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Gemstones In Sudan: Investment Opportunities And Challenges

(MENAFN- Sudanow Magazine)
By: Rogia al-Shafee

Port Sudan(Sudanow)-Gemstones are natural treasures that have always captivated hearts with their beauty and luster, and have been an integral part of human history and cultures.

These Gemstones have unique characteristics in terms of chemical composition, color, hardness, and transparency, making each piece a masterpiece in its own right.

Interest in gemstones is increasing day by day, not only for their breathtaking beauty, but also for their increasing economic value, which opens wide horizons for investment and development.

To learn about gemstones and their importance, Sudanow met. Prof. Abdullah Al-Tom Ali, Faculty of Medical Laboratory Sciences and President of the Union of Stonemasons and Gemstone Traders in Sudan, who said, “Gemstones are considered the most important natural resources with high economic value, characterized by their rarity, beauty and unique physical and chemical properties.

These stones are formed as a result of complex geological reactions that occur in the earth’s interior over thousands or millions of years under certain conditions of pressure and heat. Among the most famous types of gemstones known worldwide: (emeralds, rubies, garnets, turquoise, sapphires, and diamonds) and each type has multiple uses in the fields of decoration, medicine, and industry.
Gemstones vary widely, and are classified based on their physical and chemical properties. They can be mainly divided into precious gemstones and semi-precious stones, although this classification has become less common in modern disciplines that focus on rarity and demand.

Types of gemstones:

Diamonds are one of the hardest natural materials on earth, characterized by their exceptional luster and ability to scatter light. Diamonds are mainly composed of pure carbon, which is subjected to tremendous pressure and heat deep underground.

(Emerald): A green gemstone belonging to the beryl family, it is known for its extraordinary beauty and distinctive emerald green color resulting from the presence of chromium and vanadium.

(Ruby): A red gemstone belonging to the corundum family, it has a rich red color due to the presence of chromium. Ruby is known for its high hardness and attractive luster.

(Sapphire): Sapphire includes all corundum colors except red (which is classified as Ruby). The most famous Sapphire color is dark blue, but it can be found in pink, yellow, green, and purple.

(Amethyst):A type of quartz with a purple color, ranging from light to dark shades, widely used in jewelry making.

Agate: A multi-layered stone, composed of finely crystalline quartz, characterized by a variety of colors and unique patterns.

Turquoise: An opaque greenish-blue stone that is widely used in traditional jewelry and has great cultural value in many civilizations.

Citrine: Another type of quartz, ranging in color from yellow to orange to reddish-brown.

How to recognize gemstones:
The knowledge of gemstones requires experience and expertise, and is highly dependent on the physical and chemical properties of the stone. Among the most important methods and techniques used:

Color and transparency: Color is the first thing that catches the eye, but color distribution and transparency must be considered.

Hardness: Gemstone hardness is measured on the Mohs scale, with diamonds being the hardest (10), followed by corundum (ruby and sapphire) (9), topaz (8) and so on.

Luster: Refers to how light reflects off the surface of the stone.

Specific Gravity: Refers to the weight of a stone compared to the weight of an equal volume of water.

Refractive Index: Determines the speed at which light passes through a stone and is an important indicator to determine the type of stone.

Laboratory diagnostics: In cases where high precision is required, specialized laboratories use instruments such as X-ray fluorescence (XRF) and Raman spectroscopy to analyze the chemical composition and crystal structure of the stone.

Defects and Inclusions: The presence of natural inclusions within the stone may be an indication of the stone’s authenticity, and in some cases may contribute to its aesthetic value (e.g. rutile quartz).

Defects and Inclusions: The presence of natural inclusions within the stone may be an indication of the stone’s authenticity, and in some cases may contribute to its aesthetic value (e.g. rutile quartz).

Prof. Abdullah Al-Toum, says
“Most gemstones are formed within the Earth, specifically deep within the Earth’s crust and in the upper mantle, under certain conditions of pressure and heat,”

They are accessed through mining operations in specialized mines. After being mined, gemstones go through cleaning, cutting, and polishing processes to bring out their beauty. Some stones like quartz and opal can be found near the surface of the earth, while others like diamonds require deep digging.

Sudan is rich in mineral resources, including gemstones. Although gold takes center stage in Sudan’s mining sector, there is significant untapped potential in gemstones.

Sudan’s gemstone-rich areas:

Geological reports and exploratory studies indicate the presence of multiple types of gemstones in different regions of Sudan, including:

Red Sea and Kassala states: Species of agate, quartz and possibly some other stones are believed to be present.

