Efforts afoot to tap sapphire treasure

Three decades after it abandoned extraction of Kashmir's unique gemstones, a state-owned company plans to go back into the mountains.

SRINAGAR, INDIA // The sapphire mines on the steep mountain slopes of Indian Kashmir's remote Paddar region have been closed for three decades, but the rare blue-green gems, said to be the colour of a peacock's neck, are still finding their way on to the international market. Ever since the state-run mining group, Jammu and Kashmir Minerals Limited (JKML), stopped major work in the militant-infested hills in 1978, the mines have been plundered by opportunists looking to make a quick buck.

According to one official, between US$4 million and $5 million (Dh14.6m and Dh18m) worth of sapphires are smuggled out of the area each year, often with the collusion of government officials. The illegal extraction of the gems, also known as Neelam stone, increased after the outbreak of separatist violence in 1989-90 when militant groups allied with Pakistan started fighting the Indian army. The remoteness of Paddar, tucked high on the back of the Himalayas, has made it a favoured hideout for the militants.

When JKML halted mining in 1978 it blamed a lack of financial resources, limited working time and difficult conditions. From August, the area is whipped by heavy rain and then snowfall that blankets the slopes in drifts of up to three metres deep. The snow only starts to melt in June, which leaves just three months to mine the sapphires. The Kashmir stone is known as the King of Sapphires and fetches the highest price per carat. Its deep blue colour with cornflower tinge marks it from stones derived from other parts of the world.

Kashmir sapphires were discovered in the 1880s, but only a few have been mined because of the difficult terrain and basic mining techniques used by the state-run company. Although there has been no large-scale commercial mining for the past 28 years, JKML managed under heavy security cover to extract 21,638 grams of sapphire between 1998 and 2005. In March last year, JKML put several of the sapphires up for auction, drawing bidders from around the world and fetching $2.79m for the lot. The money was used to pay salaries of staff at the company, which has been in the red for years.

Another auction is planned in the next few months. "At present, we have 15 kilograms of sapphire in our custody. Once the proposal to put it under the hammer is cleared, we'll approach [India's] National Mineral Development Corporation for proper washing of the raw sapphire by the experts," said Manzoor Ahmed, an official at the industries and commerce department in Kashmir. A team of mining engineers and other experts from JKML was supposed to start mining the sapphire again last month, but fresh snowfall has delayed the start.

In the meantime, the government has been trying to interest countries that have experience in mining, such as South Africa, to join it in exploration and excavation of the sapphire slopes. Efforts to encourage domestic businesses to get involved failed as none were interested in working in such poor conditions and under militant threat. The average temperature during the working season of July to September remains about 10 degrees Celsius during the day and minus 2 degrees at night. However, in the mines, the temperature is always about minus 5 degrees.

The JKML, which had led a vigorous campaign both within India and abroad to ensure competitive prices for the available stocks of the sapphire, is now hoping that the improved security situation will encourage more interest in the mines. "If we don't find any bidders we will go for scientific extraction of sapphire from Paddar mines on our own," Mr Ahmed said. Sajjad Ahmed Kichloo, a state legislator from Kishtwar, said that until that happened, the government should step up efforts to protect the mines from smugglers.

"The authorities have in the past miserably failed to take care of our mineral wealth in a proper manner. I feel uneasy as the risk of theft of precious Neelam remains there in view of its colossal market value and demand," he said. "What is needed are immediate measures on a war footing to check pilferage of this mineral wealth and ensure foolproof security in Paddar." Officials said it is impossible to completely seal off the area, especially during the harsh winter months. The area is about a three-day walk from a police station.

Hemant Kumar Lohia, the area's deputy inspector general of police, said the Paddar mines are located about 100km from Kishtwar, the district headquarters, and are protected "till it becomes impossible for our boys to stay there". However, local sources said some people do manage to reach the mines because they have experience walking on snow in extreme wintry conditions. Villagers who take the stones do not have the right contacts to sell them and so often accept throwaway prices from brokers and even government officials who then sell them to jewellers in Jammu and elsewhere for a huge mark-up.