Auction of corundum (raw sapphires) by Jammu and Kashmir Minerals 480 kg of gem variety Sapphire deposit at Padder, in Doda district of Jammu

Auction of corundum (raw sapphires) by Jammu and Kashmir Minerals

480 kg of gem variety Sapphire deposit at Padder, in Doda district of Jammu

source: http://www.thehindubusinessline.com/life/2008/06/20/stories/2008062050010100.htm

High up in the treacherous Himalayan highlands of Padder, in Doda district of Jammu and Kashmir, the world’s best sapphire is present in abundance. However, extreme geographical conditions and lack of resources have till date hampered the commercial exploitation of this valuable natural reserve.

But things are likely to change soon with the Government in the final stages of granting the licence for mining to a major company.

The authorities are enthusiastic about the high-value project. “We had floated a global tender for mining activity and we have currently short-listed three companies,” said Industries Minister Nawang Rigzin Jora. The companies will be assessed for their financial and technical capability, as well as past experience, to ensure that the Padder sapphire is mined in the most scientific manner, he added.

The project would be implemented on a joint-venture basis with the State-owned Jammu and Kashmir Minerals Ltd (JKML), which currently holds the lease for the sapphire mines.

Prized qualities

From a chance discovery by a caravan during the early-1880s, the sapphire producing mines at Padder have achieved legendary status in the jewellery world. Mining activity began in a big way in 1885 and ended in 1890. The gems mined during this period are valued highly and usually fetch enormous prices around the world. They are prized for the intensity of the pure blue colour sans the undertones of green, grey or purple.

Their colour holds up in all kinds of light, which experts describe as a magical property, as compared to other fine sapphires such as Burmese stones which lose their rich colour in the evening light. The presence of microscopic inclusions in the stone gives it a magical ‘velvety’ effect, creating a soft and yet strong colour.

According to ebay, the price of Kashmir sapphire easily crosses $100,000 a carat, making it the most expensive in its category.

Abid Suhail, General Manager of JKML, says, “The beauty of Kashmir sapphire is simply unmatched.”

Last year, a 22.66-carat Kashmir sapphire pendant was auctioned by Christie’s for a record $3 million.

The mining activity at Padder takes place only two months in a year at 4,500 metres above sea-level. “The geography is extreme, there is high altitude, low air, men and machinery can’t work properly and one gets there after travelling three days on foot,” says Suhail.

Raw sapphire auctions

JKML has undertaken sporadic mining in the area and, as a result, accumulated some raw sapphire known as corundum.

It recently auctioned some of the corundum, which attracted buyers from as far as South East Asia, and fetched Rs 1.3 crore for the 12 kg sold.

The company plans to auction more corundum during the next few months. However, it does not have the facility or infrastructure to convert the corundum into finished gems.

Illegal mining

Like other industries in Jammu and Kashmir, sapphire mining too received a setback during 1989, when violence erupted in the Valley. Owing to their location, the mines became a ‘no go’ area for authorities. Nobody knew what went on at the mines during the turbulent 1990s.

Finally, when a government team visited the mines in 1998, they were shocked to find rampant illegal mining. The miscreants had used crude devices, even detonations, to remove the prized gems, thereby causing considerable damage to the infrastructure at the mines.

“A huge smuggling ring has thrived in the area with some active help from employees of the company,” an insider at the company said.

Waking up to the threat, the government has gradually begun providing security cover to the mines and now plans a foolproof, year-round security grid.

The absence of mining activity during the 1990s has pushed JKML further and further into losses. The staff has not been paid for seven months due to non-availability of funds.

The company earns about Rs 12 crore a year, which includes government aid, but its total expenditure is Rs 18 crore.

Future prospects

However, Suhail is convinced the mines hold a bright future for J&K economy. “Till date no comprehensive study has been made in this regard, but one thing is sure: the deposits are huge enough to turn the fortunes of Jammu and Kashmir,” he says.

Haji Abdul Majid Butt, a noted geoscientist, says that “on the basis of satellite imagery done by National Remote Sensing Agency, there is presence of 480 kg of gem variety on the ridge as initial deposit, which can be recovered through mining.” There are six ridges in the 2-sq km area.

The government is contemplating a satellite study as part of a multi-pronged survey to determine the exact potential of these mines.

“The Government has approached the Indian Remote Sensing Centre at Hyderabad and sought its help to work out the quantity of sapphire reserves in Padder,” says the Industries Minister Jora. Senior officers of the Industries Department have been directed to stay in touch with IRSC authorities to ensure the exercise is undertaken at the earliest.

According to sources, the Gujarat Minerals Development Corporation (GMDC) is tipped to be the favourite for getting the mining contract at Padder.

“Mining is an extremely sensitive issue here and fingers of suspicion are raised if the contract is awarded to private companies,” says a source. “So it seems they want to play safe by giving the contract to a government undertaking which is also financially strong and Gujarat Minerals matches both categories,” he added.

As India’s second-largest lignite producer, GMDC also has interest in other projects like coal, power, cement, bauxite and so on. According to experts, if GMDC hits the bull’s eye at Padder it will be a win-win situation for both the company and the State.