The river Nile and northern states: May contain some turquoise, amethyst, and quartz.
South Kordofan and Blue Nile states: Some evidence suggests there is potential for stones such as tourmaline and garnet.
Darfur states: Believed to have precious metals and gemstones that have not been fully explored.

Available quantity: It is difficult to determine the exact quantities of gemstones available in Sudan, for several reasons:
Lack of comprehensive geological surveys: Comprehensive and detailed geological surveys have not been conducted to estimate gemstone reserves across the country.

Artisanal and informal mining: Much of the extraction of gemstones (especially those used by local artisans) relies on unregulated artisanal mining, making it difficult to estimate total production.

Lack of investment in exploration: There has been insufficient investment in gemstone exploration compared to gold. The extraction and trade of gemstones in Sudan is subject to controls and restrictions, although their enforcement may face challenges. In general, the Ministry of Energy and Mining is responsible for regulating the mining sector.

Licenses: Exploration and mining operations require licenses from the relevant government agencies.

Regulatory laws: There are laws and regulations governing mining rights, terms of exploitation, and government revenue shares.
Regulatory laws: There are laws and regulations governing mining rights, terms of exploitation, and government revenue shares.

Censorship: These Censorships aim to ensure optimal utilization of resources, protect the environment, prevent smuggling, and ensure that the state benefits from its wealth.
Restrictions on individuals: Individuals often face greater restrictions on commercial gemstone mining than companies, and special approvals are required. This is somewhat similar to hunting, where there are controls on activities to regulate them and ensure their sustainability. However, artisanal and informal gemstone mining is still widespread in some areas.

On the extent of the economic benefit from this sector, Prof. Eltoum says that the benefit is still small compared to the available potential. Its contribution to the gross domestic product (GDP) does not exceed symbolic percentages, although its development could open new horizons for economic growth. It is estimated that Sudan could be among the countries exporting gemstones if the sector is developed and investment is facilitated.

The gemstone sector represents a promising investment opportunity for Sudan, as it has a direct impact on increasing income and providing job opportunities.

The size of the benefit:

Increase government revenue: Mining revenues and taxes on gemstone trade can contribute to increased state revenues.

Providing job opportunities: The sector creates jobs in exploration, mining, cutting and polishing, manufacturing (jewelry), and marketing.

Development of remote areas: Gemstone sites are often located in remote areas, which can stimulate economic and social development in those areas.

Promote exports: Gemstones can become an important source of foreign exchange by exporting them to global markets.

Added value: The gemstone industry offers an opportunity to increase added value by transforming raw materials into higher value end products (jewelry), rather than exporting them as raw materials.
Investment field:

Investment opportunities in the field of gemstones are multiple, including mining, manufacturing, local and international trade, and the establishment of training centers and marketing exhibitions. Investment can be made by individuals or national and foreign companies, but this requires legislative reforms and legal guarantees that stimulate the business environment. Creating partnerships between the government and the private sector can contribute to the development of this sector faster and more efficiently.
Investment in the gemstone sector can be done through:

Large companies: Large companies, whether local or foreign, are best suited to invest in large-scale exploration and mining operations. These companies have the ability to provide the necessary financing, state-of-the-art technology, and technical expertise to manage complex mining projects.

Small and medium-sized enterprises (SMEs): These companies can play an important role in post-extraction stages, such as cutting, polishing, and jewelry manufacturing. They can also be involved in smaller-scale mining operations.

Individuals and artisans: Individuals and artisans play a traditional role in collecting raw stones, processing them by hand, and selling them in local markets. They can be supported by providing training and tools to increase the quality of their products.
Joint investment: Partnerships between local and foreign companies can be encouraged to share expertise and technology and attract capital.

The obstacles that hinder the entry of investors into this sector are not limited to the administrative and legislative aspect, but also include poor public awareness of the value of precious stones, and the absence of specialized research institutions concerned with developing this field scientifically and technically. Some workers in this field also complain of marginalization and lack of official recognition of their skills and expertise, which pushes them to either emigrate or work in the black market.
Despite these challenges, investing in gemstones holds promising opportunities to increase the income of individuals and the state, especially in light of the growing global demand for rare stones. It also contributes to supporting the national economy by diversifying sources of income and reducing dependence on traditional resources such as oil and gold. The gemstone sector is one of the areas that can provide thousands of job opportunities for young people in the fields of exploration, manufacturing, trade, and marketing

Despite the promising potential, investment in Sudan’s gemstone sector faces significant challenges, which suggests that the obstacles mainly come from the Ministry of Energy and Mining.

