Financial Times

Plantation firms to dig for gems
Regional plantation companies are getting ready to start gem mining on their estates, opening up the possibility that hitherto untapped gem deposits could now be available for exploitation.

The move follows a recent opinion given by the Attorney General that RPCs could apply to the National Gem and Jewellery Authority (NGJA) for a licence to do gem mining. Among the RPCs listed on the Colombo bourse that could benefit from the move are those known to have gem-bearing lands, especially estates in the Ratnapura-Balangoda area, such as Kahawatte Plantations, Balangoda Plantations, Hapugastenne Plantations and Bogowantalawa Plantations.

Several RPCs with gem deposits on their land have for years been trying to see whether they could mine for gems as it appeared to be a grey area in the privatisation agreements. The right of RPCs to do gem mining became a legal issue because the land is owned by the state which has given the estates on 53 year leases under the privatisation programme.

Under the existing regulations RPCs were not allowed to mine for gems on their own and the only way they could benefit from gem mining was to auction gem lands through the NGJA. RPCs were then entitled to a share of the proceeds from the sale of gems.

"Most firms did not do so because they would have got only a pittance for their lands and a share of the proceeds," said an RPC official. "With this particular decision it appears that the firms can apply for a licence to the NGJA without auctioning their lands."

Plantation Industries Ministry Secretary J. Abeywickrema said the AG's opinion had been conveyed to a committee consisting of government and RPC representatives, set up under the ministry to determine the rights of RPCs to gem.

"The AG has said that under the normal law of the land the RPCs can apply for mining licences from the Gem Authority, which then can decide depending on the merits of the case." RPC officials said this meant the regulatory hurdle had been cleared.

"This is a fairly significant step. The previous understanding was that RPCs could not mine. Now plantations appear to have been given the green light to apply for a licence to gem. Once everything is clear we will look at the opportunity."

One official in an RPC with lands known to have gem bearing deposits said they would look to partner with existing players in industry to develop a gem mining project but stressed that it was still at an early stage and that there were no projects yet.

RPC officials said they would be careful to ensure there would be no harm to tea bushes from gem mining. "Not every part of an estate is planted with tea. We would look at areas with high potential for gems."

NGJA officials said it is the authority that is responsible for the alienation of the right to mine for gems on state land.

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