The curse of the sapphire

Madagascar is today the main source of sapphires for Swiss jewellery and watch brands. But the Malagasy state and the small-scale miners who extract them under appalling conditions hardly benefit from this precious resource, which is most often exported illegally. Field report.

The landscape resembles that of the planet Mars: red earth riddled with “craters”. About a metre wide, these cavities are equipped with a rudimentary pulley at the top, made from wooden planks, which enables the miners to descend to the bottom of the mine. When they return to the surface, they are covered in a grey dust that gives them a ghostly appearance.

Others are digging with shovels, extracting the reddish water with the help of rattling motor pumps. Each team is accompanied by a guard who supervises the operations with a rifle on his shoulder. When the rubble has been excavated, it’s put in bags and carried on the mens’ backs to the river, where it is washed in a sieve, with the hope of finding a gem.

Robelfin shows the five sapphires he found.

Robelfin shows the five sapphires he found.

“Today we found five sapphires; pink, white and blue,” confides Robelfin, a 30-year-old miner wearing an Iron Man T-shirt, pointing to small, coloured pebbles. “This evening, I’ll go into town to sell them. But four of us will be sharing the booty. It certainly won’t make me a billionaire!” Three weeks ago, Robelfin was still working on the coast as a bartender at a beach club in Mangily. He came here because, like so many others, he had heard rumours about a new sapphire mine.

Given the name Be Mandresy, the mine was created three weeks ago. A local farmer had found a sapphire and had brought along his extended family. The news spread like wildfire, and nearly a thousand miners are now working this area in the heart of the savannah of southern Madagascar. On the road leading to the mine, a bumpy dirt-track two hours from the RN7 – the only paved road in the country – we regularly come across bush taxis packed to bursting point, their roofs covered with the meagre possessions of migrants, who also dream of finding sapphires.

The new Be Mandresy mine was opened three weeks earlier.

The new Be Mandresy mine was opened three weeks earlier.

A village made of huts built from branches has sprung up next to the mine. The women prepare food in large pots over fires. Children, some with their bellies distended by dysentery, chase each other around. The older ones have gone off to the river to help their parents wash away the rubble. There are no schools, no electricity, and no latrines in this village, that has popped up like a mushroom.

A village emerged from nothing overnight in Be Mandresy, comprising huts made of branches.

A village emerged from nothing overnight in Be Mandresy, comprising huts made of branches.

The mine is located at the heart of the Ilakaka mining region, an area covering 4,000 km2, which is home to one of the largest sapphire deposits in the world. Discovered in 1998, it is now one of the leading sources of these gems in the world, supplying major Swiss jewellery and watch brands.

Tens of thousands of small-scale miners live here with a few hundred foreign buyers – Sri Lankans and Thais, but also Swiss. These intermediaries are responsible for exporting the rough stones, while circumventing official formalities and using bribes, to Sri Lanka and Thailand. They are then cut and resold at a great profit, before ending up in the hands of luxury giants, such as the Geneva-based Richemont group (owner of the Cartier brand), Lucerne-based Bucherer (recently acquired by Rolex), Harry Winston (which belongs to the Swatch group) and the Lucerne-based jeweller Gübelin.

Once the rubble has been excavated underground, the miners in Be Mandresy wash it in the river under the watchful eye of armed guards.

Once the rubble has been excavated underground, the miners in Be Mandresy wash it in the river under the watchful eye of armed guards.

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Once the rubble has been excavated underground, the miners in Be Mandresy wash it in the river under the watchful eye of armed guards.

Once the rubble has been excavated underground, the miners in Be Mandresy wash it in the river under the watchful eye of armed guards.

Sapphires belong to the corundum family, and are one of three coloured gemstones, alongside rubies and emeralds. The Royal blue and the Padparadscha, an orangey pink which is supposed to look like a lotus flower at sunrise, are the most prized varieties.

Jewel-quality sapphires traditionally come from Kashmir, in the Indian Himalayas, Thailand and Sri Lanka. “But the mines in these countries are mostly exhausted,” remarks Elke Berr, a Geneva-based gem dealer. In Sri Lanka, political turmoil and stricter environmental rules have also hampered production. In the case of Myanmar, where deposits are smaller, gems have struggled to find outlets since the embargo imposed in 2021 on the military junta.

More recently, sapphires have been discovered in Rwanda, Tanzania, Kenya and Madagascar. The latter country now dominates global production, with 40 to 60 percent of volumes. However, there is a worldwide shortage of sapphires. “This caused prices to skyrocket, tripling between 2005 and 2015,” notes Berr. This phenomenon has been exacerbated by the rise in demand from the new Chinese and Indian middle classes, as well as by the growing popularity of coloured gems as a highly valued safe-haven investment.

