Gemstone Sector

An Overview of Gemstone Sector
AN OVERVIEW
OF
GEMSTONE SECTOR - PAKISTAN
Small and Medium Enterprise Development Authority
1
TABLE OF CONTENTS
1 SWOT ANALYSIS 4
1.1 STRENGHTS 4
1.2 WEAKNESSES 4
1.3 OPPORTUNITIES 4
1.4 THREATS 4
2 INTRODUCTION 5
3 MARKET ANALYSIS 7
3.1 INTERNATIONAL MARKET 7

3.2 PAKISTAN OVERVIEW 10
3.3 AVERAGE PRICES OF GEMSTONES 13
3.4 INTERNATIONAL MARKETS OF GEMSTONES 13
3.4.1 EMERALD 13
3.4.2 RUBY 13
3.4.3 PERIDOT 13
3.4.4 TOPAZ 13
3.4.5 TOURMALINE 14
3.4.6 AQUAMARINE 14
4 PAKISTAN’S GEMSTONES RESERVES 15
4.1 ESTIMATED RESERVES 17

4.2 AFGHANISTAN : AN OPPORTUNITY FOR PAKISTAN 17
5 GEMSTONE INDUSTRY OF PAKISTAN 18
5.1 MINING 18
CUTTING AND POLISHING 19
5.3 MARKETING 20
5.4 TECHNOLOGY 21
5.5 SKILLS 21
5.6 VALUE CHAIN ANALYSIS 23
6 POTENTIAL OF PAKISTAN'S GEMSTONES 25
7 MAJOR RECOMMENDATIONS FOR IMPROVING GEM INDUSTRY 29
2
8 ANNEXURE-1 PROPOSAL FOR SMALL SCALE MINING 31
9 ANNEXURE–2 GEM CITY CONCEPT 36
3
1 SWOT ANALYSIS
1.1 STRENGHTS
¨ Variety of gemstone resources

¨ High quality of gemstones
¨ Availability of low cost labour
¨ Ideal geographic location
1.2 WEAKNESSES
¨ Non recognition of gemstone as an industry by the government

¨ Lack of value addition
¨ Lack of marketing skills
¨ Lack of technical know-how
¨ Inconsistent supply of gemstones
¨ Smuggling/export of rough gemstones
¨ Ineffective legislative laws
¨ Lack of funds
¨ Imparting with obsolete methods and technologies
1.3 OPPORTUNITIES
¨ Availability of quality gemstones from Afghanistan

¨ Untapped international markets
¨ Availability of inexpensive trainers from India, Thailand & Sri Lanka
1.4 THREATS
¨ Competition from India, Thailand & China
¨ Established world markets-barrier to market entry
¨ Regulatory bottlenecks
¨ Lack of financial support from financial institutions
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2 INTRODUCTION
Gemstones have been used as symbols of beauty, wealth and status since prehistoric
times. Regardless of their long history gemstones have no single and precise definition
that is generally accepted. According to Webster's dictionary, a gem is any jewel
whether stone, pearl or the like, having value and beauty that are intrinsic and not
derived from its setting, a precious or semi-precious stone cut and polished for
ornament.
Gemstones have not only been a personal adornment for display of beauty and status
especially of the affluent class but have also played an important role in the economies
of many countries. Pakistan has huge deposits of fine varieties of gemstones, but
despite of this it has unable to capture the international market. Pakistan's present
official export of rough gemstones for the year 1997-98 is US $4.8 million. Major export
markets are USA, Hong Kong, Germany, U.K, France, UAE, India and Thailand.
Many of the developing countries are playing an important role in the supply side of the
markets. Internationally, Thailand is the largest supplier of rough, cut and semi-cut
gemstones followed by India, China and Hong Kong, which have become the centres
for value addition. Countries having extensive exports of gemstones have gone through
considerable efforts while coming to a steady platform. Investment friendly policies,
marketing, joint ventures and unity of associations with government organizations
towards one goal has lead them in the right direction.
Pakistan fortunately has wide variety of gemstones, but due to lack of realization of the
importance of gemstones sector and the role they can play in the national development,
it has not been able to exploit its full potential. It does not require massive investment or
long lead time hence volume and quality could be increased if more systematic
exploration and development is undertaken. The gemstone sector never grew as an
industry for various reasons but it has a phenomenal potential to become a billion-dollar
export business for Pakistan. Emerald of Mingora (Swat), Pink and Golden Topaz of
Katlang (Mardan) and Aquamarine of Chitral and Nelam Valley are well known for their
5
colour and clarity. But unfortunately, after so many years Pakistan exports still stands
with a share of only 0.31%.
Since 1978, gemstones business has been under the control of Gemstone Corporation
of Pakistan (GEMCP), which was under the administrative control of Ministry of
Petroleum & Natural Resources, responsible for exploration and mining of gemstones.
Besides, it was also responsible for regulating and managing the business of
gemstones, including auctioning and direct exports. But due to various reasons the all
the mines were closed down, bringing the trade to its lowest level, and ultimately
GEMCP was disbanded in 1993-94. It was only in the last three years the Emerald
mines at Mingora and Gujjar Killi, Ruby mines at Hunza and Nanji Mali, Topaz mine in
Mardan was auctioned to the private sector, due to which the exports had slightly picked
up.
Some of the major factors influencing the growth of gemstone sector are: lack of
appropriate skilled manpower, vested interest, illegal activity, regulatory framework,
technical and managerial know-how and financial support.
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3 MARKET ANALYSIS
3.1 INTERNATIONAL MARKET
The size and the scope of the world market for gemstones is difficult to estimate due to
non-availability of data. This is mainly because the industry is in the informal sector, and
most of the companies are family owned businesses. But despite of lack of proper data
on exports and imports, there are indirect signs that the worldwide gemstones market is
showing a declining trend since 1993.
Table1: World Gemstone Exports Trend
Export Trend US $ M
1993 1994 1995 1996 1997
World 2,240 2,227 2,140 1,707 1,557
Thailand 449 450 422 398 303
Switzerland 493 393 237 226 195
India 86 116 153 142 157
Colombia 403 424 455 179 141
Germany 196 192 209 176 139
U.K 73 75 78 82 77
Israel 45 56 73 82 72
Brazil 33 40 50 43 90
Australia 74 93 92 97 69
USA 57 56 63 51 65
Hong Kong 65 61 50 45 44
Source: ITC Data
Sharp decline in the international trade of coloured gemstones during 1996 was due to
the Asian economic crisis. Asia still being the hub of gemstones has strong influence on
the world trade. There is a constant shift in the global trade of gemstones due to rapid
change in the demand for shapes, cuts, colours and type of gemstone.
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Figure 1: World's Top Gemstone Exporters-1997
Hong Kong Others Thailand

