkyina to Hpakant. It is only 170 kilometers but the route is even difficult for large trucks that get mired down in muddy trails soaked by monsoon rains. Although the state army controls the cities and towns, the KIA guerrillas set up street blockades and demand tolls from travelers.

Video: How industrialization is reshaping the environment.

Mr. Saw described his journey as like a jungle. After three days' travel, the overgrowth above thins, revealing a glimpse of Hpakant. In contrast, the mining region resembles a desert, where 50,000 workers equipped with picks and small axes seek jade.

“The work conditions for jade miners are like slavery,” Mr. Saw said. There are no safety regulations nor government controls; when a hillside collapses, it buries many workers with it. Amnesty International recently criticized the working conditions.

 

A jade miner injured by a fall.

 

 

Mr. Soe, the middleman, is aware of the danger. In his home city, he founded and supports a chapter of the National League for Democracy (NLD), the party of the Nobel Peace Prize winner Aung San Suu Kyi: “More money from our country's wealth should reach local communities,” he said.

This is a dream for now. Workers in Hpakant earn a maximum of $7 per day; many working in the mostly illegal mines only earn a share of the profits, supervised by people they call “Laoban,” the Chinese word for boss. Workers who find jade may earn 10 or 15 percent of the price of the stone, if the deals are done honestly – which is rare. Otherwise, there is only food for free.

 

Jade rock in Myanmar.

 

At the night market in Hpakant, the middlemen show the stones by flashlights under plastic awnings lit by neon tubes. The rocks range from cheap light green, milky-white or brown junk jade to the moss-green imperial jade, polished, prepared and finished for customers in China who are willing to pay more than they would for the most expensive diamonds. “Everyone hopes one day they will one day be able to afford a simple house,” Tin Tun, a mine worker, told the photographer Minzayar Oo, who traveled through the military roadblocks to reach the mining city and take the photographs.

After wages are paid for the day, young girls who work as prostitutes come out onto the streets. Drugs – heroin, jaba and other amphetamines – are also available, often for less than one dollar. Sometimes they are paid as a part of the wages. Alongside malaria and mining disasters, HIV is one of the most frequent causes of death in the region. If diamonds are called “blood diamonds” from areas of conflict in Africa, the emerald-colored stone should be called “blood jade.”

In China, jade still exerts a strong appeal, partly because investors prefer to buy objects but also for historical reasons. Even in the Han dynasty, from 206 B.C. to 220 A.D., deceased emperors were buried with garments woven out of jade to bring them luck in their next life. Even today, many people in China believe jade jewelry can protect the wearer from peril.

Video: A jade merchant explains how to identify a stone of good quality.

The price for the most precious jade stones has multiplied five-fold in the last five years. In April 2014, a Chinese collector paid $27.4 million at Sotheby's for a jade necklace.

There is no clear classification for jade as diamonds are classed by carats, for example. “It is considerably simpler to estimate the price of a diamond or a ruby,” said Terry Chu, who works for the jewelry department at Sotheby's in Asia. For jade, it takes years of training and special knowledge.

 

Jewelry made from jade.

 

The first valuing of the raw stones takes place at the Hpakant night markets. If a dealer believes a stone is valuable, they hand it over to “jockeys,” Chinese smugglers who can bring the goods across the border illegally for further processing in Ruili, a small Chinese town.

More and more people in Myanmar complain about the jade leaving for China, even powerful tycoons well-connected to the generals who rule the country. The tycoons became wealthy towards the end of the military dictatorship; in 2011, when the last ceasefire with the KIA collapsed, they had to withdraw from the area. Now, almost all of the jade business is run by Chinese people. Many take advantage of the precarious situation; often the jade is mined and traded illegally.

Tay Za, one of the wealthiest men in the country, said action is needed so the stones can be processed in Myanmar. Mr. Za owns the Htoo holding company which holds dozens of mining licenses. He also presides over Myanmar's association of gem industries.

Mr. Za and many other tycoons invested in jade mining equipment in Hpakant up until 2011. Although the equipment is now rusting, they still have to pay $1 million every three years to extend their mining privileges, to the families of the generals who control the area on behalf of the government.

Mr. Lintner does not believe change will come soon. “Reforms in Rangoon or not, the war on jade will go on for a while; else how would the generals get rich?”

 

Jürgen Kremb is a journalist who covers Myanmar for Handelsblatt. To contact the author: [email protected]