The existence of precious stones in Madagascar has been known since the French colonial era. But it was not until the discovery in 1994 of blue sapphires of exceptional quality in Andranondambo, in the far south of the country, that mining began. The Ilakaka deposit was only discovered in 1998.

Ilakaka “the Terrible” attracts the Swiss

Hundreds of small-scale miners then rushed into this desert-like agro-pastoral region dominated by the Bara ethnic group. What started as a hamlet of about 40 people has now grown into a mining town, which now has a population of at least 60,000.

Ilakaka soon felt like a lawless border town, “where men stroll around carrying guns on their hips”, “Malagasy and foreigners who have recently bought or sold valuable stones” are routinely attacked and “poorly paid gendarmes and police are easily corrupted by bandits to "loan" them their weapons for attacks”, according to the account given by the US ambassador in a diplomatic cable dated 19 March 2008, which was revealed by Wikileaks. In January 2007, Osama bin Laden’s brother-in-law, Mohammad Jamal Khalifa, was assassinated in Ilakaka following a sapphire deal that went wrong.Hundreds of small-scale miners then rushed into this desert-like agro-pastoral region dominated by the Bara ethnic group. What started as a hamlet of about 40 people has now grown into a mining town, which now has a population of at least 60,000.

Ilakaka soon felt like a lawless border town, “where men stroll around carrying guns on their hips”, “Malagasy and foreigners who have recently bought or sold valuable stones” are routinely attacked and “poorly paid gendarmes and police are easily corrupted by bandits to "loan" them their weapons for attacks”, according to the account given by the US ambassador in a diplomatic cable dated 19 March 2008, which was revealed by Wikileaks. In January 2007, Osama bin Laden’s brother-in-law, Mohammad Jamal Khalifa, was assassinated in Ilakaka following a sapphire deal that went wrong.

Sitting on the ground, women sell tiny sapphires for the equivalent of 5 francs a gram.

Sitting on the ground, women sell tiny sapphires for the equivalent of 5 francs a gram.

During this chaotic period, several Swiss settlers took up residence in Ilakaka, alongside Sri Lankan and Thai buyers, who had arrived en masse at the beginning of the rush. One of them, originally from Zurich, who had made his fortune trading gems in Tanzania, used to come once a week from the capital, Antananarivo, according to a documentary from the Swiss broadcaster SRF, broadcast in 2000. “He would park his little plane near Ilakaka and go to his buying counter with several armed bodyguards,” recalls Vincent Pardieu, a French gemmologist who has been studying the Ilakaka deposit since its discovery.

A crowd would be waiting for him. “He would arrive with bags full of cash and buy everything, without any sorting or negotiating,” recounts Rémy Canavesio, a French anthropologist who has carried out several research in Ilakaka. Once back in Antananarivo, he would share his treasure with a Swiss compatriot, Alex Leuenberger from Bern, who had moved to Madagascar in 1996 after his university studies. According to him: “He let me choose the stones I wanted, but he set the price.” The gems were then sold to wholesalers in Japan, the United States, Thailand and Europe. Later on, the Zurich trader set up the online cut gem sales portal Multicolour Gems, based in Bangkok. When contacted, he declined to comment.

Aline, the Thun-based company that loves sapphires

As for Alex Leuenberger, he moved to Ilakaka to operate a mechanized mine, backed by the company Pink Valley. “At that time, we had 14 trucks, 8 to 10 excavators and 1 bulldozer,” he recalls. “We were washing 2,000 m³ of gravel per day.” But the costs were exorbitant, according to him. “We had to shell out USD 200,000 to USD 280,000 a month just to keep going,” he says. “In 2004 the mine went bust,” he adds.

Alex Leuenberger returned to Switzerland, where he founded the company Aline, near Thun, which specializes in the purchase and resale of gems. It has become one of the leading suppliers to the jewellery and watch sector, with a client list including Swiss and international brands such as Cartier, Gübelin, Bulgari, Tiffany, Louis Vuitton, Dior and Chanel. The rough stones obtained in Madagascar are cut in his workshop in Bangkok and by the Sri Lankan company Sapphirus Lanka.

For a long time, Aline had another Swiss contact among its suppliers of Malagasy sapphires – Mark Noverraz from Geneva. Having trained as a locksmith, he criss-crossed Africa in search of gold, emeralds and diamonds for the Swiss watch sector, before settling in Madagascar in 1996. “I arrived there with 3,000 francs, my Swiss Army knife and a cutting machine made from car parts,” he recalls. In 1998, he heard about the great rush to Ilakaka. “Six months later I was there,” he adds. “A move that changed my life. At the start, we were buying sapphires by the bucketful.”

Mark Noverraz in Tanney, near Geneva. Since January 2023, he has been living between Ilakaka and Switzerland.

Mark Noverraz in Tanney, near Geneva. Since January 2023, he has been living between Ilakaka and Switzerland.