3% 13% 19%
USA
4% Switzerland
Australia 13%
4%
Brazil
5%
Israel India
5% U.K Colombia 10%
6% Germany
9% 9%
Source: ITC Database
The world trade for coloured gemstone was US $1.56 billion in 1997, dominated by
Thailand, Switzerland and India, having market shares of 21, 14 and 11 percents
respectively.
Table 2: World Gemstone Import Trend
Import Trend US $ M
1993 1994 1995 1996 1997

World 2,567 2,554 2,470 2,342 2,179
USA 543 572 558 537 640
Switzerland 458 441 302 326 353
Japan 466 521 525 471 280
Hong Kong 231 239 289 237 205
U.K 78 57 62 68 138
Germany 107 109 99 90 90
Thailand 151 126 138 131 83
France 130 104 93 84 78
China 142 114 94 87 59
India 47 49 54 75
Source: ITC Data
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Out of the total imports of US $2.2 billion USA, Switzerland and Japan have the highest
shares of 28, 15 and 12 percent respectively.
The disparity between export and the import figures, as shown in the above exhibits, is
mainly due to misreporting and also gemstone data is not accounted for when used in
jewellery.
Figure 2: World' s Top Gemstone Importers 1997
China Others
India 3% 13% USA
France 3% 28%
3%
Thailand
4%
Germany
U.K Switzerland
4%
6% Hong Kong 15%
Japan
9% 12%
Leading countries like Thailand, India and China are dependent on imported raw
material, which mainly comes from countries like Myanmar, Russia, Brazil, Zambia,
Zimbabwe, Australia and even Pakistan. Despite of this they have emerged as global
giants, mainly due to support from their government and active participation of their
Associations. The biggest advantage they have is the availability of skilled but
inexpensive manpower. Also extensive efforts are concentrated towards marketing by
promoting local companies to participate in the international exhibitions. Their
governments also provides financial support to enable the local companies to exhibit
their products in international fairs, which are regularly held in India, Thailand, America,
Italy, etc. Their emphasis is also towards value addition, hence most of these countries
have banned the export of rough gemstones. Besides, these countries have the
comparative advantage due to available resources of certain varieties of gemstones.
Due to these factors leading gem related training institutions such as Institutes like
Gemological Institute of America (GIA), International Gemological Institute (IGI) and
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many other at government and private level have established their institutes in these
countries.
Figure 3: Top Asian Gemstone Exporting Countries

500 493 450 422
398
400
303
300
116 153 156
200 142
59 90 100
38 39
100 45 56 61 49
6 44 4 44 5
3 2
0
1993 1994 1995 1996 1997
THAILAND INDIA CHINA HONG KONG
The above mentioned graph of top Asian gemstone exporting countries shows the
dominance of Thailand as the largest exporting country, although showing a declining
trend but still holds the biggest market share. It is also regarded as the hub of
gemstones. India has also started emerging as the centre for value addition, and its
exports has grown consistently and has attained its position as the world third largest
exporter for coloured gemstones.
3.2 PAKISTAN OVERVIEW
Pakistan has emerged as the fifth frontier for the occurrence of gemstones on the world
map but it has been unable to penetrate the international market. The gemstone sector
never grew as an industry for various reasons but has a phenomenal potential to
become billion-dollar export industry for Pakistan.
Despite huge reserves of all the major gemstones, Pakistan's market share is only
0.31% of the total exports worldwide. The exports have declined from US $7.9 million in
1988-89 to US $4.8 million in 1997-98, a staggering decrease of 40% over the last 10
years. Although unofficial export value is much higher than the available official export
figures.
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Figure 4: World Vs Pakistan Gemstone Exports
2,500.0 2,240 2,227 2,140
2,000.0
1,567
1,309
1,500.0
1,000.0
500.0
5.5 2.6 2.0 4.1 4.8
0.0
1993 1994 1995 1996 1997
Pakistan World
The graph below shows an irregular export trend of Pakistani gemstones. Since 1978,
Figure 5: Pakistan Exports Trend
Source: Export Promotion Bureau
9
7.9 7.8
8
7
6
US$Million
5 4.4 4.8
5
4
3.8 3.4
2.9 2.6
3 2.2
2
1
0
1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98
gemstones business has been under the control of Gemstone Corporation of Pakistan
(GEMCP), which was under the administrative control of Ministry of Petroleum & Natural
Resources, responsible for exploration and mining of gemstones. Besides, it was also
responsible for regulating and managing the business of gemstones, including
auctioning and direct exports. But due to various reasons the all the mines were closed
down, bringing the trade to its lowest level, and ultimately GEMCP was disbanded in
11
1993-94. It was only in the last three years the Emerald mines at Mingora and Gujjar
Killi, Ruby mines at Hunza and Nanji Mali, Topaz mine in Mardan was auctioned to the
private sector, due to which
the exports had slightly picked Figure 6: Major Buyers of Pakistani Gemstone
up.
UAE India Thailand

3% 2% Others
4%
France 4% USA
4% 33%
U.K
5%
Germany
20% Hong Kong
25%
Source: Export Promotion Bureau
Pakistan’s present official export of rough gemstones for the year 1997-98 is US$4.8
million, with major markets being USA, Hong Kong, Germany and the United Kingdom
having 33, 25 and 5 percent market shares respectively.
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3.3 AVERAGE PRICES OF GEMSTONES
Table 3: Average Prices of Rough Gemstones
S to n e s P r i c e $ / Ca ra t P r i c es $/ k g
Emerald 150 750,000
Ruby 125 625,000
Period 20 100,000
Topaz 5 25,000
Aquamarine 10 50,000
Tourmaline 15 75,000
Garnet 0.02 100
3.4 INTERNATIONAL MARKETS OF GEMSTONES
3.4.1 EMERALD
Major markets for Emerald are USA, Southeast Asia and Japan.
3.4.2 RUBY
The markets for ruby are USA, Hong Kong, Canada, Singapore, Japan, Korea and the
European Union.
3.4.3 PERIDOT
The major markets for Peridot are USA, European Union, Germany and Japan
3.4.4 TOPAZ
The major markets for topaz are USA, European Union and Japan.
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3.4.5 TOURMALINE
The major markets for tourmaline are USA, Switzerland, Germany, Spain, France, Italy,
United Kingdom and the Far East.
3.4.6 AQUAMARINE
The major market for Aquamarine is Japan. Medium to high quality aquamarine are
saleable in Germany, Italy, Taiwan and different qualities were sold to the United
States.
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4 Pakistan’s Gemstones Reserves
Pakistan is fortunate to be strategically located close to some of the major markets such
as Thailand and Sri Lanka. Besides, it has one of the largest deposits of varieties of
gemstones, which are highly priced and demanded gemstones like emerald and ruby.
Important Gemstones found in Pakistan are:
Table 4: Location of Gemstone Mines
Stone Characteristics Location

