Ethiopian Rough Opal sales to be banned
Ban is effective from 31st May 2013.
Only cut and polished Ethiopian opals can be exported after this date
Article below was issued by senior Ministry of Mines in Ethiopia and printed on Allafrica.com on 13th janurary 2013.
We have not been able to verify article but if it happens I think it will slow down sales Ethiopian opals as majority buyers prefer to cut their own.
Articles states that 80% of buyers are Indian buyers and when you visit local shows in Asia you will see tables of Indian sellers with Ethiopian opals but article also states Indian web site that Indian gemstone business was worth 35 Billion dollars last year which sounds highly exaggerated.
Maybe Ethiopian Ministry is chasing pipe dream that might backfire on them.
Production on many Australian opal fields has been low in the past few years so rough buyers have sourced rough from Ethiopian sources.
If the ban proceeds it will only help Australian rough opal sellers
Press releases as follows_allafrica 13th Jan 2013
The federal government will soon ban the export of rough opal, a precious gemstone; a move aimed at persuading exporters to add value and hence increase revenues, according to senior officials at the Ministry of Mines.
It will be the second extractive resource to be banned, after the Ministry stopped the export of unprocessed tantalum five months ago.
Although opals remain low in the nation’s growing revenues from exports, the precious gemstone has gained momentum recently, after being included in the list of exportable items, in 2005. It has since increased, both in terms of production and revenues.
Opal is used to produce ornaments and jewellery, largely blended with gold and diamond.
Ethiopia exported 10,104Kg of gemstones during the last two quarters of the current fiscal year; 600Kg larger than the Ministry’s anticipated capacity. This has generated 4.6 million dollars in export revenues, which is equivalent to what gold has brought in, during the same five months, in 2012/13.
India, one of the largest exporters of gemstones in the word, is also the largest destination for opal, buying close to 80pc of Ethiopia’s exports last year.
Close to 2,061 individuals, organised under 17 associations, are engaged in opal mining, in Wollo, Delanta, Amhara Regional State, where the precious stones are extracted. These artisans extract the stones and sell them on to the 200 exporters, recognised by the ministry.
Almost all export the precious stone in its rough form, without any value addition, according to Tekle Yilma, president of the Ethiopian Gemstone Association.
“The industry is pretty new and requires time to evolve,” he told Fortune. “It is a recent phenomenon to see the sector is booming.”
Of the total amount of opal exported, only 5.83Kg is done so after being polished, generating a mere 184,724 dollars, whilst the remaining rough stones generated 4.4 million dollars. Senior officials at the Ministry, last week informed exporters to prepare for value addition, through the procurement of opal polishing machines.
The ban has been prompted by the significant price gap between polished and non-polished opal, hence depriving the country of obtaining more benefit from its resources, according to an economist at the Ministry.
Only six of the 52 members of the Association have cutting and polishing machines, which cost between 800 dollars to 3,500 dollars.
“We support the idea,” Tekle told Fortune. “Returns for polished opal are high for the country as well as for us. We’re not only exporting the stones to India, but also creating employment opportunities that we need here so badly.”
Close to 1.8 million people are employed in the opal gemstone industry in India, an Indian government website,www. investinindia.com disclosed. Gemstone is also one of the leading foreign exchange earners for the country. India projects the generation of 35 billion dollars from processed opal export, in 2015.
Opal exporters in Ethiopia are required to repatriate 1,500 dollars, when exporting one kilogram of first grade rough opal, and 800 dollars and 450 dollars for second and third grade, respectively. The Ministry revises the repatriation amount every three months, considering international prices. However, when exporting a kilogram of polished opal, exporters are expected to repatriate 40,000 dollars.
Colours in clay and base, as well as the size of the stones, are among the considerations taken into account in determining the grade, according to Brehanu Kassa, an exporter of black opal. If the stone has a larger size with no cracking, and if it has a black base color with green, red and gray clay, it is a grade one opal, Brehanu said.
Although Ethiopian opal has gained recognition in the opal market next to Australia, which is the world’s top producer, it has not received enough attention from the government so far, according to a geologist who lectures at the Geology Department of the Addis Abeba University.
“No one has conducted a comprehensive study to determine opal’s potential,” he told Fortune. “But devoid of petroleum discovery, thus far, opal might be the brightest hope for the country’s economic development.”
This is the volcanic rock located in Northern Wollo Zone, Amhara Regional State which most of the inhabitants mine the precious stone
Was this article helpful?4 people found this article helpful
Hi Richard that is a good question
Most Ethiopian miners are small operations with no large scale mining operations and the opals are spread over large field, so it is reasonable to expect more deposits will be found in these volcanic opal fields
There are 17 opal mining organizations with over 2,000 members
But now in august 2016 we have new problems with government intervention that is effecting supply of rough opal.
For every kilo of rough opal, the importer has to buy half kilo cut polished opals
But locals cannot cut opals and standard cutting is so low and its impractical policy
Plus, fact the cut opals are very expensive, and many opal buyers have rough opal in Ethiopia and can’t get the rough opal out due to exorbitant cost of cut stones
Some people have mentioned to smuggle the rough out. but unfortunately it is land locked country with wars in n Sudan and Somalia and unsafe passage in Eritrea so only Kenya is a safe route.
So it might be that the day’s cheap Ethiopian opals are over as there is export fees now to take kilo rough out
Government charges are now $1500 per kilo for top end rough opal and sliding scale for less expensive rough ..
and this is on top of the cut stones you have to buy to export the rough at unrealistic high prices
The ministry of mines also has to see the bank transfer before approval to export
At present there are many ant government demonstrations in Ethiopia and even Gondar which has opal mining areas
A massive demonstration against the government was held in Gondar on 31 July 2016 with ten thousand demonstrators, it is ethnic problems but also cries for democracy.
Political instability could affect mining and supply of opals from Ethiopia
In 2013 we had the debacle with government intervention and process went up and now we have government policy that is effecting export and many exporters are at stand still to find way around this problem but to date the situation gets worse each day
We have sent emails to ministry of mines in Ethiopia and the Ethiopian Embassy in Australia to clarify the government position but have received no reply to date.
The Ethiopian government does want to start value adding to the industry by cutting and polishing
But this idealistic policy is also doomed to failure like their previous policies.
For start it ignores the thousand opals cutters who enjoy cutting as hobby or passion all over the world and for professionals who cut for jewelry designs
Than the fact there is reason why Indian cutters are so good at commercial cutting that African cutters will never be able to cut same standard and quality and be able to compete so quick
There is no expertize to cut opals and I have seen half kilo of so called polished opals and they were low graded calibrated 7x5 and 8x6 opals with lot oil more than polish but were to low grade and unsaleable.
Government policies are effecting price and control of these opals so while production is STEADY other factors will effect the price for these opals