“I arrived there with 3,000 francs, my Swiss Army knife and a cutting machine made from car parts”: Mark Noverraz’s showroom in Ilakaka.

“I arrived there with 3,000 francs, my Swiss Army knife and a cutting machine made from car parts”: Mark Noverraz’s showroom in Ilakaka.

He joined forces with Daniel Grondin, a Frenchman he had met in Switzerland. They both tried their hand at mechanized mining on an isolated site, setting up the company Dream Stone Trading in 2003. But, just as happened to Alex Leuenberger, both men were facing exorbitant operating costs. After three years, they gave up and focused on buying stones from small-scale miners. Their gems were sold not only to Aline, but also to the Swiss jewellers Gübelin and Frieden, as well as to American and Japanese wholesalers.

Kinawate, the miner who can’t feed his children

When you drive along the stretch of the RN7 that bisects Ilakaka, it seems a far cry from its past as a “wild west” town. There’s a whole line of shacks along the road, offering transfers via Airtel or MVola, mobile money transfer services. Women, their faces covered with yellow paste to protect their skin from the sun, pass by with baskets on their heads, laden with fish, fritters and tomatoes. The town now has schools, a police station and a health clinic. It has a 24-hour electricity supply thanks to a solar power plant.

But if you venture beyond, into the adjacent alleyways, the tarmac gives way to dirt roads lined with wooden and tin shacks, giving the appearance of a slum. There’s an advertisement for a bar called “The Jokers” and its slot machines. Further on, a car is overturned, its seats soaked in blood. The night before, a group of miners, elated by a gem sale, went on a drinking spree before one of them got behind the wheel. Violence, even if less visible, has not disappeared. A security guard was shot dead a few days before.

The sun has just risen. Kinawate, a 54-year-old miner who arrived in Ilakaka in 1999, is already on his way to work. Carrying a shovel and a miner’s bar – an iron bar cut into a point – he sets off for the mines. With a tall, lean body, calloused hands worn smooth by work, and a warm smile, this family man, who once worked on a fishing boat in the north of the country, walks quickly but without hurrying. Having arrived in a large expanse of savannah riddled with holes, he immediately spots the mine he was working with a colleague.

Kinawate is independent. “I’m self-financed, but I can keep 100 percent of the price of the gems that I find,” he explains. He usually sells them to “agents”, Malagasy businessmen, who prowl the peripheries of the mines wearing fake Rolexes and shabby suits. They buy the stones from the miners, before selling them for up to five times more to Sri Lankan or Thai gem dealers based in the region.

Some small-scale miners strike a deal with a Malagasy or Sri Lankan “boss”, who supplies them with rice, oil and tools. In exchange, they give him up to 50 percent of the price of each gem sold. Others get a daily pay-check but no percentage on the sapphires.

Kinawate begins by building a wooden pulley, connected to a plastic canister cut in half. The mine is supported by a few wooden rings and a bundle of twigs. However, the sandy clay soil is friable, and accidents are a frequent occurrence. “Two months ago, I lost a friend,” he laments. “He was buried alive when the tunnel collapsed. We spent hours digging to find him, to no avail.” When Kinawate goes underground, he tries not to dwell on the danger involved. “Otherwise, I wouldn’t be able to work,” he adds.

Armed with a torch and his iron bar, Kinawate slides to the bottom of the mine using the pulley. It is about 10 metres deep. The miners dig vertically until they reach the gem layer, a mixture of pebbles and sapphires carried along by a prehistoric river nicknamed “lalan-bato” (“the road of stones”), and then they clear out perpendicular channels.

The tunnels are so narrow that the miners have to crawl. It’s swelteringly hot in there. “I usually spend four hours underground, before I let my colleague take over,” says Kinawate. In some areas, you have to dig up to 30 or 40 metres to reach the gem layer. At this depth, there is a lack of oxygen and there can be pockets of toxic gases. The miners have therefore developed a makeshift system comprising plastic bags connected to a hose, which someone on the surface fills with air and compresses to send oxygen to the bottom of the mine.

Like all the small-scale miners in Ilakaka, Kinawate is trapped by his dream of finding the stone that will make him rich. In a country ravaged by droughts and famines, where 70 percent of the population lives on less than USD 2 a day, other opportunities are few and far between. “Life is hard here,” he says.

“If I could, I’d go back home. But I don’t even have the money to pay for the bus ticket. And I can’t go back to the village empty-handed. That would be shameful.”

His best find so far is a 7-gram sapphire sold for 50 million ariary (CHF 9920). “But this amount had to be divided among six miners, so we only received a little more than 8 million arrays each (CHF 1,650),” he explains. “Not really a life-changing amount!”