Emerald Sea green, Mingora in Swat, Shamozi, Gujar Killi,
Charbagh, Makhad
Ruby Deep red Hunza Valley of the Gilgit Agency. Azad
Kashmir.
Topaz Deep Orange, Pale Chitral, Gilgit agency, Kalam. Katlang Ardan,
yellow, pink, Ghindao Hills.
colourless, blue,
violet coloured
crystals.
Aquamarine Sky blue to sea Shirgar Valley of Baltistan, Chitral, Kaghan,
green Neelam Valley of Azad Kashmir.
Garnet Blood red, purple, Dir, Swat, Quetta, Kalt division.
green
Lapis-lazuli Brilliant blue colour N.W.F.P.
with golden specks
Jade Red, brown, white, Gilgit, North West Province.
black.
Peridot Yellowish green Parla Sapat, Naran in Hazara Kohistan.
Tourmaline Black, blue, green, Gilgit.
pink, bright red,
rare golden yellow,
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bicolour,
tourmaline.
Zircon Silai Patti, near Malakand.
Pakistan has a potential yield of 800 thousand carats of ruby, 875 thousand carats of
emerald and 5 million carats of peridot, which lay unutilized.
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4.1 ESTIMATED RESERVES
Table 5: Reserves
Country Mines Stone Carats in millions
Pakistan Mingora Emerald 20-30

Gujar Killi 20-30
Shamazoi 20-30
Afghanistan Pansher 30-60
Kashmir Nangimali Ruby 100-200
Afghanistan Jagdalak 100-200
Pakistan Dassu Peridot 75-100
Source: Emerald Mining Company Report
4.2 AFGHANISTAN : AN OPPORTUNITY FOR PAKISTAN
Afghanistan has historically been well known for its lapis lazuli deposits. Significant
amounts of fine emerald, tourmaline, kunzite, and some rubies have also been
discovered in Afghanistan. Emerald comes primarily from the Panjshir Valley, northeast
of Kabul. Large deposits of green, blue, and pink tourmaline, kunzite and some
aquamarine are been mined from the Nuristan region, east of Panjshir. Smaller
quantities of fine ruby have been found in the Sorobi region, located between Jalalabad
and Kabul. Lesser amounts of garnet, amethyst, spinel, and morganite have also been
found. Peshawar is the main export outlet of all Afghani gemstones, mostly in form of
rough stones.
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5 Gemstone Industry of Pakistan
The gemstone industry of Pakistan is in a dismal state with no elements of quality &
standardization. The sector, which had initially attracted world attention, has been
rendered dormant and unproductive due to lack of any effective government policies. It
is difficult to comprehend that in the absence of any government policy such an
important segment of the industry would contribute usefully towards the development of
the economy. Some of the major problems of the industry are:
¨ Non recognition of gemstone sector as an industry by the government

¨ Lack of effective regulatory and institutional framework
¨ Imparting with obsolete methods and technologies
¨ Lack of proper infrastructure at mining sites
¨ Non availability of skilled labour
¨ No training institution
¨ Smuggling of gemstones
¨ No financial support
¨ Lack of marketing skills
5.1 MINING
Mining is an important but most primitive and unorganized segment of the gemstone
industry. This is mainly due to the lack of proper infrastructure, poor mining laws, lack of
technical know-how and most importantly due to non-availability of funds. The mining
methods being presently employed by them bears high wastage of gems, mainly
because of uncontrolled blasting with dynamite and the hammering processes to
separate gem from the rock, which tends to damage the gemstone.
The present mining rules of Pakistan provides too much authority to the government
mining agencies, which is being misused creating hurdles for the mine owners. This has
lead to the closure of many private leased mines.
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5.2 CUTTING AND POLISHING
Gem cutting and polishing exists on a very limited scale in Pakistan, which is mostly
being done on individual basis or at a cottage level. Presently, there are approximately
30,000 people involved in this trade in Pakistan, amongst which most of them are
exporters of rough gemstones. There are about 500 units involved in cutting and
polishing, on average employing 3 persons per unit. Most of the gemstone dealers and
processors are located in Peshawar, Lahore and Karachi. The cutting and polishing
done in Namak Mandi in Peshawar and Suha Bazar of Lahore is of very low quality. It is
all done manually using old and obsolete machines, which are locally developed. In
Export Processing Zone (EPZ), Sadder Karachi, the cutting and polishing is being done
on a very small scale but the standard is much higher.
Most of these skilled artisans involved in the gemstone business are descendants of
Jaipur, Indian origin, who have migrated to Pakistan have set-up their shops/units in
Karachi, Lahore and Peshawar. They train their children and grand children, and thus
the expertise remained within the family. The skill level of these crafts man depends
entirely on their experience. These local craftsmen are unaware of latest technologies
and international accepted quality standards. The number of craftsman has started
declining, as they were unable to cope with the technological advancement of the other
developed countries. The younger generation, seeing no future in this trade has started
opting for other lucrative professions. As a result the number of expertise in this field
has been declining with the passage of time. Those who are still associated with this
trade are unaware of international markets, nor they have the capacity to produce
quality products to compete in the international market. This has resulted in low
productivity and monotonous designs, which does not have any demand in the world
market. Consequently 90% of our gem rocks are exported in the form of rough at
throwaway prices thereby causing loss to the exchequer in the form of revenue from
value added products.
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5.3 MARKETING
Marketing has played an important role in the promotion of gemstones business in the
leading gemstone exporting countries like India, Thailand and Sri Lanka. They were
able to enhance exports through aggressive marketing efforts such as holding
exhibitions in their country and also exhibiting their work in the international exhibitions.
One of the major reasons for their growth in exports was due to strong government
support. Private companies have also actively promoted their products through various
modes such as by developing web sites, collaboration with international companies, etc.
Unfortunately, gemstone trade has been a neglected sector in Pakistan. No efforts
either from the government or on private basis has been made to enhance the growth of
gemstone business. There is an absence of a price regulatory system where the prices
of Pakistani stones could be ascertained. As most of our stones are smuggled out of the
country and in rough form so the concept of branding has never evolved. Pakistan does
not have any overseas marketing network, nor have any collaboration with international
companies like International Coloured Stones Associations (ICA) or Gemology Institute
of America (GIA) via which stones could be marketed. The Pakistani government has
never given any assistance or incentives to the exporters to participate in the
international fairs. Due to the political instability and the general law and order situation,
no foreign collaboration or joint ventures have taken place. As more than 75 percent of
our gemstone exports are done unofficially, thus the recognition of the origin of the
gemstone gets lost. However, emeralds of Swat, Rubies and Sapphires of Kashmir are
extremely famous throughout the world.
Marketing of gemstones is extremely important in order to create awareness. It is due to

