JADE : CHINA'S MAGNIFICENT STONE
The Chinese retail market has been cooling off, but jade mining in the Kachin province of Myanmar has been on the increase, causing a massive inventory buildup, according to a report by the Ash Center for Democratic Governance and Innovation of Harvard University.
The report is based on information from government sources and traders in Hpakant, Kachin province, the 30-square-mile source for nearly all jadeite. The authors noted that production began to expand in 2015 and jade dealers in Hong Kong corroborated the report’s observation of large and growing stockpiles of the gem in warehouses near the Myanmar border and dealers’ safes. It does not estimate the size of jade stocks, but interviews with others involved in or monitoring the jade trade agree it is extremely large.
“If China wanted to whittle down their stockpiles, they probably could do without (newly produced) jade for five to 10 years,” said one Myanmar-based official with close connections to dealers and the government.
Jade stocks are accumulating because production has far exceeded the market’s ability to absorb it. Some goods are locked in customs over ongoing valuation disputes and, more recently, there is a reluctance to sell better quality materials because prices have been softening. Producers and dealers can sit on large stocks because capital costs of mining are low and they do not rely on bank financing and don’t accumulate additional costs by holding inventory.
The report shows that jade production for the first nine months of 2015 (the latest available figures) totaled 24,000 metric tons, or 2.5 times the same period in 2014.
Myanmar’s central government cannot control illegal mining, according to the report, because it is involved with the rebel Kachin Independence Army, which has ratcheted up campaigns against it. The government has tried to limit access to the Hpakant region, by restricting new mining licenses and attempting to suspend mining after a series of deadly rock falls.
But mining for jade continues and as many as 200,000 unlicensed diggers continue to work the extensive waste piles, which has created enormous social problems and unsafe conditions. Nine diggers were killed on Feb. 10 when a slag pile collapsed onto them, according to a report in Radio Free Asia.
The report is based on information from government sources and traders in Hpakant, Kachin province, the 30-square-mile source for nearly all jadeite. The authors noted that production began to expand in 2015 and jade dealers in Hong Kong corroborated the report’s observation of large and growing stockpiles of the gem in warehouses near the Myanmar border and dealers’ safes. It does not estimate the size of jade stocks, but interviews with others involved in or monitoring the jade trade agree it is extremely large.
“If China wanted to whittle down their stockpiles, they probably could do without (newly produced) jade for five to 10 years,” said one Myanmar-based official with close connections to dealers and the government.
Jade stocks are accumulating because production has far exceeded the market’s ability to absorb it. Some goods are locked in customs over ongoing valuation disputes and, more recently, there is a reluctance to sell better quality materials because prices have been softening. Producers and dealers can sit on large stocks because capital costs of mining are low and they do not rely on bank financing and don’t accumulate additional costs by holding inventory.
The report shows that jade production for the first nine months of 2015 (the latest available figures) totaled 24,000 metric tons, or 2.5 times the same period in 2014.
Myanmar’s central government cannot control illegal mining, according to the report, because it is involved with the rebel Kachin Independence Army, which has ratcheted up campaigns against it. The government has tried to limit access to the Hpakant region, by restricting new mining licenses and attempting to suspend mining after a series of deadly rock falls.
But mining for jade continues and as many as 200,000 unlicensed diggers continue to work the extensive waste piles, which has created enormous social problems and unsafe conditions. Nine diggers were killed on Feb. 10 when a slag pile collapsed onto them, according to a report in Radio Free Asia.
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