Madagascar's Mineral Boom

Xan Rice in Ilakaka writes:

In the land with riches underfoot, the poor struggle for a fair cut of the gem bonanza project sponsored by the World Bank is trying to ensure money from sapphire mining benefits local people.

Jean-Noel Andrianasolo has seen the future once before. It was 1998. He was working for an import-export firm in Antananarivo when he heard rumours about extraordinary sapphires being found near Ilakaka, 14 hours' drive south-west of the Madagascan capital.

So he drove there, bought a house, and dug a hole a few hundred metres behind his backyard. He soon found sapphires. The deeper he dug, the more he found. He named the pit "Banque Suisse". "There was so much wealth inside," said the lean, bearded 47-year-old, holding out his hands as evidence. He wore two rings crowned with large sapphires, one deep blue, the other Fanta orange. A third ring, a signet-style band in silver, was topped with nine tiny sapphires, each a different colour.

"All from here," he said.

It is nearly a decade since the start of the Ilakaka sapphire rush, the greatest gem boom in recent world history, and the flow of stones from the sand has never ceased. Each morning tens of thousands of miners, most equipped with little more than a spade, a candle, and belief that this may be their day, head out into the ancient river valleys around Ilakaka. Some disappear down holes so narrow and dark they would please a fox; others sweat in huge tiered sandstone pits such as the Banque Suisse. Given their methods, the product is remarkable: several kilograms of sapphires each day, or about half of the world's supply.

Mr Andrianasolo, a rich man by the standards of a country where nearly three-quarters of the people live below the poverty line, estimates that the greater Ilakaka deposit - at least 120 miles by 80 miles - will keep yielding stones for another century or more. But he is in no hurry to dig them out.

For he has seen the future once more. It still sparkles with gems. But now it also requires knowledge. In a sign of how some in Madagascar are looking to grab a greater share of the international "sapphire split" - the profit in each stone that is shared between the digger, trader, cutter and wholesaler - Ilakaka's most famous resident is going back to school.

Next week he will begin an intensive six-month course in gemology at a World Bank-backed institute in the capital. By June next year he will be able to write "Fellow of the Gemological Association of Great Britain" next to his name. It is costing him $3,000 (£1,500), but he is sure it will be worth it. He will know a decent stone from a great one, and he will be on a par with the foreigners who come into Ilakaka and whisk out the best stones. "It is much better to know," Mr Andrianasolo said.

Few would dispute that the Ilakaka sapphire boom - and smaller but equally frenzied ruby, emerald, tourmaline and gold rushes around the country - have benefited some of the poorest Madagascans in recent years. About half a million people make a living from small-scale mining, and can earn four to five times what they would make from subsistence farming. This is what drew "Mr Rafaly" from his rice plantation in the city of Fianarantsoa to Manombo, nine miles south of Ilakaka. It was late afternoon as he stood alone next to a small pile of moist sand. His mining partner was 10 metres down the hole beside his feet. Every now and then a shout would come up from the inky depths, and Mr Rafaly, 40, would haul up the rope attached to a bucket full of fresh gravel.

"The gravel may contain $100 worth of sapphires, or nothing," he said. "But if I get lucky I will have enough money to plant rice for two years." As he talked, two men walked up the path from the river carrying a large sieve. They had just finished washing their gravel. Bertrand Lava displayed the haul: three small sapphires. Not very valuable stones, either in size or quality, but worth about £10 to the diggers -a good day's work that would benefit several others down the chain.

Typically, a local trader would buy Mr Lava's stones and sell them in the morning market at Ilakaka, where dozens of women in straw hats stand waiting for clients from 6am. On a Sunday morning, pink, blue, yellow and orange stones spilled from small bank bags on to the women's trays. Slender fingers flitted over rough pink sapphires with a touch as light and knowing as a blind person reading Braille. A woman whispered a number, a few notes changed hands, and the stones disappeared into her pocket. The women then hit Ilakaka's main street, where signs such as Mr Yoda's, Mr Woraphat's, Shaolin, Ratnapura, Methra and Virooshi hinted at the provenance of their owners. The hundreds of Thai and Sri Lankan traders here buy the rough stones, and ship them home to be cut.

Sapphires bought locally for $30m to $50m leave the country this way each year. By the time they reach the shops of Europe or North America, their value will have increased several times. And Madagascar will have seen nothing of that latter profit. It is a problem that afflicts much of Africa, which is rich in resources but often lacks the capacity to turn them into finished goods.

"We have the biggest deposit in the world but are not exploiting it properly," said R Nirina, the Madagascan owner of one of the few commercial sapphire mines in the Ilakaka region. Tom Cushman agrees. The unlikely head of the Institute of Gemology, part of a £16m World Bank-sponsored project to stimulate expertise in the local mining industry, arrived in Ilakaka at the same time as Mr Andrianasolo. A straight-talking 52-year-old former gem dealer, he watched Ilakaka grow from a hamlet of seven houses, to a Wild West village where loose talk of a jelly-bean-size sapphire would earn you a bullet in the head, and then to today's sprawling town of several thousand houses, a school, churches, electricity and a clinic - all funded with gem money.

But he also saw how much of the sapphire split was accruing outside the country. With his colleagues at the Institute of Gemology in the capital, he is trying to change that. The institute is running the course Mr Andrianasolo will take, and has already trained more than 300 people as lapidaries. Since the institute opened, several investors have made plans to open cutting factories in Madagascar, Mr Cushman said.

"We don't want to take the foreign traders and cutters out of the deal. But we want to get our guys to compete with them and to keep more of the profits home," he said. "Sometime soon, there's going to be another El Dorado in Madagascar like Ilakaka. We must be ready to take advantage of it."

Backstory
Early French explorers christened Madagascar "Pays des Béryls" after noting the large quantities of semi-precious stones on the island. But it was not until the 1990s that the country's precious stone riches - sapphires, rubies and emeralds - became widely known, sparking frenzied gem rushes all over the country.

Gemologists say that Madagascar's mineral diversity is little surprise if you examine the map of the world 200 million years ago. The island was then part of the Gondwanaland(super continent), with Tanzania to its left, India to its right and Sri Lanka just below - all of which hold some of the earth's richest gem deposits. Aside from mostly unexplored precious gems, there are also reserves of aluminium, titanium and gold.

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