the lack of marketing efforts that Pakistan's potential of gemstones could not be
advocated in the international market due to which the market share remained at low
level. Internet is being widely used as mode for marketing, which is still at its infancy
stage in Pakistan. Export Promotion Bureau (EPB) is in process of developing a website
on gemstones. Moreover it is hardly being used by the private sector in the gemstone
sector, as the people who are involved in this trade are mostly uneducated. Participating
in exhibitions and fairs is most common marketing tool, which is still the most effective
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medium of selling. Pakistan, as mentioned earlier, holds only one exhibition annually in
Peshawar, which even does not meet the international standards, as such does not
attract any international buyers.
5.4 TECHNOLOGY
Technology for extraction, handling and processing of gemstones is still being carried
out on conventional methods. Uncontrolled blasting and open pit mining techniques are
mostly used in mining of gemstones. No evaluation or prospecting of mines is done
before they are leased out. In gemstone mining, due to the physical nature of
gemstones and the ability to bear shock from the blast demands suitable mining
methods. The mining technique to be employed depends upon the type of mineral
deposit, geology of the gem-bearing rocks, infrastructure, equipment and the availability
of labour. One way of enhancing technological level is through joint venture
arrangements with international companies who specialize in this field. It also provides
an opportunity as a source of regular supply of the gemstones.
The different techniques used for gemstone mining is the use of other non- explosive
techniques such as diamond wire cutting for gems embedded marble rocks, chemical
wedge and hydraulic wedge may be employed in exploration and mining of the gem-
bearing deposits. Other modern mining techniques such as driving short tunnels into the
sides of hills (mining ruby, sapphire in Mayanmar and emerald in Colombia.), open cast
mining, using powerful water to loosen gem material from the overburden are commonly
used in mining gemstones internationally. Underground mining method is also done in
certain countries.
5.5 SKILLS
One of the major causes of lack of growth in gemstone sector is non-availability of

skilled manpower. This is the main reason that rough gemstones are smuggled out of
Pakistan and are sold at throw-away prices. The sub-standard cutting and polishing
being done is totally for local consumption, which are mainly used in jewellery. The
reason for not developing skills because there is no institute imparting with training in
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gemstones in Pakistan. Many proposals and feasibilities for establishing training

institutions have been carried out but none have been formalized. Even funds for the
establishment of gemmology institutes in Peshawar has been approved but has not
been implemented.
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5.6 VALUE CHAIN ANALYSIS
Current
Current Current Current
Pre-Mining Proposed Cutting & Proposed
Proposed Mining Polishing Marketing Proposed
Obsolete 1976 Obsolete Mining Modernize Obsolete Tools & Semi-Automated Domestic Target International
Mining Rules Revision Methods Mining Methods Equipment Modern Market Target Market
Machinery
Poor Existing Inexperienced Management Low Quality High Quality Non Availability Of Availability Of
Mining Lease Revision Management Training Production Production Lockers At Lockers At
Laws Airports Airports
Existing Mining Implementation Untrained Labour Training of Labor Low Volume High Volume Local Gem Fairs International
Policy Production Production Gems Fairs
Ineffective Obsolete Modern High Cost Per Low Cost Per No Government Government
Legislation on Revision Machinery & Machinery & Unit Unit Assistance Assistance-EPB
Theft Equipment Equipment
Ineffective Improve Law Manual Mechanized No Financial Financial Support

Existing Enforcement Processing Processing Support
Enforcement
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Laws
Inadequate Improve Security

Security
Low Volume High Volume

Production Production
High per cost unit Low cost per unit
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6 Potential of Pakistan's Gemstones
There is no doubt that Pakistan has an enormous potential to increase its exports
manifolds, and could become one of the major players in the billion dollar world market.
Pakistan is fortunate to be strategically located close to some of the major markets such
as Thailand and Sri Lanka. Besides, it has one of the largest deposits of varieties of
gemstones, which are highly priced and demanded gemstones like emerald and ruby.
Emerald of Mingora, pink and golden topaz of Mardan and aquamarine are well known
for their colour and clarity. Peshawar is the most important export outlet for gems.
Recently, the war in Afghanistan has enhanced Peshawar’s export business and helped
preserve its importance as a gem trading market. Most precious stones, which were
previously being exported from Kabul, are now believed to be going through Peshawar.
In spite of the negative portrayal of the area in the world media, most rough gemstones
of Pakistan and Afghanistan are traded in Peshawar by the international buyers, which
are cut and polished overseas and are sold at enormous prices.
Estimated Reserves
Table 6: Estimated Reserves
Country Mines Stone Carats in millions US$/Carat Value in US$ Millions

(Rough)
Pakistan Mingora Emerald 20-30 10 600-900
Gujar Killi 20-30 10 600-900
Shaozai 20-30 10 600-900
Afghanistan Pansher 30-60 20 600-1,200
Kashmir Nangimali Ruby 100-200 2 200-400
Afghanistan Jagdalak 100-200 2 200-400
Pakistan Dassu Peridot 75-100 5 375-500
In Pakistan, emerald deposits are in a 70- kilometre belt from Shamozai to Alpuri
Shangala area. The main producing mines are located at Shamozai, Mingora,
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Charbagh and Makhand in the Swat district and Gujar Killi in the Shangla district. Swat
has some of the finest emeralds, which could be compared with the Colombian
emeralds. The reserves of Mingora are estimated between 1.6 million to 2.0 million
carats of gem quality material as surface deposit extrapolated upto a depth of 90
metres. If underground mining is employed the deposit will easily exceed 20-30 million
carats. The reserves of Shamazoi and Gujjar killi are similar to that of Mingora. Thus a
reserve estimate of 60 - 90 million carats for the swat area is possible.
Proper mine development at these points is likely to increase production manifold.

Rough is mainly from 8 carats to 10 carats. Best quality crystals are from 3 carats to 5
carats. Polished stones below 1 carat have good colour and clarity while larger stones
have a darker colour that is not attractive.
The gem quality material of out of the mine varies between 5% to 10%, which is
considered excellent. Therefore, there is a great potential for enhancing emerald
production in Pakistan. This can be done by increasing production from Mingora,
Gujarkili and Shamozai and by bringing new mines under production particularly of the
Mimola and Mor Darra region (Barang) of Bajaur Agency. Attempts should also be
made to discover potential emerald deposits in the 150 km long “Emerald Belt” between
the Indus and the Mohammed Agency
A major deposit at Nagimali (Kashmir) has been partially developed with cooperation
between the UN and the Azad Kashmir Mineral Industrial Development Corporation with
estimated reserve potential of 200 million carats. The Kashmir rubies are known for their
colour and quality and have an established international market. Hunza is another
medium sized deposit, which is known to be the second other region in the world that
has produced “blood red” ruby after Burma. Hunza ruby belt is reportedly 100 km long
and only a small part have been explored. The prospects for developing larger and
better gemstones is good, subject to further exploration.
Pink topaz of Katlang (Mardan) is a unique stone unparalleled in the world. Pink topaz is
only found in Pakistan and Brazil but the rich coloured pink stone is found only in
Pakistan. If aggressively promoted in the world market, this gemstone can prove to be a
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great foreign exchange earner for the country. Presently explored deposit is small, but
there is credible geological evidence for more deposits. This gemstone promises a real
bright future for the gemstone industry of Pakistan.
Gem-quality Peridot was discovered in Pakistan in 1994 in the Kohistan district, with
mineralization in a 20-square-kilometre area. This deposit has been exploited by the
locals and also has an established international market. The reserves estimate about
75-100 million carats.
Table 7: Projected Yield of Gemstone
Stones Est Yield Finished Int'l Value in $ Mn V.addition %