The “Swiss Bank”

Kinawate can at least dream of becoming rich. This is not the case for the dozen or so men who are digging an open-pit mine about fifty metres in diameter under a blazing sun. They work at a steady rate, like on an assembly line, throwing large shovelfuls of red earth behind them. Known as “stripping”, this technique is used when the gem layer is situated below the water table. The site, on the edge of Ilakaka, has been nicknamed “the Swiss Bank” because of its potential.

By mid-afternoon, the miners arrive at the river laden with bags full of rubble. They wash it in a sieve in the hope of finding a sapphire.

By mid-afternoon, the miners arrive at the river laden with bags full of rubble. They wash it in a sieve in the hope of finding a sapphire.

“I earn 10,000 ariary a day (CHF 2),” says Sarobidy, an 18-year-old who has been working in the mine with his father since he was 15. “If I come, I get paid; otherwise, I don’t.” His situation is not uncommon. Children help their parents sort and wash the rubble collected from the mines from the age of five. From the age of 15, they are considered as adults and go underground.

Sarobidy, aged 18, has been working in the mines with his father since he was 15. He earns the equivalent of 2 francs a day.

Sarobidy, aged 18, has been working in the mines with his father since he was 15. He earns the equivalent of 2 francs a day.

The day is drawing to a close. Kinawate and his colleague put the rubble in cement bags and carry it to the river on their backs, with the strain etched upon their faces. Each bag weighs 40 to 50 kg.

When they reach the bank, they wash the pebbles using a rudimentary sieve. Then they examine the small round stones, lifting them by handfuls in the hope of seeing one of them glisten in the sun, until the last bag is empty.

“Too bad, there’s nothing.”

Kinawate struggles to hide his disappointment. “We haven’t found a stone for three months,” he said. “But we still have to eat every day.”

He sets off for Ilakaka, where he lives in a wooden hut with only a bed and a battered chair for furniture. Sitting on the floor, his wife Jacqueline is ironing clothes with a charcoal heated iron. She washes her neighbours’ clothes for 5000 ariary (CHF 1) a day. Their daughters Lianah, 8, and Kalicia, 17, are sitting on the bed. Kalicia is playing with her 7-month-old baby. Since Kinawate couldn’t find anything at the mine, the family will have to wait until Jacqueline has finished working to buy food.

Large-scale extraction

Dominated until now by small-scale miners, the nature of the Ilakaka mining rush is about to change. “Most of the gems on the surface have already been mined,” reckons gemmologist Vincent Pardieu. “The future of the deposit lies in large-scale mechanized mining. Crucially, this will make it possible to reach sapphires located at greater depths.”

This prospect whetted the appetite of Guillaume Ah Thion, a young Sino-Malagasy entrepreneur who has forged a business relationship with the Bernese importer Alex Leuenberger. He and his brother have just taken over the Gondona mining company, created by his father. Located at the end of a dirt track, the site resembles a large scar cutting the savannah in two. Two excavators have stripped the few metres of “barren” soil above the gem layer, digging a long trench in the sandy soil. It is filled with turquoise water that a pump is in the process of extracting.

Close to Ilakaka, the mechanised Gondona mine has disfigured the valley.

Close to Ilakaka, the mechanised Gondona mine has disfigured the valley.

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Close to Ilakaka, the mechanised Gondona mine has disfigured the valley.

Close to Ilakaka, the mechanised Gondona mine has disfigured the valley.

“This channel follows the course of the prehistoric river,” says the 23-year-old. Once extracted, the rubble dries overnight in the open air, under the watchful eye of an armed guard, and is then loaded onto one of the trucks that hurtle down the dirt track to the river. The rubble is placed in a washing station that spits it into the river, which has become beige and opaque. “What we’re interested in is here,” explains Guillaume Ah Thion, pointing to two inverted cones under the machine, where the stones with a density of 3 to 5, corresponding to that of sapphire, have been collected. He will collect 20 to 30 bags out of this, which will be sorted manually.

Gondona has already started prospecting another site, in a remote area an hour and a half away by road. “They’ve turned the whole valley upside down close to Ilakaka,” says Rémy Canavesio. “In doing so, they’ve destroyed a forest alongside one of the rivers.” The inhabitants of Ilakaka are also complaining that the level of the wells has dropped since Gondona began its large-scale operations about five years ago. “I’ve never heard about this,” says Guillaume Ah Thion, who nevertheless admits that his mines may have “temporarily” lowered the water table in some places.

A salary of 47 francs a month

Two of the 200-250 employees of young entrepreneur Guillaume Ah Thion, most of whom earn the equivalent of 47 francs a month, Madagascar’s minimum wage.

Two of the 200-250 employees of young entrepreneur Guillaume Ah Thion, most of whom earn the equivalent of 47 francs a month, Madagascar’s minimum wage.

