Ethical Gem Sourcing

GemGroup Sweden


The Nivithigala Project Briefing

Local sourcing & cutting from rough in one the most mine-rich communities of the Sri Lankan highlands. Est. December 2020

Backdrop

Sri Lankan mining is viewed as a role model internationally for its successful implementation of multiple environmental and social reforms. Often working in teams of 8 or 16 people, miners employ a traditional system of sharing the work, costs of the operation and profits from the rough sales. It is also common to employ a production sharing agreement within the group. Since the formation of the State Gem Corporation in 1971 (currently the National Gem & Jewellery Authority of Sri Lanka ; NGJA), the millenia - old ways of mining on the island have been gradually formalized. Today, marking 50 years since the creation of this regulating body, Sri Lanka has come a long way along the road of formalization. Each year, around 5000 - 10,000 gemstone mining licenses are issues by NGJA (the 2013 figure was 6500 out of which more than 6000 were for small pit mining). The cost of a license per 2021 amounts merely to just over $100 and includes, in addition to handling fees, an environmental inspection by a regional NGJA officer, accident insurance for the workers as well as a deposit. The deposit, making up a significant share of the cost, is later repaid to the mining group after the pits have been refilled and the land (usually paddy fields) is restored. A license is valid for 12 months. If the land is not restored upon closure of the mine, the deposit is instead used by NGJA towards rehabilitation of the land. In addition, NGJA is extremely conservative in approving requests for mechanical mining (only a handful of mechanized operations exist on the entire island) due to environmental concerns. As a result, virtually all mining operations remain small-scale and environmentally sustainable. There is a strict ban on child labor throughout the country, particularly strongly enforced within the mining industry. All Sri Lankan sapphires mined today are conflict free.



While most other sapphire-producing countries are in an earlier phase of their formalization efforts, Sri Lanka has had more time and has indeed come further: several parties we have spoken with in the last two years - NGJA themselves, senior dealers, people involved in mining and a third-party NGO - estimate the percentage of mining projects operating under NGJA licenses to be in the 80-90% range. This is a noteworthy achievement domestically (in Sri Lankan economy as a whole, 51% of all work still occurs within the informal sector according to the Labor Force Survey 2017) but most of all it is showing the way for gem mining formalization processes of other regions of the developing world.


Loaction

The most important mining region in Sri Lanka is the Rathnapura district within the Sabaragamuwa province, with the city of Rathnapura sitting at the center - a millennia-old hub for the gem trade and related crafts. Most of the actual mining is not taking place immediately outside Rathnapura but rather spread out throughout the district. In its Knowledge Database, NGJA identifies six townships with a particularly high concentration of small-scale mines: Eheliyagoda, Kuruwita, Pelmadulla, Balangoda, Kalawana and Rakwana. Our current project has its base in Nivithigala, a gem mining town situated between Kalawana and Pelmadulla, about 15km south-southeast of Rathnapura city. With plenty of gem mining activity in its own surroundings, as well as close access to the nearby mining activities around Kalawana, Balangoda and neighboring Karawita, few places in Sri Lanka are as close to as many gem mines.


Sourcing process

Our cutter in Nivitihgala, meeting up with miners nearby to source local rough, currently cuts around 80-110 carats of sapphires each month. The cutting is done in his home studio locally in Nivitihigala town. He prefers to buy individual stones, or a handful of select pieces, from individual miners - the rough stones they obtain as part of production-sharing agreements or, also common, as partial payment for their work. The cutter takes notes of the place of origin (closest town) for each rough gem he purchases and cuts. Now and then, we purchase accumulated mixed "mine-runs", an accumulated production from say a month of work, but these sort of lots normally include a wide variety of quality grades and often generates a larger percentage of wastage in our facet-quality-only production.


Regardless of whether the material is purchased in the form of select pieces from individual miners or as accumulated lots from the mining group or mine owners, this mine-to-market type production results in an unusually high percentage of the sales price ending up in the hands of the miners.


In June 2021, we purchased an additional cutting machine for our cutter, which has allowed him to take on an apprentice and increase the volume somewhat. In June 2021 we also acquired a handful of small rough parcels imported from the Ilakaka area of Madagascar, sourced through the Rathnapura markets, in an effort to reduce the percentage of white and yellow hues in the overall production (colorless and off-white rough constitutes a very high percentage of local Sri Lankan untreated rough. They can sometimes be heated to blue, but this usually requires stronger furnaces not available to the miners within our Nivitihigala project).


Testing

When the batch of the month is completed, our cutter heads to Rathnapura city and hands over the finished faceted goods to a lab in central Rathnapura. At the lab, a Graduate Gemologist checks most of the 1ct+ sapphires, making sure no bad apples have managed to sneak into the production. (At the main Rathnapura rough market, synthetics made to look like natural rough sapphire pebbles are fairly common. Considering that we buy very close to the mines, the risks are lower for us but people on all levels of the trade can be creative and it remains necessary to run regular third-party tests*).


*So far, in seven months, we have not yet bumped into any synthetic sapphire. On one occasion however, in July 2021, we purchased a pink sapphire pebble that seem to have somehow pained, or soaked in a color-bath, to look like a stronger pink color. Upon cutting it, the bubblegum pink "skin" was washed and grinded away.'


The lab also separates the fully untreated sapphires from the ones that have been subject to traditional heating - a popular practice done locally by many small-scale "burners" in Nivitihgala and other Sri Lankan gem mining towns, using fire and blowpipes employing techniques that have existed for many centuries to slightly improve the color and/or clarity. Modern electrical furnaces are available with burners in Ratnapura city, but generally not to the miners in Nivitihgala and nearby towns. To these miners, the old blowpipe techniques are still the way to go and usually available right around the corner.


Exporting

Lastly, after being examined by a GG at the Color Stone Laboratory in Rathnapura, each batch is handed over to a Colombo-based exporter who completes the export and makes sure that NGJA export and tax procedures are complied with.


Origin guarantee

We guarantee the Sri Lankan origin of all goods labelled with a place of origin that is located within Sri Lanka.


Stockholm 2021-08-07


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