Kg/yr % Product Kg/yr Price$/kg
Emerald 500 35 175 750,000 131 80
Ruby 800 20 160 625,000 100 50-80
Peridot 7500 20 1,500 100,000 100 50-70
Topaz 5000 20 1,000 25,000 25 70
Aquamarine 2000 20 400 50,000 20 40-50
Tourmaine 2000 20 400 75,000 30 40-50
Garnet 500000 10 50,000 100 5 15-20
The existing gemstone mines and potential deposits could be developed in the next ten
years to make Pakistan a major player in the world markets, comparable to Columbia,
Brazil, Zimbabwe, Zambia and Kenya. The above table shows that by the development
of new mines and activating the existing ones the above estimated targets per year are
achievable. After sorting and cleaning, the yield of emerald, ruby, period, topaz,
aquamarine, tourmaline and garnets is 35%, 20%, 20%, 20%, 20%, 20% and 10%
respectively could be attained. This development would ensure a regular supply of
rough gemstones to the cutting and polishing industry for value addition. The emerald
occurrence is unique in terms of colour, clarity and hardness, which when cut and
polished properly fetches very high price. Small size emeralds are primarily used by the
watch industry and fine jewellery manufacturers in USA and Europe. The major
27
potential markets for Pakistan are USA, Hong Kong, Germany, U.K, France, UAE, India
and Thailand.
Official and unofficial exports of gemstones from Pakistan, Kashmir, and Afghanistan
are estimated to be around US$ 20~25 million per annum during the last five years.
Thus going towards value-addition and curbing the parallel exports Pakistan could
benefit from this loss of revenue. There is a need to increase not only the quantity of
gemstones but also the quality. This is one of the major causes where Pakistan has
been unable to make any impact on the international market. This can be achieved by
developing cutting and polishing industry in Pakistan.
28
7 Major Recommendations for Improving Gem Industry
1. Gem sector should be given the status of an industry.
2. Due to the existing mining rules and lease laws most of the mines are closed.
The mining rules of 1976 and existing lease agreements for prospecting,
exploration and mining need revision, which should protect and encourage
private investors. A separate mining policy for gem industry needs to be
formulated. (Attached in Annexure 1)
3. The legal and institutional set-up at the federal and provincial level require
revamping in order to create a conducive environment for private sector to invest
in gem sector. The district administration should effectively enforce law and order
situation at the mines.
4. Due to lack of appropriate machinery and equipment the cutting and polishing
industry has been unable to produce quality gems for exports. To make it
affordable so that there is diffusion of modern technology in the industry, duty
free import of machinery/equipment for gem mining, cutting and polishing and
jewellery manufacturing should be allowed.
5. One of the main constraints is lack of skilled manpower, hence there is a need to
establish training institutes imparting with training in both mining and processing
areas. Funds (EDF funds) should be allocated for the establishment of training
institutes at Peshawar and Karachi. Inexpensive master trainers should be invited
from Thailand, and/or Sri Lanka.
6. EPB should strongly support and promote this sector through various promotional
modes such as encouraging private companies to participate in the international
exhibitions. EPB should share the cost with the participating private sector
companies. Display centres for gems should also be established in various
countries.
7. Concept proposal of Art and Trade Centre equipped with modern facilities for
gems showrooms, lapidaries and offices of banks, airlines, customs, SMEDA,
29
EPB and trade associations for faster and convenient exports processing with
adequate security arrangements has been agreed by government. The local
gemstone industry is expected to get a major boost for value addition and exports
enhancement, from the completion of this project.
8. An overriding factor affecting various components of the development plan will be

the influence and participation of Afghans with raw material, entrepreneurial and
technical skills.
9. Locker and safe deposit facilities for gemstones should be provided at the airport
and in the airplanes so that security concerns of exporters are solved.
10. Establishments of gemstone exhibition/display centers in foreign target markets.

Such centers can play a pivotal role in promoting awareness and demand of
Pakistani gemstones, as well as keeping the local exporters updated with the
latest international trends in the field of gems marketing.
11. Export of rough gemstone should be discouraged through various incentive

measures, such as provision of export refinance facility, tax holiday to cut and
polished gem exporter.
12. Facilitation and encouragement of E-commerce marketing of local gemstones.

Proposals such as establishing an electronic exchange with listing of gemstones
of local dealers, promotion of salient features of Pakistani gemstone resources on
internet etc can be considered for export development of gemstones.
13. Capital financing should be provided to the investors for the gemstone mining
and processing industry.
14. Joint venture arrangements should be encouraged both in the mining and
processing industry.
30
8 Annexure-1 Proposal for Small Scale Mining
1. Government of NWFP may announce incentive package for local prospectors,

promoters and miners who will be granted mining permit for the open area n first
come first serve basis if the interested party/person provides authenticated proofs
of occurrence of specified gemstones in that particular area. The provincial
Government will lay down specific procedure to facilitate the investors in further
exploration and mining.
2. Permit may be valid for three years with 2% royalty, which would be extendable
for another term of two years with royalty terms up to 10%, based on the
performance of the miner. All payments would be subject to deferred receipts of
sale.
3. Entrepreneurs will be facilitated through SDA for advice and technical service in
addition to the provision of basic machinery and equipment on nominal rent.
Experts from private sector on the panel of DIMD will be available for the
preparation of Geological Maps, delineation of Mineralized Zones and
preparation of Mine Development Plan, if desired by the promoter.
4. There shall be no fee for granting permit. However, security deposits of Rs

