Nepal is losing out on a large amount of export revenue due to lack of value-added gem exports, said officials of the Department of Mines and Geology. Currently, traders export precious and semiprecious stones in their raw form for lack of investments in commercial production.

According to the Department of Customs, Nepal imported precious stones and jewellery valued at Rs645.12 million during the first six months of the current fiscal year, mid-July to mid-January. Export earnings from precious stones and jewellery during the same period totalled Rs122.74 million.

The government issued a directive four years ago saying that there should be a minimum 1 percent value added in precious stones, but it is not being effectively implemented. As per the records of the Department of Mines and Geology, the country has deposits of 63 types of minerals, such as limestone, coal, talc, red clay, granite and marble, gold, and semi-precious and precious stones like tourmaline, aquamarine, kyanite, ruby and sapphire, among others. Among them, 24 minerals are commercially viable.

The Department of Mines and Geology said it had started work to promote investments in processing plants to ensure more value added gemstone exports. Ram Prasad Ghimire, deputy director general of the department, said they had laid the groundwork to invite, in particular, foreign direct investment.

As per the department, small-scale production of limestone, coal, iron, lead, zinc, quartz, quartzite, dolomite, tourmaline, calcite, kyanite and red clay is being done. “While investments are growing in the use of limestone by cement factories, there is very little investment in the rest,” said Ghimire.

The department has permitted 130 firms to extract precious and semiprecious stones, 24 of whom are in operation. According to Ghimire, a number of them are exporting semiprecious stones in their raw form. “Since there is no value added, the revenue is far lower than what they could have earned,” he said.

The mines department has identified 10 districts as commercially viable for the production of these stones. Darchula, Jajarkot, Manang, Dhading, Sindhupalchok, Langtang, Sankhuwasabha, Taplejung, Panchthar and Ilam are the major potential areas.

Ghimire said that only domestic companies had been permitted to extract precious and semiprecious stones. “As the government is mulling to invite foreign investment in the mines and minerals industry, the department seeks to encourage potential foreign investors in the production and processing of the country’s gemstones,” he added.

Giving the keynote speech at the recently concluded Nepal Investment Summit 2019, Prime Minister KP Sharma Oli underlined mines and minerals as high potential areas in which the government would be encouraging foreign investors. In a bid to attract foreign investors in the industry, the department, in coordination with the Ministry of Industry, Commerce and Supplies and Nepal Gem and Jewellery Association, is organising the Nepal International Gem and Jewelry Expo on May 17. A total of 70 exhibitors including a number of foreign firms will be participating in the three-day fair, according to the department.

Investors from India, Sri Lanka, China, Thailand, Japan and the European Union are expected to attend the event. “The main aim of the expo is to attract foreign investment in gemstone exploration, extraction and processing industries,” Ghimire said.