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Sapphire miners at work outside of Ilakaka in Madagascar.



  Madagascar failing to regain its status as a world-class sapphire producer


April 13, 2012


For 10 years Madagascar was the most exciting place to be in the colored gemstone world. In 1998, the community of Ilakaka, a small village in the southwestern part of the island, was home to 40 residents. Then a massive alluvial sapphire deposit was discovered in a nearby river valley, and by 2005 its population had swelled to 60,000.

At its peak, during the first half of the previous decade, Madagascar stood alongside Australia as one of the world's two largest sapphire producers. Production, which was 115 kilograms in 1995, rose to 9,326 kilograms by 2002. The Ambondromifehy deposit had been discovered in 1996, but the real leap forward came with the discovery of deposits at Ilakaka and Sakara, respectively in 1998 and 1999.

By 2005 production was falling because of the depletion of near-surface resources. However that was not the primary reason for the precipitous decline of Madagascar's sapphire industry. It had more to do with a toxic mix of poor economic planning and a faulty political structure.

During most of the sapphire boom, the bulk of the country's output was shipped to Thailand, India and Sri Lanka for processing. But in February 2008, the former president of Madagascar, Marc Ravalomana, issued a decree banning gemstone exports. This he hoped would be a catalyst for the developing of a local cutting industry.

Gemstone production, already in decline, plummeted, largely because the inadequate manufacturing infrastructure and the reluctance of foreign companies to invest in the Malagasy economy. The situation worsened at the end of 2008 when as the world was drawn into economic crisis and gemstone consumption fell globally.

In March 2009, the government of Madasgascar was overthrown in a military coup. The interim government suspended mining permits and discussed the revising certain mining contracts.

The ban on gemstone exports was eventually lifted on July 17, 2009 by the interim minister of mines, Jean Rudolphe Ramanantsoa. By then, according to his ministry, the country had lost earnings of $39 million.

But Madagascar has not managed to regain its former glory as a primary producer of sapphires.
"With the global meltdown a few years back, people stopped buying rough as they needed to spend money on necessities rather than luxuries," said Brian Norton, a gems dealer in South Africa, a recent interview with MSN. "With this happening money was not getting back to mines and miners stopped mining or could not afford to mine, and started subsistence farming instead to provide for the family."

There still are sapphire mines operating around Ilakaka, but they far and few between, and, with most deposits now located deeper below the surface, the miners have to work much harder to extract the sapphires.

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