Myanmar’s deadliest mine collapse in recent history caught the world’s attention in July, but local frustration with an industry controlled by outside companies has been growing for years.
By EMILY FISHBEIN and AUNG MYAT LAMUNG | FRONTIER
This article was supported by the Pulitzer Center on Crisis Reporting
It was the deadliest landslide in Myanmar’s recent history – about 200 jade miners buried in rainwater and mud when a dam of mining waste collapsed in Kachin State’s Hpakant Township on July 2.
Haunting images of strewn bodies and grieving families shocked people around the world, but it was not the first time the grey wasteland had made headlines. Landslides kill workers every year in the heavily mined region, home to the world’s largest and most lucrative jade reserves.
Once again, activists and rights groups called for dramatic reform and increased transparency to an industry plagued by corruption and conflicts of interest. Environmental watchdog Global Witness called the landslide “a damning indictment of the government’s failure to curb reckless and irresponsible mining practices in Kachin State’s jade mines.”
Change will not come easily. The industry generates billions of dollars a year, and in 2015, Global Witness identified a list of those involved that it said “reads like a who’s who from the darkest days of junta rule.” While the military, armed elites and connected companies dominate the industry, the public in Kachin State and the itinerant miners who risk their lives scavenging for jade have few chances to tap into this wealth.
Behind the latest disaster is a dramatic, two-decade transformation of Hpakant’s landscape in which government-licensed – and often military-linked – companies have supplanted small-scale miners and hastily stripped the land with heavy machinery. Today, without access to good land, hundreds of thousands of miners – mostly internal migrants – pick through company tailings and vacated sites for gems that the companies have missed.
Most jade is illegally exported to China, and companies routinely evade taxation on official sales. Handling, selling and transporting the stones is largely illegal in Kachin State, forcing freelance miners and local dealers to rely on an informal market. Should they come to possess a high-value stone, it is likely to be confiscated by companies or authorities; if they manage to sell it, the Kachin Independence Organisation is likely to charge its own ‘taxation’. Meanwhile, the fallout from the coronavirus pandemic has hit earnings, particularly for those on the bottom rung. Most workers remain trapped in poverty, and the state remains largely underdeveloped.
Frontier interviewed 12 local miners, brokers and sellers of jade, as well as community workers. All urgently expressed the desire to see Hpakant’s years of dispossession reversed, and a future in which locals have the opportunity to benefit from the area’s rich natural resources.
“Big companies come and dig and get millions, but there is nothing for the people from here,” said Lar Tong Sau Bawm, a 70-year-old Hpakant native and the deputy chairperson of the Kachin National Social and Development Foundation, or Wunpawng Myusha Zinlum Hpung in Jinghpaw. “I want the government to bring back a situation where everyone is given an equal opportunity and equal land to work.”
A land transformed
Those who have lived in Hpakant since before the big companies arrived in the late 1990s remember when most of the jade-rich area was under the management of the KIO. Then, jade seekers simply found a plot of land and paid the KIO in rice, cash or salt for permission to dig, or they dug for local bosses in exchange for weekly wages and food rations.
When La Hkawng, 49, moved there from northern Shan State in 1990, a local boss paid him a weekly stipend of K225 and 3 pyi (roughly 6.75 kilogrammes) of rice, stuffed in a green backpack.
“When we got jade, we washed it ourselves and sent it to the boss,” he told Frontier. He said his boss then sold the jade and split the profits half and half. “At that time, there was a good business culture and we didn’t have thieves.”
Times have changed for La Hkawng, who is now a village administrator with the General Administration Department and a shareholder in local jade sales; Frontier has used a pseudonym at his request.
The central government controls all natural resources across Myanmar and, since the late 1990s, has passed a series of regulations limiting rights to hold, sell or transport jade, largely criminalising these acts in Kachin State. For La Hkawng, the move led to three months’ imprisonment in 1998 for selling a highly-valued stone. “The problems started when the joint-venture companies came in,” he said. “Locals had to move from their land. Day by day, year by year, locals are in more difficult situations.”
Throughout the 1990s, the KIO gradually ceded management of Hpakant’s jade mines to the Tatmadaw, and the Ministry of Mines’ Myanmar Gems Enterprise handed out concessions, largely to associates of the regime. By 2000, small-scale miners saw land vanishing from under them, while heavy machines thundered in.
The amount of jade being extracted has soared, but this surge has not benefited the Kachin people, said Lar Tong Sau Bawm of the Kachin National Social and Development Foundation. “Neither poor nor rich can do much jade business … Our Kachins’ well-being in this generation in Hpakant is moving backward,” he said.
While registered companies can apply for small block permits, the government pushes locally-run companies to the periphery by licensing them plots where extraction is difficult or jade is scarce or substandard, according to Lar Tong Sau Bawm.