50,000 will be levied payment.
5. Soft-term loans, up to Rs 500,000/- will be facilitated to the miner for machinery

equipment and Rs 100,000 for development, after the mine is physically verified
by the panel of Technical Experts.
6. The government of NWFP will develop mine geological maps for auction of lease
with in three years.
7. The mine auction after three years will give the first right of refusal to miner on
the terms and conditions as suggested by the panel of experts.
8. If the mine owners/promoters want to bring external equity, the same will be
facilitated through joint venture agreement within the first three years of no
31
additional cost. However, security amount will be increased by Rs 50,000 lump

sum.
9. The provincial government through civil administration will provide all local
facilitation and mine site security. Police check post may also be approved.
10. Royalty payments of 2% for the three years and 10% in next two years will
provide local development funds.
PROPOSAL SENT TO THE MINERAL WING (ISLAMABAD)
SMEDA's specific comments on the proposed strategy of mining cutting, polishing

and marketing of gemstones by Ministry of Petroleum and Natural Resources
Islamabad (Mineral Wing) are as follows:
1. Production coming through mining is difficult to be documented in an atmosphere

of distrust and fear. First of all mining operations are to be encouraged through
more focused and transparent mining regulation coupled with stream lining
functions of work and regulatory authority. Similarly, evolution of mechanism to
persuade local communities and concerned civil administration departments to
join hands for promotion and facilitation of legal mining is imperative.
2. Illegal mining is very difficult to be stopped until and unless the promising areas
are thoroughly explored and deposits are evaluated leading to preparation of
auctionable packages and readily given to private sector for exploitation through
public ads. For registering and documenting small and undocumented deposits
as suggested briefly by Mineral Wing, local investors and prospectors should be
given formal lease with minimum hassle for at least three years preferably merely
by registering a claim with local administration. Which should get gratis official
technical support from development agencies alongwith recommendations for
financial/banks support. During which period regular exploration and
documentation is carried out with assurance for local prospector to gain from the
eventual mining proceeds (or royalty) in addition to re-deploying the proceeds for
mineral and social development in that area.
32
3. Reasons for closed gem mines are to be urgently analyzed for resolution and
reactivation so as to minimize chances of trespassing. Provision and facilitation of
all technical and administrative support has to be mandatory for all. Government
of NWFP has taken very positive step in this direction and constituted a gem
mining committee (copy enclosed) comprising of members from public and
private sector organizations/associations (copy of notification and agenda for its
first meeting is enclosed). This committee will work on the pertinent issues as per
its TOR. It is recommended that Federal and other Provincial Governments
should also constitute mining committees with private sector representation for
the areas falling in their domain in lines with Government of NWFP notification.
4. Gem Mining Committee as proposed above is empowered to look into the matter
of closed gem mines and work out the core issues in consultation with the
licensing authority and leaseholder. The committee is required to submit its
recommendations in stipulated period for an early resumption of mining activities
including the support and intervention required from public sector. Delays could
be avoided by holding the secretariat responsible for this. Similarly, cases
pending in the court of law would also be taken up through request to the learned
court for decision on priority basis so as to reactivate gem-mining activities in the
larger public interest and reduce illegal mining. Additionally staff of the concerned
Directorate and Inspectorate is required to be deputed to monitor activities of
various mining companies under intimation to Gem Mining Committee on regular
periodic basis.
5. Every lessee is required to submit a work plan for mining, leaseholders should be
guided and supported in the implementation of approved plan through public
sector organizations and/or authorized consultants. Public sector support or
banking consortia can play a vital role for establishment of machinery pool in
promising mineral areas for support to private sector in this regard.
6. Measures are required to be under taken to encourage the local investors and
prospectors to adopt scientific mining methods in order to save valuable precious
stones from damage.
33
7. Documentation and legalisation of gemstone exports can be encouraged by

facilitating exporters similar to the way banks have been granted Rs 2 per $ of
funds transferred with positive results as being proposed by SMEDA
8. Amendments in the text of existing mining rules with specifically focused chapters
on different minerals giving them more development rather than control
particularly for gemstones would be carried out through GMC as per terms of
reference of the committee. This similar approach may be adopted for other
minerals also.
9. GSP and provincial organization like SDA/BDA/Punjmin/AKMIDC/LCDC doing

similar or complementary work should coordinate with each other for the geo-
data generation for gemstone bearing areas and commercialization of this data
can bring about financial autonomy as well as substantial investment for the
sector. While GSP has technical expertise and most of the data, a small amount
of coordination and strengthening of SDA/BDA/Punjab/AKMDC/LCDC towards
developing "alienated mining packages" could set the ball rolling.
10. Techno-commercial studies for evaluation of gemstone deposits could be carried

out by private sector consultants and renowned technical experts in collaboration
with GSP, PMDC & SDA etc, as identified by GMC and put up on web sites for
promotion.
11. Notification of mineral bearing areas as proposed by SMEDA will help a lot in
supplying and regulating the mining activities and socioeconomic development in
the concerned areas.
12. Establishment of Gems and gemological Institute at Peshawar is under process.

This institute will help to raise the Pakistan Indistry through better identification
and evaluation and improve our processing industry on scientific lines. Some
similar support in Mingora for gem mining, identification and evaluation will be
useful. This institute is needed to be affiliated with world-renowned institutions
like GIA of USA or FGA of England etc.
13. Auction or lease criteria for the established and documented gem mines/deposits
as suggested by ministry is expected to bear results. However, provision of
34
technical expertise and induction of relevant technology is to be optimised

through panels of experts and machinery pool in the private sector. The panels
need to be approved with appropriate checks by GMC (Representing mine
owners association and regulatory authorities).
14. Starting Gems Sale Centres owned by provincial government are highly
recommended and these should be able to accommodate a number of private
showrooms as well in different cities like Islamabad, Lahore and Karachi. A
complete plan for similar trade centre in Peshawar is annexed. These trade
centres would also act as incubators for new lapidaries located with in or close
by.
15. A focused and targeted effort for export promotion of gems is needed, most of
which has been covered by GSP theme paper. However, it is recommended that
working in tandem with EPB one could develop a private sector "Gem Export
Council" (representing, miners, processor and more of exporters) guiding and
holding accountable the efforts dedicated staff within or drawn from EPB.
35
9 Annexure–2 GEM CITY CONCEPT
After analyzing the present situation of Pakistan, the need of a Gem City becomes
very necessary. To give Pakistan a right direction, a Gem City is the need of the
hour. Functioning the Gem City properly would not only enhance exports but would
also make Pakistan's name appear on the world map. Gem City would be a one-
window operation where all facilities such as training, manufacturing, display,
marketing, technological and export will be under one roof. The Gem city would not
only be a one stop facility but would be a place where exporters and other interested
people would get all the relevant information relating to the world gemstone field.
Buyers as well as sellers would be able to interact with each other. People will not be
reluctant to buy stones as all gemstones would be certified by the gem-testing
laboratory to be set-up in the same vicinity. Being a hub for the gemstones
entrepreneurs willing to start their own units will be able to easily get space on rental
basis along with ample availability of skilled people coming out of the training school
or the commercial unit. Display centers as well as manufacturing units for exporters
to come give orders for cutting and polishing will not only promote the SME sector
but would also enhance exports of the value added segment of gemstone. Besides
all functions, the Gem City would be a great attraction for tourists and foreign
agencies.
FUNDING OF THE GEM CITY
The proposed Gem City will be a government cum private centre. Being something
new in Pakistan it would require funds for the first couple of years for it to run
smoothly. Pakistan having lack of the technological know-how will require in the
earlier phase to bring in teachers, machinery from abroad. In the latter phases more
and more local teachers will be trained and spare parts and even new machinery
could be produced by reverse engineering as the demand of gemstone processing
will grow. For the working capital of this project following options could be taken into
consideration:
1. Private investor
2. Export Development Fund (EDF)
36
3. Donor agencies
The lease of the land and the construction of the building, import of machinery and
other fund for the running of different operations could be done by the EDF funds
while the consultants could be brought in by the donor agencies.
TARGET AUDIENCE
The target audience for the Gem City will be