Gondona’s employees, some of whom live in huts next to the mine, get a fixed wage. “We have 200 to 250 workers,” says Guillaume Ah Thion. Most of them earn the equivalent of the Malagasy minimum wage, i.e. 238,800 ariary (CHF 47). This figure “is low, even by African standards, and was imposed unilaterally by the government without negotiation with the unions,” says Barson Rakotomanga, a union leader.

Built from honey-coloured bricks, with a large terrace and swimming pool, the Ah Thion family home stands out from its surroundings. “Every 10 days, we hold auctions here with local Sri Lankan buyers,” says the young boss, pointing to plastic bags containing batches of sapphires graded according to their carats, which he has just removed from a huge safe. However, he reserves his most beautiful pieces for Alex Leuenberger’s company Aline, as well as for the French house Piat, which supplies Rolex, Cartier, Van Cleef & Arpels and Hermès. Piat has a subsidiary in Geneva.

The young Sino-Malagasy entrepreneur Guillaume Ah Thion utilises the mechanised extraction of sapphires. He admits that his mines have lowered the water table in some places, “on a haphazard basis”.

The young Sino-Malagasy entrepreneur Guillaume Ah Thion utilises the mechanised extraction of sapphires. He admits that his mines have lowered the water table in some places, “on a haphazard basis”.

While Gondona is currently the only mechanized mining company in Ilakaka, this is likely to change soon. The UK giant Gemfields, which owns emerald mines in Zambia and ruby mines in Mozambique, has already begun exploring a location in Ilakaka. This summer, however, it brought a case before the British courts, denouncing Romy Andrianarisoa, then President Andry Rajoelina’s chief of staff but since dismissed, who had asked the company for a bribe of CHF 250,000 in exchange for a mining concession.

While this is the first case of corruption on this scale revealed in Madagascar’s sapphire industry, the payment of bribes is common practice in other sectors of the economy in this country, to the extent that Transparency International has ranked it 142nd out of 180 in its corruption league table. Gemfields’ rival, Fura Gems, based in Dubai, is also interested in the region.

Mohamed, the Sri Lankan buyer: “I make an average profit of 400 percent”

It’s 15:30. Just past Ilakaka, on the RN7, the buyers’ village of Sakaviro starts coming to life. This collection of wooden huts and fortified minipalaces that sprung up a few years ago is where Sri Lankan and Thai buyers come to get their hands on the most beautiful stones as they come out of the mine, before they reach Ilakaka. Every day between 16:00 and nightfall, Sakaviro fills up with crowds who wander from one shopping counter to another, looking for the best price. The atmosphere is frenetic. The air reeks with the smell of money.

“I want 750,000 ariary (CHF 148),” says a Malagasy, as he throws a pink sapphire onto the white plastic tray in front of the Thai buyer. The latter examines the stone with a helmet fitted with magnifying glasses and measures it with a tape measure. “I’ll give you 600,000 ariary (CHF 119).” he says. “OK.” The deal is done.

Every day, between 4 pm and nightfall, miners crowd round the buying counters in Sakaviro, hoping to sell their gems to dealers from Sri Lanka and Thailand.

Every day, between 4 pm and nightfall, miners crowd round the buying counters in Sakaviro, hoping to sell their gems to dealers from Sri Lanka and Thailand.

The next man has a blue-grey stone for which he is asking 5 million ariary (CHF 990). This time the Thai buyer takes his time. He soaks the gem in a bowl of water, weighs it (4.5 grams) and examines it with a mini torch. “I look at the colour, shape, size and clarity of the stone,” he explains. “I also keep an eye out for any cracks or bubbles.” He ends up offering 1 million ariary (CHF 198). “Can’t you up your price?” “No.” “I’ll take it anyway.”

One of the largest storefronts belongs to World Gems. “We buy everything from small stones for mass-produced jewellery to exceptional pieces for high-end jewellery.” says Kizwan, 45, who arrived from Colombo two months ago. He says he is willing to pay up to 100 million ariary (CHF 19,790) for a beautiful blue sapphire.

Unlike diamonds or gold, the price of sapphires is not determined by set criteria. It depends on intangible factors, left to the buyer’s interpretation. The miners are clearly unaware of what the stones, which they hunt for all day long, are used for. Among the dozen miners interviewed, only one knew that sapphires are used to make jewellery. This ignorance puts the miners at a disadvantage. “They don’t have a clue about the value of the stones and it’s not uncommon for them to be offered a price that is 50 percent too low,” remarks Alex Leuenberger.

Arriving in Ilakaka in 2000 from Ratnapura, Sri Lanka’s main gem region, Mohamed Ifthikar, the boss of Suranga Gems, is one of the beneficiaries of the system. “Business is booming,” he says. “The miners are a little better informed than they were at the start of the rush, but I still make an average profit of 400 percent on the gems I buy here.”