The main obstacles:

Weak institutional capacity of the Ministry of Energy and Mining:

Lack of Competencies and expertises : The ministry may lack
specialized personnel in gem geology, reserve assessment, and market regulation, hindering its ability to effectively manage the sector.

Poor infrastructure: The ministry may lack
specialized laboratories to diagnose gemstones, which is vital to ensure the quality and grading of
stoneso Corruption: Poor transparency and accountability can lead to corrupt practices that hinder investment and damage the sector’s reputation.

Restrictive investment laws and regulations:

Complex bureaucratic procedures: The process of obtaining licenses and approvals can be long, complicated, and require a lot of red tape, which can put off investors.

High fees and taxes: Fees and taxes on exploration and mining can be very high, reducing the attractiveness of the investment.

Lack of incentives: Laws may not provide sufficient incentives for investors, such as tax breaks or credit facilities.

Lack of clarity in legislation: Some laws may be vague or unclear, causing confusion for investors and increasing risk.

Limiting gemstone traders: Lack of recognition for the artisanal sector: Traditional gemstone traders and artisans are often not integrated into the formal legal framework, limiting their growth opportunities and making them vulnerable to restrictions.

Difficulty in marketing and accessing international markets: Local traders have difficulty accessing international markets due to a lack of knowledge of international standards and export requirements.

Smuggling: Excessive restrictions and bureaucracy encourage smuggling, depriving the state of revenue and increasing chaos in the sector.

Public infrastructure: Poor infrastructure (roads, electricity, water) in mining areas hinders exploration and transportation.

The security and political situation: Security and political instability in some parts of Sudan is negatively affecting investment in the mining sector.

The importance of investing in the gemstone sector to the Sudanese national economy is significant and multifaceted :

Diversify sources of income: The Sudanese economy relies heavily on oil and gold. Investing in gemstones provides an additional source of income, reducing dependence on a single commodity and making the economy more resilient to global market fluctuations.

Job creation: As mentioned earlier, the sector creates direct and indirect jobs along the value chain, from exploration and mining to cutting, refining, manufacturing and marketing. This contributes to lowering unemployment rates, especially among the youth.
Attracting foreign direct investment (FDI): The gemstone sector can attract foreign investment, which brings with it capital, advanced technology, and management expertise, boosting the growth of the sector as a whole.
Increase exports and foreign exchange: Gemstones can become an important export commodity, providing the foreign currency needed to import necessary goods and services for the country and contributing to the stability of the exchange rate.
Development of downstream industries: Investment in gemstones encourages the development of downstream industries such as the jewelry industry, increasing the added value of raw materials and creating new competitive industries.

Improve the trade balance: By increasing exports and reducing the need to import jewelry, the gemstone sector can contribute to improving Sudan’s trade balance.

Regional development: Since gemstone sites are often located in remote areas, investing in them can stimulate economic and social development in those areas by providing basic services and infrastructure.

In short, effective investment in the gemstone sector can be a powerful engine of economic growth, a lever to increase national income, and achieve sustainable development in Sudan.

In conclusion to Sudanow, Prof. Abdullah Al-Toum said that the development of the gemstone sector in Sudan can only be achieved through a clear strategic vision that is built on scientific and economic foundations, including modernizing laws, stimulating investment, and empowering national competencies. Cooperation between government agencies and the private sector, and entering into partnerships with specialized international institutions, would bring about a qualitative leap in this vital field and make Sudan an important player in the gemstone market at the regional and global level.

Sudan’s enormous potential in the gemstone sector requires a bold strategic vision and strong political will to turn it into a tangible reality that benefits the national economy and the Sudanese citizen.

A message to: Decision-makers in the Ministry of Energy and Mining and all relevant government agencies, to local and foreign investors, and to Sudan’s ambitious youth:

“Sudan’s gemstone wealth is not just minerals hidden beneath the earth, but a golden opportunity to build a prosperous economic future. The Ministry of Energy and Mining must reassess its current policies. Priority should be given to developing transparent, flexible, and investment-friendly laws and regulations that aim to simplify procedures, offer necessary incentives, and combat bureaucracy and corruption with determination.

Maximizing the benefits of this wealth requires building strong institutional capacities and training national competencies in geology, mining, and gemstone processing. The traditional sector of artisans and traders must be integrated into the formal system, and provided with necessary support to access global markets.

Let us work together to turn these challenges into opportunities, and open the doors for serious investors, local or foreign, to contribute to the extraction, processing, and commercialization of these treasures.

Investing in gemstones is not just an economic project, but an investment in capacity building, job creation, increasing national income, supporting the national economy, and securing a better future for future generations. Let us utilize this wealth wisely and responsibly to achieve the sustainable development that Sudan deserves.”

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