q Gem Professionals
q Gem lovers
q Jewellers
q Customs
q Government Officials
q Labours
The Gem City would benefit the gem lovers, gem professionals and jewellers in a
way that people who cannot afford to go abroad would be able to avail the state-of
art facility in Pakistan. Our customs and other government offices have no
background in gemstones appraisal due to which they cannot judge the value to the
gemstones being exported. Formal training could be provided to them so that under
invoicing does not take place.
Location
The location for the Gem City is proposed to be Karachi. The following advantages
make it most suitable:
Karachi is an established market for both gems and jewellery and therefore has lots
of traders and miners coming in for the supply of gemstones. Having ample of semi-
skilled people knowing the art of cutting and polishing also gives Karachi an edge
over other cities. Other than the labours there are a lot of people who are graduates
from the Gemological Institute of America. Being near the port it will be easy for the
importation of imported machinery and gems if required. Other than a lot of
advantages the drawback in Karachi is the lack of law and order in some areas,
therefore it is necessity to choose an appropriate area which is near the city, has
adequate security and easy access to transport.
37
The Gem City being a hub for the coloured gemstones is proposed to be some
where inside the city rather than in far-fetched areas. Privately bought land in
Karachi is fairly expensive, thus it is recommended to buy government land near the
airport on a 30 years lease basis. This would automatically bring down the cost of
this project. A 10-kannal area is proposed for the gem City. The government land in
the Karachi city is under the Karachi Development Authority (KDA) and Malir
Development Authority (MDA) caters for government land near the airport
38
GEM CITY LAYOUT
Training Institute Other

Other
nctions
Functions
Gem Cutting Gem Identification

Commercial Gem Cutting
Commercial Lab
Career Prospects
Commercial Units
Display Centres
Exhibition/Auction Hall
Marketing
Commercial Workshop/Lab
Own Unit
Absorption in the industry
39
FACILITIES OF THE GEM CITY
Gem City as mentioned earlier would be a one-roof stop over, thus the working of
this revolutionary idea will be as follows:
Ø Training Centre
Ø Manufacturing Centre
Ø Display Centre
Ø Marketing Centre
Training Centre
The training centre will be have two areas
1. Gems cutting and polishing institute
2. Gem testing institute
Gems Cutting and Polishing Institute
Gems cutting and polishing institute will be the centre where different courses
regarding cutting and polishing will be catered to all level. The diploma course would
be for people who want to learn in-dept the different sort of cuts, faceting, cabochon
and polishing. Certificate courses would be for beginners to learn in general the
basis of cutting and polishing along with learning with practical lab classes and
videos. Short courses would cater for those who have gone through with the
certificate or the diploma course. There will also be other technical and marketing
short courses, which would teach the technicalities of the different machines and
slight on the different markets and how gemstone marketing is done.
Cutting and polishing Duration

Diploma courses Video Tape 1 years
Certificate Course (Beg) with video 3 ½ months
Short courses (adv) with video
tape
Sawing 15 days
Cutting 15 days
Polishing 15 days
Grinding 15 days
40
Cabochon 15 days
Engraving or Carving 15 days
Faceting 15 days
Technical Short Course 1 month

Marketing Short Course 1 month
Gem Testing Laboratory
The gem-testing laboratory will be a breakthrough in Pakistan's history. For the first
time ever there will a place where gem testing, certification and gem grading will be
taught. The same level of courses will be taught as in the cutting institute. There will
be also diploma courses, general certification courses for beginners and advance
short courses. Videotapes will be an aid for students to grasp things quickly.
Gem Identification Duration

Diploma Courses 1 year
Certificate Courses (General) 3- 1/2 months
Short Courses (Adv) with video tape
Emerald Identification 15 days
Ruby Identification 15 days
Period Identification 15 days
Topaz Identification 15 days
Aquamarine & Tourmaline 15 days
Identification
Coloured Stone Grading 15 days
41
The above certificates are of the Indian gems and jewellery institute and the
International Gemological Institute.
A gem-testing laboratory has become a very essential part of the gemstone trade.
Gemstone trading is not simple as it was. Earlier, the trade functional purely on
personal experiences and trust. Increased awareness about the types of gemstones
available in the market, the advent of numerous entrepreneur and the technological
advances in the field of synthetics and gem enhancement has completely changed
the traders attitudes to business. Today, even an experienced jeweller has to be
more careful while buying and selling stones. A gem testing laboratory in the Gem
City will not only set a standard for comparison of quality and price but would also
insure people for the money they are paying for gemstones. A certified gem from the
laboratory would not only have a resale value but would also stop people from being
cheated.
The people coming out from the institutions would have three career prospects:
1. The students would either set-up their own units or
2. Get hired by the commercial workshops and laboratory or
3. Get absorbed in the industry
Manufacturing Centre
The manufacturing centre of the Gem City would constitute of a commercial

workshop owned by the Gem City itself. Cutting and polishing will be done on a
regular basis for export purposes and for specific orders from other exporters. A
lapidary of 10 people would be established in the begining. A commercial gem-
testing lab would also be a part of the manufacturing centre where by charging on a
per caratage basis gems would be tested and certified. Other than these self owned
workshops there will also be rental space for people who wish to start their own
small set-up for cutting and polishing.
As an approximation:
Per carat charge for cutting and polishing:
Precious stones Rs.75/carat
42
Semi-precious stones Rs. 35/carat
Gem identification Rs. 350/carat
Rent per shop Rs. 300 /sq ft
Detailed financial calculations will be in the other section
Display Centre
The display centre will constitute of shops given to individuals on rental basis for the
display of gems, jewellery and machine manufacturers involved in the gemstone
business. They will also be an exhibition cum auction hall where regular exhibitions
on small as well as large scale would be held.
Marketing
Marketing is one of the most important departments of the Gem City. Gemstone is
such a field where extensive marketing is necessary. The marketing department of
the Gem City would not only handle clients, and conduct proper research of the
global scenario and trends but would also be responsible for extensive
advertisement of the Gem City itself. Being a new venture in Pakistan unless and
until proper marketing via Internet and other media is not done people around the
world would not be able to become aware of it. It is due to the marketing department
that Pakistan and its potential and credibility in the gemstone field would be
recognized and acknowledged.
Machines
The Gem City being a state of art set-up will need a mixture of manual and semi-
automatic machines. This mixture is important for the up-gradation of the skill level of
the labour. Manual machines will be required in the institution during the learning
phase. The commercial workshop should have both, the manual as well as semi-
automatic machinery. In the later stage once this industry gets started would there
be a need for automatic machines.
Consultants/Instructors
The Gem City being a revolutionary venture in Pakistan would in the beginning need
consultants who would come for a month or two and regulate the working of the Gem
43
City. The foreign machinery manufacturers who will install machinery in the Gem City
would send in their consultants who would formulate a course outline and teach the
technical aspect of the machines as well as the cutting and polishing of different
stones. These consultants would in a month or two train a couple of people who
have background in the gemstone field and the trained people then would decimate
information further. Latter on if felt necessary good cutters could be brought in from
India and Sri Lanka till the time the people get familiarize with the machines and the
international demands.
Supply of Gemstone
The supply of gemstones is one of the most crucial parts, which has to be organized.
As mentioned earlier that there is an inconsistent supply of gemstones from the
mines. To properly regulate the production of the Gem City it is necessary to
Afghanistan, Sri Lanka, Myanmar,