Up against the powerful resources of the Sri Lankan and Thai buyers, other players operating in the region have gradually been squeezed out. This is what happened to Mark Noverraz from Geneva, who couldn’t match their prices. In 2007, he decided to change his career path, creating a jewellery line called Colorline and hiring two Malagasy cutters whom he had trained to high-end jewellery standards. These creations are now on display in a large white house right in the centre of Ilakaka. Tourists visit the “Swiss Bank” before doing their shopping there.

Daniel Grondin, Noverraz’s partner from the early days, has created a joint venture with Guillaume Ah Thion called Fair Gems, which owns a small cutting workshop in Antananarivo. With their hands blackened by oil, two craftsmen are busy warming their tools with candles before polishing the rough stones on a grindstone. “We cut 10 to 15 pieces a day,” says Daniel Grondin. He supplies clients in the Middle East, China, India and Russia, as well as jewellery houses in the Place Vendôme in Paris. Alex Leuenberger also buys stones from him.

Daniel Grondin, Mark Noverraz's partner from the beginning, who still lives in Madagascar and operates the company FairGems

Daniel Grondin, Mark Noverraz's partner from the beginning, who still lives in Madagascar and operates the company FairGems

Backhanders and bureaucracy

Like all gem buyers in Madagascar, he is faced with a Kafkaesque export procedure. “You have to allow for 10 to 15 days of red tape,” he says.

“Every step of the way, we are asked for bribes to get a stamp or an official document.”

In addition, the government is constantly moving the goalposts. During the Covid-19 crisis, gem exports were suspended, a restriction that was only lifted in September 2022. They had already been interrupted for two years between 2008 and 2010, following a unilateral decision made by Marc Ravalomanana’s government. As a result, “it’s nigh impossible to get stones out of Madagascar legally,” according to Rébecca Michelot, president of the French-speaking section of the Swiss Gemmological Society. “If you declare everything, you’re dead,” confirms Daniel Grondin.

A craftsman examines a gem in Daniel Grondin's cutting workshop in an alley in Madagascar’s capital, Antananarivo.

A craftsman examines a gem in Daniel Grondin's cutting workshop in an alley in Madagascar’s capital, Antananarivo.

This has led to the creation of a parallel system, used by the vast majority of gem exporters. In practical terms, the latter obtain false export documents, provided by the officials who are in charge of official export procedures. “It’s the same people and the same stamps used, but it costs four times less and goes faster,” says Daniel Grondin.

Then, “at the airport, customs officers and police officers agree to smuggle the rough stones through immigration, and the buyers pick them up just before boarding the plane,” explains Alex Leuenberger. Every stage in the process involves paying bribes.

While foreign buyers are generally aware of these illegal schemes, the job of implementing them is entrusted to intermediaries, particularly Sri Lankans, based in the country. “We let them do the dirty work to avoid getting our hands dirty,” says a gem dealer from Geneva.

This means that the export figures are distorted. “Officially, Madagascar exports hardly any gems,” explains Rémi Botoudi, general secretary of the Sekrima trade union confederation. “This means that the income from this activity does not appear in the state accounts and that we as a nation fail to benefit from export taxes.”

In Antananarivo, Madagascar’s capital, sapphires are cut in small workshops, some of which are owned by French and Swiss nationals. Some stones are sold in shops and hotels in Madagascar, but they are largely exported.

In Antananarivo, Madagascar’s capital, sapphires are cut in small workshops, some of which are owned by French and Swiss nationals. Some stones are sold in shops and hotels in Madagascar, but they are largely exported.

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In Antananarivo, Madagascar’s capital, sapphires are cut in small workshops, some of which are owned by French and Swiss nationals. Some stones are sold in shops and hotels in Madagascar, but they are largely exported.

In Antananarivo, Madagascar’s capital, sapphires are cut in small workshops, some of which are owned by French and Swiss nationals. Some stones are sold in shops and hotels in Madagascar, but they are largely exported.

In 2022, Madagascar exported USD 60,179 worth of gems (rubies, emeralds and sapphires), according to United Nations statistics. In 2019, before Covid-19 restrictions were imposed, this amount was USD 210,088. But in reality, Madagascar exports about USD 150 million worth of sapphires a year, according to various estimates.

When sapphires leave Madagascar they are usually bound for Sri Lanka. The gems are cut and, in the case of those of lesser quality, heated to more than 1500 degrees in order to make their colour more vivid or to dissolve their inclusions and increase their clarity.

They are then sold to Thai wholesalers. “Almost all of these stones pass through Bangkok at some point in their journey,” remarks Vincent Pardieu. The city has become a world centre for the trade of coloured gems, just as New York and Antwerp are for diamonds.

From there, they are bought by other intermediaries who take them to their final destinations. The most beautiful pieces are exhibited at international fairs, such as the GemGenève trade fair or the ones in Hong Kong, Las Vegas or Tucson, before ending up in the possession of the major jewellery and watch brands.