“Only those companies that have a connection with the government and military have mining blocks in good areas,” he said.
Pushed toward danger
Freelance, or artisanal, miners use two main methods to search for jade. Sluice mining (hmyaw dite) involves spraying water at a high pressure to expose and loosen stones. Practiced on vacated company sites, it requires a team and equipment, and hencemore capital and experience.
Most of Hpakant’s artisanal miners dig manually. The grey hue of the stones before they are cleaned and polished has leant the stones, and the miners, the nickname yemase, Burmese for unwashed.
In recent years, the number of yemase miners has swelled to roughly 300,000, of whom ethnic Rakhine and Bamar make up a large proportion. Some work under bosses, who generally provide food and accommodation and help miners sell their stones for half the profits. Other yemase miners work independently – a way for drug addicts to get quick cash for low-grade stones, or for more experienced, connected miners to try their hand at selling stones.
Yemase miners typically sift through tailings heaps on company sites at night and during the rainy season, when companies are mandated to shut down but trespassing restrictions are weakly enforced. In recent years, most companies have also allowed yemase miners to search for jade on their sites during daily breaktimes from 3am to 6am and from 4pm to 6pm.
Should yemase miners manage to cart off a big stone, perhaps through agreeing to share some of the profits with a backhoe driver, they may pool funds to have the stone cut and polished and attempt to sell it themselves, or sell it unwashed to a dealer.
Either scenario, however, is extremely rare. Usually, when yemase miners find valuable stones, soldiers or police arrive and immediately take them to the jade department, said Kai Ring, a yemase miner boss and jade broker. They might offer a yemase miner K5 million or K10 million ($3700-$7500) for the stone, she said, but with yemase workers unable to obtain formal permission to dig, they have little bargaining power and are often forced to accept the offer.
Some miners try to claim their own space on an expired company site or an unclaimed area, but this is also fraught with challenges. Freelance miners’ claims are not backed by law, and most sites have already been claimed by the powerful and well-connected.
“It’s hard to find a good and safe site. Only dangerous sites are available,” said Gum Jat, who has worked as a yemase miner since 2012. “Sites are marked as ‘VIP’ … If they tell us it is their place and we should move, we move.”
Lacking options, he has joined the masses that dig through the night on company sites.
A 27-year-old Hpakant native who spoke on condition of anonymity told Frontier that when he looked for a place to practice sluice mining, he was also confronted with landmarks for VIPs.
“If you touch it, no one can protect you. Those are their lands; we don’t know when or how they bought it,” he said.
The scarcity of viable sites, he added, is pushing miners into high-risk situations. “People died because they dared to search for jade in very dangerous areas. There are no good quality stones in the less dangerous mining areas,” he said.
Climbing the ladder
Hpakant’s jade industry also has countless intermediaries who broker and trade jade through informal channels. The township has four main jade markets, in the towns of Hpakant and Lone Khin and in Gwi Hka and Seng Tawng mining areas – known locally as maws – though smaller markets have cropped up in other maws. Brokers and sellers told Frontier that business is typically done in maws, markets and private homes, where high-level deals are more likely to occur. The cheapest sales, they said, are made at maws.
For yemase miners, being able to engage in the jade trade is an improvement for the lucky few who can save enough. “Brokering jade is a learning process. I became a broker because I don’t have enough money to buy [high quality] jade, and I am not skillful at judging the price,” said Naw Ja, 34, a broker who previously mined for 10 years. “Brokering jade is a step to climb high in life.”
Yet those who have been in the industry for decades say the fees brokers can take have slipped over the years from rates of 10 percent of a stone’s value – paid by both sellers and buyers – to 5pc or less, paid only by buyers, though brokers may receive an occasional bonus.
Others have taken to trading jade across the border with China. Patrick, a 27-year-old trader who was displaced by Kachin’s civil war in 2018, said he buys jade at maws and sends it in one or two-tonne bundles to the border town of Ruili – known in Burmese as Shweli – via a licensed carrier, who he pays about K3.4 million ($2,500) per tonne of jade sold. He then travels to broker centres in Ruili to manage sales through Bamar and Kachin brokers, who charge 20pc commission. These costs and fluctuating exchange rates make it hard to earn a profit, he said – especially during the COVID-19 pandemic, which has weakened the kyat against the yuan.
Lajawn Seng Tawng, an attorney, charity worker and widowed mother of four, regularly employs five to 10 miners from her late husband’s extended family, but says her main business is trading jade.
“I decided to enter the jade business that God has blessed upon our [Kachin] people to raise my children, and at the same time, to support our people,” she told Frontier. “We [Kachins] should all know how to check the jade that we have under our land and farms. We should know about buying and selling jade, how to distinguish between good and bad jade … We are living in the jade harvest land, so we should all know about jade.”
