goldsmiths • jewelers • gemologists




Mines of Madagascar: Part II
THE WORLD'S BIGGEST SAPPHIRE MARKET

by Vincent Pardieu and Richard W. Wise
©2008

(The second in a three-part series about the mines of Madagascar.)


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The author descends into a mine near Ilakaka.

Photo by Dana Schorr.

It is 9 a.m., and I just left one of Ilakaka’s many buying offices. The morning rush of gem buying has passed, but the main road is still crowded with dealers, brokers, and other workers, sounding like a swarm of angry wasps. I can now spend some time peacefully walking the main street, taking pictures of daily life in the busiest gemstone-trading center in Madagascar.

In Ilakaka, the busiest business hours are in the morning from
7 a.m. to 9 a.m. and again in the evening from 5 p.m. to nightfall. With more than 100,000 people living there and working in the gem industry, Ilakaka is even bigger than Chanthaburi, Thailand; it is the world’s largest sapphire market. The street pulses with commerce: people buying, people selling, and everyone watching and hoping. Everyone is looking for a way to get in on the action.

Suddenly — I don’t really know why — I think of my grandfather. He always told me, “Vincent, things are never as good or as bad as they look.” Are they today? I get a strange feeling. I look all around me. The camera bag is open on my belt.
Miners work the “Banque Suisse” mining area near Ilakaka. Photo by Vincent Pardieu.

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Miners work the “Banque Suisse” mining area near Ilakaka.

Photo by Vincent Pardieu.

The bag is empty! My pocket has been picked! I’ve been plucked like a pigeon, like a mere tourist — aargh! It was just two hours ago that I had warned my assistants — Jean Baptiste Senoble and Tanguy Lagache, who just finished their gemological studies at the Asian Institute of Gemological Sciences in Bangkok, Thailand — about the pickpockets on the street. Ten years as a tour guide, and finally one of them has gotten me!

We arrived in Ilakaka from Antananarivo, the capital of Madagascar, on July 10. This area became very famous after sapphire was discovered there in 1998. (Although that was not really the first find: Local Bara tribesmen undoubtedly found some stones years before the “official” discovery that sparked a massive sapphire rush.)
A miner uses a hand-crank winch to raise gem-bearing gravel to the surface of a mine. Photo by J. B. Senoble.

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A miner uses a hand-crank winch to raise gem-bearing gravel to the surface of a mine.

Photo by J. B. Senoble.

One day in 1998, an unknown local presented a stone to an employee from Societe Miniere Delorme et Associes (SMDA) who was on his way from Antananarivo to SMDA’s mines near Ampanihy, in the southern part of the island. The stones were subsequently identified as sapphires. Several months passed, and nothing happened. Then, six months later to the day, a group of Thai businessmen passing through on their way to Tulear, on the western coast, were also shown a group of rough stones. They were on their way to buy sapphire at the mines in Andranondambo, at the southern tip of the island. They quickly saw the potential of the stones and bought them.

In the gem trade, a secret cannot be kept for long. Soon, the rush was on. Poor people from all over the island descended on Ilakaka with visions of instant wealth. As a result, mining of tourmaline, topaz, and other traditional Madagascan gemstones in other parts of the island declined dramatically. The action was in Ilakaka. In Andranondambo and at the opposite end of the island in Ambondromifehy — mining areas that had been producing sapphire since the early ’90s — production also dropped off.

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A gem dealer in Sakaraha.

Photo by Vincent Pardieu.

The Ilakaka discovery impacted mining areas far beyond Madagascar. That year, 1999, was a disaster for the Tanzanian sapphire mining industry. Prior to the Ilakaka discovery, between 50,000 and 100,000 miners and traders were working in the Tunduru region of southern Tanzania. The buyers, mostly Thais and Sri Lankans, quickly moved their base of operations to Madagascar, the new sapphire El Dorado, leaving the Tanzanian miners without any market for their production. The Tunduru miners moved either to Mozambique or to other gem-producing areas in Tanzania: Merelani to mine tanzanite, the new Ruangwa tsavorite deposit, or Mahenge for spinel. As of this writing, only around 5,000 miners and traders remain in Tunduru. With only 12 foreign buying offices, Tunduru is a mere shadow of what it was in the glory days before the Ilakaka strike.

After six years of mining and trading, Ilakaka has changed a lot. During our stay at the Relais de la Reine, an excellent hotel near the city, we had some very interesting discussions with hotel owners Philippe and Marc Colombie. They witnessed the incredible story of Ilakaka from the very beginning, and I was lucky to be able to spend some time with them studying their photo album.