Dream jewellery for nightmare stones

Located on the first floor of the octagonal building that houses Gübelin’s headquarters, close to Lake Lucerne, the Gem Lab looks more like a start-up office than a laboratory. Gemmologists are at their computers, performing complex calculations to determine the degree of similarity of the stones they have been entrusted with against the reference collection. “It contains more than 28,000 gems, collected from mines around the entire globe,” says Daniel Nyfeler, head of the Gem Lab.

Switzerland is home to the world’s two most renowned laboratories which perform the analysis of coloured gems: the Gübelin Gem Lab in Lucerne and the Swiss Gemmological Institute in Basel, founded in 1923 and 1972 respectively. Both issue reports which determine the origin of the gem and whether it has undergone any treatments. They also assign a grading to the stone and, in some cases, a colour, such as Royal blue or Pigeon blood red, which are coveted terms.

To analyse a stone, the Gem Lab technicians first examine it under a microscope. They then carry out several spectroscopy and mass spectrometry analyses to determine its molecular and chemical composition. “A stone is like a space–time capsule,” says Daniel Nyfeler. “It contains numerous minerals that tell us about where and when it was formed.” Every year, the laboratory analyses 10,000 gems.

SEM image of a broken sapphire. © Steve Gschmeissner / Science Photo Library

SEM image of a broken sapphire. © Steve Gschmeissner / Science Photo Library

The process is precise, but it’s not infallible. At the beginning of the sapphire rush in Madagascar, “the laboratories didn’t have any reference stones from this country,” says Vincent Pardieu. This led to errors. “Several sapphires were falsely identified as coming from Kashmir or Sri Lanka,” he says.

Even today, the sapphires of Madagascar remain the most difficult to identify. Daniel Nyfeler opens a chart on his computer showing the analysis of a gem from Madagascar. The statistical model gives it only a 46 percent chance of coming from Madagascar, compared to 40.5 percent for Sri Lanka.

This is not insignificant. The Madagascar gems are worth 10 to 15 times less than those from Kashmir and 10 to 20 percent less than those from Sri Lanka.

“Historical mines are imbued with legends, which pushes the price of their gems upwards,”

says Rébecca Michelot.

To improve the traceability of gems, the Gübelin Gem Lab launched the Provenance Proof initiative in 2017. The company has developed a solution containing nanoparticles with synthetic DNA, which can be used for encoding information, such as the mine from which the stone was extracted. “The gem is immersed in this liquid, which seeps into tiny cracks on its surface,” explains Klemens Link, the director of Provenance Proof.

To complete its profile over time, the start-up developed a blockchain-based system in 2019, which consists of a digital twin of the gem. This allows data to be added about the stone at any point in time (Who bought it? Who cut it? Has it undergone any treatments?). “Once the information is put into the database, it can no longer be modified,” he says. It already contains details of more than 10 million gems.

A large proportion of the high-quality gems analyzed by the Gem Lab in Lucerne end up in the vaults of Geneva dealers. To get to Ben Mizrahi’s office, you have to go through an airlock security zone, equipped with surveillance cameras, and pass through no less than four reinforced doors. He is in mid-discussion with a Sri Lankan gem dealer who has come to bring him sapphires from Madagascar.

“I focus on beautiful pieces for high-end jewellery,” says the businessman, who started his own business 12 years ago after working for Piaget and De Grisogono. “It’s a very different market from watchmaking, which requires many small stones of the same colour and size to set on a dial or watch strap.”

“I focus on beautiful pieces for high-end jewellery,” says Geneva-based businessman Benjamin Mizrahi, who started his own business 12 years ago after working for Piaget and De Grisogono.

“I focus on beautiful pieces for high-end jewellery,” says Geneva-based businessman Benjamin Mizrahi, who started his own business 12 years ago after working for Piaget and De Grisogono.

Geneva became a trading centre for gemstones after World War II. “Many foreign gem dealers came to settle here,” says Thomas Färber, heir to a dynasty of German jewellers who settled in Geneva in the 1980s. “Auction houses such as Christie’s and Sotheby’s have also opened branches there.”

Geneva has also benefited from the presence of free ports.

“They allow you to avoid paying import taxes on a gem before you’ve seen it with your own eyes,”

explains Elke Berr, one of the few women in this business, who founded Berr & Partners in 1986. She has visited Madagascar twice and regularly obtains stones from there.

Geneva-based gem dealer Elke Berr examines a sapphire from Madagascar.

Geneva-based gem dealer Elke Berr examines a sapphire from Madagascar.

The secret world of Geneva’s gem dealers, whose offices, with no nameplates on display, are located on the upper floors of discreet buildings in the back streets, is essentially made up of “family houses that are passed down from one generation to the next,” says Charles Abouchar, whose company was founded in 1979. The “city at the end of the lake” has about 30 of them.

