Sri Lanka - the island of gems

Sri Lanka - the island of gems

Sri Lanka, formerly known as Ceylon until 1972, is a fast growing island economy in the Indian Ocean. Almost a decade on from the conclusion of its 30 year civil war, the island is becoming a Mecca for gem dealers and tourists alike. Akin to much of the gemstone production in the developing world, most of its mining is currently artisanal in nature but things are starting to shift towards a more organised and efficient model. In addition to the domestic gemstone output, Sri Lanka is also increasingly building a reputation as both a distribution hub and centre for cutting and polishing and treating stones, as well as manufacturing jewellery. This has been encouraged by a shift in government policy to reduce bureaucracy and red tape when it comes to the regulation of imports and exports, making the Sri Lankan gem and jewellery industry more competitive in the international market. For many centuries Sri Lanka has capitalised on the advantages of its favourable geographic position, straddling many of the trade routes between Europe, Africa and the Far East. In addition there is strong domestic demand from the island's 21 million inhabitants for a range of traditional 22 carat jewellery and the boost in tourist footfall has opened up new home market opportunities. The majority of the gemstone mining takes place on the southwest region of the island and this can be made challenging by the Summer monsoon, which runs from June to October each year.

(Rare cat's eye chrysoberyl - one of the more unusual stones of Sri Lanka)

The history of the gem trade in Sri Lanka dates back more than two millennia, a fact evidenced by some of the early names given to the territory, including Ratna Dweepa, or "island of jewels" in Sanskrit, and "Serenddib in Arabic, which is the route of the English word "serendipity." The principal gemstones found on the island include beryl, spinel, tourmaline, corundum (sapphire and ruby), moonstone and cat's-eye chrysoberyl. In the twentieth century, the island lost a lot of its previous lustre as a gem trade hub. This was contributed to by the fact that new sources of gemstones were discovered and the Sri Lankan industry showed a reluctance to adopt new practices, such as heat treatment and modern cutting techniques. The situation was worsened by an unsympathetic and bureaucratic government, who prevented the sort of rapid expansion seen in the Thai gem industry. However the 21st century has seen a resurgence in the Sri Lankan gem and jewellery market, as it has modernised and reformed in great measure. The regional geophysics of the island has favoured the formation of corundum and spinel by removing silica and water, aiding the chemical processes which form these stones. Despite the recent attempts to modernise mining practices in Sri Lanka, the majority of its production is still carried out by hand. To some extent this is caused by the way in which the National Gem and Jewellery Authority (NGJA) issue mining licences, as they are often reluctant to encourage mechanized processes.

(Labour intensive traditional riverine gem mining in Sri Lanka)

Part of the rationale behind this desire to maintain traditional working practices relates to the fact that over 60,000 people are kept in work by this labour intensive industry and that is important in a country with limited welfare and social security! Crucially the NGJA tightly control the environmental impact of mining operations, including the important processes of filling in shafts and pits on completion of the extraction process so that they do not present a breeding ground for Mosquitoes in the form of pools of stagnant water. One of the striking things about the Sri Lankan gemstone industry is that, despite some diamond cutting taking place, it is coloured stones that prevail on the island, especially corundum. This is crucial to the future of the market here as the trade in coloured stones, despite accounting for less than 10% of the overall gemstone market, is the fastest growing segment. After some initial reluctance, Sri Lanka has now forged a reputation as a centre for the expert heat treatment of coloured gemstones, a process to which over 90% are subjected. Those who perform the heat treatment are known as 'burners' and they enjoy a worldwide reputation for being able to get the finest colours out of any stone, utilising a two stage process involving gas and electric furnaces to achieve remarkable results. This technique is so effective that some other countries actually send their pre treated stones for a second 'burn,' as the heated stone can fetch a price in excess of 6 times its original value and the burner only charges 1/3.

(Heat treating stones is now one of the biggest industries on the island)

Popular across much of the Indian subcontinent and the Middle East, 22 carat gold jewellery is produced in large quantities in Sri Lanka, where it is made with a special alloy containing slightly more copper and slightly less silver, giving it a more reddish colour compared to Indian examples. Unlike Western cultures many Asian societies, including Sri Lanka, view jewellery as an investment and a hedge against economic volatility. Furthermore, it is also lavishly displayed in traditional Sri Lankan and Indian weddings. Indeed dowries are often still paid in 22K gold, although it is actually the bride who receives approximately 80% of gold that is gifted to the couple. Despite the island being such a vibrant centre for the gemstone trade, the domestic market actually favours gold jewellery that is not adorned with gems. This is in part due to the fact that Sri Lankans can more easily pawn items of jewellery that do not contain gems in times of economic hardship because they are easier to value more closely to the cost price of the piece. As a result the vast majority of the loose stones that pass through the island are exported to international markets. Sri Lanka has made its name internationally for the production of sapphires in particular. Originally these were entirely mined locally but more recently they have included sapphires from around the globe that have been shipped to the island for treatment and/or cutting. Adjusted for inflation the price of untreated, top quality sapphires has increased seven fold in the last 50 years, driven to large extent by rising demand from China but also from Europe and North America.

(The finished product - a beautiful cut and polished, royal blue Ceylon sapphire)

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