Sri Lanka’s Gemstone Mining Industry Affected By The Recession

Most of the gemstone miners of  Sri Lanka are forced to pull out of their mining jobs. According to a recent report by the Sunday Times of Sri Lanka the miners cited numerous reasons for pulling out of the industry, top on the list was the endless bureaucratic red tape and the global economic downturn.

Most of the mining personnel are looking for jobs in other sectors of the economy. Approximately 90% of the mining has com to a standstill. The gem mining areas of Matale district ,which includes Dewaladeniya, Laggala, Kaluganga, Bakumuna and Dasgiriya are deserted.

Billions of rupees worth of foreign exchange which comes to the country annually will be lost if the mining industry is allowed to collapse.

Due to the global economic downturn many foreign buyers are absent at the auctions. However the miners are blaming the authorities more than the economic downturn for causing unnecessary delays, unreasonable regulations, increased taxes and corrupt officials. They also noted that repeated appeal to the authorities to rectify the anomalies fell on deaf ears. About 5000 gem mining families have lost their livelihood, many of them are looking for alternative employment.

Mr K. M. K. Kohonnara a miner told the Sunday Times that “he predicts hard times ahead .Uncut stones that not long ago fetched Rs. 1 million don’t sell for even Rs. 100,000 these days.”

The miners also said that the overhead cost of running a mine was very high. Overhead costs include operational costs,taxes, documentation and other expenses.

Mr B. L. H. Ratnayake a miner told the Sunday Times that the government should come up with a plan to help the mining industry.

According to Mr E. M. Kamal there are about 2000 gem mines in the Matale district but only about 10 are operating.

Ajith Perera, the deputy director general of the National Gem and Jewellery Authority told the Sunday Times that the authorities are trying to look into the problems faced by the miners and that certain amendments will be made to the rules and regulations.

Mr Perera also noted that some of the amendments to be made include issuing of mining licences from the six regional offices of the National Gem and Jewellery Authority. Presently licenses are issued only by the Chairman of the National Gem and Jewellery Authority. This move will help to alleviate some of the delays.

Mr Perera also noted that due to illicit mining strict guidelines and regulations were necessary. “If we become too soft, it will be something like the freedom of the wild ass. In any trade, the government or other authority must impose certain restrictions. Every industry needs guidelines, and the gem mining industry is no different,”said Mr Perera.

There has been a sharp decline in the number of applications of mining licenses. Last year 4202 licenses were issued. During the first 5 months of this year only 1,417 licenses were issued. During the first 5 months of this year gem exports dropped by 30% therefore resulting in the loss billions of rupees in foreign exchange.

External Link: Sunday Times Sri Lanka

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