To see the results of their sales, you just have to take a walk along the rue du Rhône, Geneva’s high-end thoroughfare. A whole range of jewellery brands is showcased, including Bulgari, Piaget, Adler, Chopard, Graff, Cartier and Gübelin. In their boutiques, which look like jewellery boxes, the pieces sparkle under the subtle lighting. No prices are displayed.

After World War II, Geneva became a major trading centre for gemstones. The chic Rue du Rhône has a whole range of jewellery brands showcased in succession: Adler, Bulgari, Cartier, Chopard, Graff, Gübelin, Piaget or even Harry Winston. © Hemis/Alamy Stock Photo

After World War II, Geneva became a major trading centre for gemstones. The chic Rue du Rhône has a whole range of jewellery brands showcased in succession: Adler, Bulgari, Cartier, Chopard, Graff, Gübelin, Piaget or even Harry Winston. © Hemis/Alamy Stock Photo

“I find it majorly problematic that Swiss jewellery brands are sourcing sapphires from Madagascar,”

states Glen Mpufane, head of gemstone mining for the Geneva-based IndustriALL Global Union. “Miners there endure terrible living and working conditions, much worse than in other African countries.”

However, Ilakaka sapphires can be found in the collections of many Swiss jewellery brands. These include Piaget, Van Cleef & Arpels and Cartier – which belong to Richemont – and Bucherer. Harry Winston, Gübelin, Adler and De Grisogono also use them, according to their websites.

They can be found, for example, on Piaget’s Blue Waterfall necklace, which includes a 14.6-carat blue gem; in Adler’s Namaka collection; on a panther ring by Cartier; in Bucherer’s rainbow-coloured Pastello line; or in a large blue 4.46 carats cabochon fitted on a ring by Gübelin.

Post from Piaget on X: The Blue Waterfall necklace is set with a cushion-cut blue sapphire of 14.61 carats, which is described by Piaget's gemologist as "the most beautiful sapphire from Madagascar I have ever seen"

Post from Piaget on X: The Blue Waterfall necklace is set with a cushion-cut blue sapphire of 14.61 carats, which is described by Piaget's gemologist as "the most beautiful sapphire from Madagascar I have ever seen"

When asked to comment, most of the brands recognized the problems we raised, while referring us to their internal monitoring procedures. Gübelin cited a visit to Madagascar in 2022, intended to evaluate the situation. "The gold-digger mentality, which is extremely widespread, is something that will probably not change quickly, stated president Raphael Gübelin. However, we identified potential mines that focus on sustainability and also pay fair monthly wages. But it will still take a few years before these gemstones reach the market."

He added that the group has been certified by the Responsible Jewellery Council since 2022 and that its suppliers are required to abide by its internal codes of behaviour.

Bucherer recognized that "there is a risk of human rights violations within (its) supply chain" but noted that it had introduced a responsible sourcing policy and a code of conduct that its suppliers are bound by. The group states that it performs regular background checks, for example to verify information provided by its suppliers.

The Richemont group, which owns the Piaget, Van Cleef & Arpels and Cartier brands, also refers to its internal code of conduct and claims to have regular “constructive discussions with civil society organizations” on social and environmental issues.

Rolex stated that it only buys 1000 carats of sapphires from Madagascar each year, enough to make less than 500 watches. Taking into account this limited volume, the brand concludes that it has “no influence on the sapphire market”. It specifies however that it trusts its four suppliers of Malgasy gems, who have all signed its charter on sustainable development.

Swatch, which owns the Harry Winston brand, simply referred to its report on sustainable development and promised to discuss this question internally. Adler and De Grisogono did not respond to our enquiries.

The only organization tasked with certifying the coloured gem supply chain, the Responsible Jewellery Council (RJC), merely “covers up” for the brands at the end of the chain, without verifying what happens upstream, according to Glen Mpufane. Geneva-based gem dealer Ronny Totah minces his words even less:

“It’s a complete farce. The major buyers of coloured gems have decided to issue a label and award it to themselves.”

Set up in 2005 by 14 organizations from the jewellery industry, the RJC has 1,650 members. “Everyone has to commit to respecting our code of practice and is audited by a third party,” insists Melanie Grant, its Director. The benchmarks to be met include decent working conditions, responsible extraction practices and anti-corruption measures.

But only 12 mining companies feature among its members, none of which mines sapphires in Madagascar. Therefore, compliance with the RJC Code of Conduct cannot be verified on the ground. “Small-scale miners in Ilakaka are completely excluded from the certification and auditing process,” stresses Glen Mpufane.

Undignified working conditions, child labour, illegal exports: in Madagascar, the population doesn’t benefit from the wealth in its subsoil. How much longer will the curse of the sapphire be inflicted on this country? And what will it take for the Swiss jewellery and watch brands to finally act?

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