Cambodia, Vietnam, Australia, Brazil,
Zambia, Zimbabwe
Local Imported
Gemstones Gemstones
Processing
Value added
Exports
organize the mining sector and have regular traders who would consistently supply
gemstones. Other than our local supply the import of gemstones should be allowed.
Most of the countries import gemstones from various countries. As Pakistan is
located in such a feasible location thus importing gemstones from Afghanistan,
Russia, Vietnam, Myanmar, Sri Lanka and China. The flourishing value addition
sector in the Gem City would compensate for the dollars spent on imports. The
gemstones to be processed in the Gem City would constitute of emeralds, ruby,
44
topaz, tourmaline, aquamarine and peridot. All these above-mentioned stones are
easily available in Pakistan in sufficient amount.
ORGANIZATION OF MANAGEMENT
The management structure of the Gem City will be as follows:
Board of Directors
The Gem City would have 10 people as the board of directors. They will be 4 from
the government and 6 from the private sector.
Managing Director
The managing director of the Gem City will be the owner of the Gem City. He will
also be in the board of directors and responsible for making all strategic decisions in
coordination with heads of all departments. The Gem City project if funded by the
EDF and from donor agencies could then have a private or a government person as
the managing director.
Training Centre
The training centre would include a principal/dean who will be responsible for all the
functions taking place in the training centre. Under him will be 1 incharge for the
testing institute and 1 for the cutting and polishing institute. In the beginning these
incharge would be the consultants would come for a short while to train the other
teachers. Under both the incharges will be three teachers each. They will also be two
lab assistants, one for the gem testing and the other for the cutting and polishing.
There will other incharge for the technical, computer, library and admissions. The
technical and the computer incharge will have assistants under them.
Business Development Centre
The business centre would also have a business development head responsible for
all marketing activities. The incharge for both the gem cutting and gem testing will
report to the head of the business centre. Under them will be 10 cutters and 5
testers. There will also be a person responsible for the different auctions taking place
in the Gem City. The marketing side in the business development centre will have
45
relationship manager who will be responsible for the corporate clients. Under him will
be marketing officers who will take care of the rented shops and units, research and
development, advertisements etc.
Finance and Planning
The finance and planning department head will be responsible for the financial as
well as planning ahead the budgeting of the Gem City. Under him will be an incharge
for purchasing and one to handle accounts. The purchasing incharge will further
have a purchasing officer and an inventory officer who would check the quantity of
stones coming in and out of the store room. Under the accounts incharge will be
accounts officers and a cashier.
Human Resource and Admin
The human resource and admin department's head as the name says will be
responsible for the hiring and firing as well as handling the different administration
operations. Under him will be personnel assistants and an admin incharge. The
driver, electrician, photocopier, plumber/janitorial staff, security guards and the
receptionist/operator all will be the responsibility of the admin incharge. The security
guards and the janitorial staff will be outsourced while the rest will be permanent
members of the Gem City.
46

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An Overview of Gemstone Sector

GEMSTONE SECTOR - PAKISTAN

Small and Medium Enterprise Development Authority

3.1 INTERNATIONAL MARKET 7

4 PAKISTAN’S GEMSTONES RESERVES 15

4.1 ESTIMATED RESERVES 17

5 GEMSTONE INDUSTRY OF PAKISTAN 18

6 POTENTIAL OF PAKISTAN'S GEMSTONES 25

7 MAJOR RECOMMENDATIONS FOR IMPROVING GEM INDUSTRY 29

8 ANNEXURE-1 PROPOSAL FOR SMALL SCALE MINING 31

9 ANNEXURE–2 GEM CITY CONCEPT 36

¨ Variety of gemstone resources

¨ Non recognition of gemstone as an industry by the government

¨ Availability of quality gemstones from Afghanistan

¨ Lack of financial support from financial institutions

3.1 INTERNATIONAL MARKET

Table1: World Gemstone Exports Trend

Figure 1: World's Top Gemstone Exporters-1997

Hong Kong Others Thailand

Source: ITC Database

Table 2: World Gemstone Import Trend

1993 1994 1995 1996 1997

Figure 2: World' s Top Gemstone Importers 1997

Figure 3: Top Asian Gemstone Exporting Countries

Source: ITC Database

3.2 PAKISTAN OVERVIEW

Figure 4: World Vs Pakistan Gemstone Exports

2,500.0 2,240 2,227 2,140

UAE India Thailand

Source: Export Promotion Bureau

3.3 AVERAGE PRICES OF GEMSTONES

Table 3: Average Prices of Rough Gemstones

3.4 INTERNATIONAL MARKETS OF GEMSTONES

4 Pakistan’s Gemstones Reserves

Table 4: Location of Gemstone Mines

Stone Characteristics Location

4.1 ESTIMATED RESERVES

Country Mines Stone Carats in millions

Pakistan Mingora Emerald 20-30

Kashmir Nangimali Ruby 100-200

Afghanistan Jagdalak 100-200

Pakistan Dassu Peridot 75-100

Source: Emerald Mining Company Report

4.2 AFGHANISTAN : AN OPPORTUNITY FOR PAKISTAN

5 Gemstone Industry of Pakistan

¨ Non recognition of gemstone sector as an industry by the government

5.2 CUTTING AND POLISHING

Marketing of gemstones is extremely important in order to create awareness. It is due to

One of the major causes of lack of growth in gemstone sector is non-availability of

gemstones in Pakistan. Many proposals and feasibilities for establishing training

5.6 VALUE CHAIN ANALYSIS

Ineffective Improve Law Manual Mechanized No Financial Financial Support

Inadequate Improve Security

Low Volume High Volume

High per cost unit Low cost per unit

6 Potential of Pakistan's Gemstones

Table 6: Estimated Reserves

Country Mines Stone Carats in millions US$/Carat Value in US$ Millions

Proper mine development at these points is likely to increase production manifold.