Seng Tawng comes from an influential family. Her father, Lajawn Tu Hkawng, was a member of the Amyotha Hluttaw during U Nu’s reign. He was so prominent in the jade industry that he had a hill in Hpakant named after him. Seng Tawng’s brother, Lajawn Ngan Seng, served as Kachin State Chief Minister from 2011 to 2016, under the military-aligned Union Solidarity and Development Party.
Yet despite her notable background and wealth – her late husband was also a jade businessman, and she owns properties in Yangon, Myitkyina and Hpakant – she said the stones are still being stolen out from under her and, more broadly, from Kachin people.
“Even if you sleep on a jade pillow, other people have come to dig the jade and make a business out of it,” she said. “In the past, all Kachin people had equal blessings as long as they worked hard, but right now, although people want to work hard, we don’t have a place to do it.”
“In this era of companies and machines, only business owners get more and more jade,” she said. “There is no way we can compete with the companies.”
The Extractive Industries Transparency Initiative, which Myanmar signed onto in 2014, estimated the value of jade and gems sold through government emporiums in 2017-18 at 825 million euros (about $1 billion), while 60pc to 80pc of gemstones produced in the country were sold through illicit channels, according to a 2016 study it commissioned. Kachin State was permitted to hold its first jade and gems emporium in Myitkyina in 2018, but sales of the most valuable classifications of jade are still relegated to emporiums in Mandalay and Nay Pyi Taw. The government charges 10pc on sales of jade through emporiums, but companies regularly undervalue sales, and the industry’s official tax revenues are but a small fraction of what they could be.
With the KIO having ceded significant territory in Hpakant decades ago, taxes it levies are one way it can still earn money from jade.
Those interviewed by Frontier described a range of fees that they have either paid themselves, know others who have paid, or have found to be common in Hpakant. Several spoke only on the condition of anonymity.
Miners on vacated company sites told Frontier they’re charged fees to claim spots, such as a strip of land on the edge of a tailings cliff, and to dig through the stones below. “Whoever comes, we have to give [taxes] if they claim the place as theirs. Sometimes, if both the KIO and Myanmar side come, we have to give to both,” said one yemase miner, though they did not specify whether by “Myanmar side” they meant the government, police or military.
If miners manage to sell a valuable stone independently, they say they must pay a “sales tax” of 10pc. “They don’t collect [taxes] if they don’t know. We have to pay if they find out, to any side,” another yemase miner told Frontier.
“If the KIO finds out you got a good one, they call you to their place. They ask you if it’s true that you sold jade for a certain amount, and you answer and pay the amount they set,” a yemase boss told Frontier. “If you can keep it a secret, you don’t have to pay … But mostly, you can’t keep secrets in the jade business.”
According to two people interviewed by Frontier, the KIO taxes those who buy expensive jade at Hpakant’s markets as well. “After you pay [the tax], they will give you a voucher and with that, you can buy jade,” said one broker.
The village administrator, who engages in jade deals in the K1-million to K10-million ($730-$7,300) range, told Frontier that he and other shareholders sometimes pay a sales tax to the KIO.
Pandemic price drop
COVID-19 restrictions and the economic downturn caused by the pandemic have also shaken Hpakant’s jade industry. Its markets closed in mid-March, and the Chinese border closed to all vehicles but cargo trucks on April 1. Chinese authorities have also restricted entry of Myanmar nationals into China, leaving drivers concerned about cargo safety.
“Since COVID-19 started, buyers from China stopped coming here, and people from here have not been able to go there either. The jade market has become as dry as if a dam closed,” said Lar Tong Sau Bawm.
With a ban on mass gatherings, police have been breaking up crowds gathering at the markets, said Khin Hpan Hpyi, a dealer and broker. “I tried to show jade where there were some people, but I had to run [to avoid police],” he told Frontier. “It’s very difficult to do business. It has been months without any income.”
Lajawn Seng Tawng said that stones are selling for about one-fifth to one-tenth their pre-pandemic prices, with miners hit hardest. “Before, bosses could help yemase miners by paying higher prices … But now, bosses are also struggling.”
Gum Jat said he is struggling to find buyers. “Although we [yemase miners] have found a few jade stones we want to sell, bosses don’t buy any unless they want one very much. They say, ‘It is difficult for us too. It will just be in vain if we buy it,’” he said. “Even if the jade is very good and they like it, they set the price very low.”
Yet the pandemic’s effects on the broader economy are still pushing some into the trade. Hpakant native Gam Maw, 26, a Baptist minister, began digging on a vacated mining site and dealing jade with friends during the pandemic.
“We are doing this not because we love it but because we have to do something for our living and our future. Mining is dangerous at all times, but we do this hoping something changes in our lives,” he said.