Mining villages that were active at the beginning of the strike, with populations of several thousand miners, are now completely deserted. As the surrounding alluvial mining areas became depleted, the miners fanned out, moving on to other discoveries, and the first villages were abandoned. Ilakaka was, a few years ago, a brand new city with a Wild West feel to its wooden buildings. Much has changed. Today, all the important companies have constructed well-built stone and concrete buildings. There are also several churches and a mosque.

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TOP: Trading gemstones in the Ilakaka street market.
ABOVE: Gem mining near Manombe.

Photos by Vincent Pardieu.

Thai traders dominate the gem business in Ilakaka. In the neighboring city of Sakaraha, a new trading center has emerged with Sri Lankans as the dominant group. At Manombe, an area just a couple of miles to the west of Ilakaka, an important alluvial deposit was recently found along a stream. Immediately a new group of buyers, again mainly from Sri Lanka, built buying offices there, hoping to get first crack at the area production before the gems reach Ilakaka or Sakaraha.

If Antananarivo is Madagascar’s ruby-trading capital, Ilakaka is the main sapphire market on the island. Sapphires from all over the island, and probably from outside Madagascar, are now traded there. Ilakaka’s main street is busy, but good stones are becoming rarer, competition is fierce, and Ilakaka buyers are seriously concerned about their rivals in Sakaraha and Manombe, areas that are closer to the new mines. Nevertheless, a million dollars a day change hands in the gem markets of Ilakaka, Sakaraha, and Manombe.

TOP: Trading gemstones in the Ilakaka street market. ABOVE: Gem mining near Manombe. Photos by Vincent Pardieu.

The Ilakaka deposit is potentially huge. Sapphire, along with many other gems, have been found in an area covering approximately 350 square miles. This is the world’s largest known sapphire deposit.

After six years of mining, the placers located close to Ilakaka are mostly depleted. Prospectors now have to roam farther and dig deeper, opening the way for larger concerns with the money for heavy equipment. In a country known to have only two good roads, it can easily require a two-day commute from Ilakaka for a local Malagasy miner to reach a mine within this vast deposit.

Most of the mining we saw in Ilakaka is small-scale pit mining that relies on muscle power rather than horsepower. There are a few mechanized operations. This may change rapidly, as recent changes in the mining code were made specifically to encourage large-scale capital investment. Couple that with the rapid depletion of easily-mined, near-surface deposits, and the future seems to lie with mechanization. Currently, there are rumors about diamonds found in the Ilakaka region. In a country where a stolen cow can make headlines, this is big news indeed.
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A handful of corundum rough from the area around Ilakaka,

photo by Vincent Pardieu.


Typically, in the Ilakaka area the mining rights are owned by large mining groups that try to make arrangements with the local people living in their carres. A French word meaning “square,” carres is also the local name for the mining concessions, which are granted in square plots. At the same time, other groups more involved in trading than in mining are known to sponsor illegal miners, who poach on others’ carres. Currently most of the gem buyers are located in Ilakaka, Sakaraha, or Manombe. They buy their gems in town from local brokers, who in turn buy stones from the miners in villages or at the mines. As these brokers’ income depends on that proximity trade, they are not pleased when foreigners invade territories that are officially set aside as “Malagasy business areas.” Conflicts of interest between mining groups, miners, local villagers, illegal miners, and local and foreign traders make a heady brew that sometimes overflows into violence — and has given Ilakaka a reputation for being a dangerous place to do business.

Besides sapphire, which is the area’s main business, one can see many different types of gems traded in the streets of Ilakaka: chrysoberyl — including the rare alexandrite variety — spinel, garnet, zircon, tourmaline, aquamarine. Sometimes, we are told, lucky buyers may be offered colorless quartz that turns out to be diamond.

But the Ilakaka gem market is not an easy place to buy and make money. Buying gems is simple; making a profit is a challenge. There are many risks, and it seems the closer you get to the mines, the more scams you find. Sapphires that are heated locally at low temperature to improve their color are commonly sold as unheated gemstones. Gemstones are routinely “improved” with ink and added to parcels. Sapphire rough that was heated abroad (and turned out badly) is brought back to Ilakaka to be sold again locally as unheated rough. You will also find broken and tumbled synthetics that look like natural, alluvial crystals; irradiated yellow and orange gemstones which will fade with time; and, of course, the traditional glass and imitation gemstones that are a mainstay of gemstone markets all over the world.

Whatever else, coming to Ilakaka was an adventure. From its busy gem market to the mining pits scattered in the dry countryside to the fine French cuisine, our stay in Ilakaka was a waking dream for the passionate gemologists that we are.
PART III