Vietnam is swarming with dozens of Thai gem dealers, some of them apparently involved in smuggling out the country’s coveted rubies. Meanwhile, gem industry leaders in Bangkok attempt to work out a legitimate deal with Vietnamese officials to buy the stones.

            The Vietnamese government, anxious to accelerate the country’s economy and in dire need of foreign exchange, is eager to auction off rubies from its newly-developed gem mines. Thai gem and jewelry traders, short of rough to supply their rapidly developing industry, are just as eager to buy.

            Perhaps it’s over eagerness that has both sides seeing red.

            The Vietnamese officials fault the Thais for smuggling, while the Thais point out that without the cooperation of corrupt Vietnamese officials, the smuggling would not be so prevalent. Adding to the corruption problem is a tangled bureaucracy, as impenetrable as the Vietnamese jungle.

            “We want to negotiate the rights to buy the rubies, but we don’t know who to contact—who has the real authority. That’s the essence of the problem,” said one member of the Thai Gem and Jewelry Traders’ Association (TGJTA).

            “The Thais are trying to get the same kind of deal with Vietnam rubies that they got with the Sri Lanka gueda.” Complained one US gemologist. He was referring to the monopoly Thailand enjoyed for several lucrative years over the gueda stone, which heat treatment transforms into valuable sapphire.

            Thais are not the only nationality eyeing the Vietnamese stones. Gemologists worldwide have acclaimed some of the samples which have managed to slip past the border as equivalent to the finest Burmese rubies.

            It was a Thai company that managed to forge the first deal after substantial quantities of rubies was discovered in Vietnam about four years ago. Aphichart Fufuangvanich, owner of Quality Color group, formed a company called BH Mining to enter a joint venture with Vinagemco, the sole gemstone mining enterprise operating under Vietnam’s Ministry of Heavy Industry.

            The mining concession covers 50 square kilometers in the rugged, almost inaccessible region of Luc yen, about 300 kilometers north of Hanoi. The mine itself lies in a valley of Hoang Lien Son province, just 75 kilometers from the Chinese frontier.

            Anant Salwala, senior president chairman of the TGJTA, was invited to Hanoi to help organize an international ruby auction. In mid 1990, BH Mining held a Bangkok press conference to announce plans for the sale of 225 kg of Luc Yen material by competitive bidding.

            But after three postponements, the auction was cancelled indefinitely.

            Reliable sources report the reason the auction floundered in that most of the top grade rough mysteriously disappeared from the vault in Hanoi where it was stored. Exactly where the material went has never been revealed. The Thais then proposed a scaled-down auction, with only Thai companies to partake in the commercial quality rough that was left available.

            In mid-April, Mr. Anant announced in the Bangkok media that the “mini auction” was set for May. The Vietnamese apparently re-thought this proposal, however, and the ruby sale was once again cancelled.

            It was finally agreed by all parties that the auction—whenever it is held—should be open to buyers worldwide. The latest word is that Vietnamese officials will attempt to provide enough high-quality rubies for an international auction by cracking down on smugglers an confiscating the material.

            Many believe that the main reservoir of Luc Yen has yet to be tapped, since most of what BH Mining is producing comes from alluvial deposits. Hence, a substantial number of illegal digging operations have started in the area.

            Smuggling of Luc Yen ruby rough into Thailand has been intensifying the past year. Some sources estimate that up to 150 Thai smugglers are operating in Vietnam at any given time.

            The increase in ruby smuggling has slowed gold smuggling from Vietnam through the Thai-Laotian and Thai-Cambodian borders. Previously, large amounts of Vietnamese gold traveled these routes, but now Thai smugglers are using the gold to pay for the more easily transported ruby rough. The smugglers reportedly use specially-made PVC containers the size and shape of large marbles to hold the rubies.

            To obtain the rough, the Thai smugglers first strike deals with corrupt Vietnamese officials in Hanoi. Vietnamese counterpart.

            This rampant smuggling is one factor that reportedly led to problems between BH Mining and its Vietnamese counterpart.

            On 14 May, the Thai Cabinet approved the opening of formal economic cooperation between the governments of Thailand and Vietnam. The Cabinet authorized Thailand’s Foreign Minister Arsa Sarasin to sign two agreements with his Vietnamese counterpart: one to set up a joint economic commission to explore means to expand trade between the two countries, and another to protect Thai investors in Vietnam and vice-versa.

Long-awaited auction may come off in July

            The long-awaited auction of Luc Yen ruby rough may take place in July, according to the latest information. Although no definite dates were set at JewelSiam’s press time, the auction as planned would last four days and take place in Hanoi.

            The Thai Gem and Jewelry Traders’ Association, in conjunction with BH Mining, will announce the auction in Thai and foreign newspapers. Visa applications will be processed by Vinagemco, the Vietnamese mining agency, through various Vietnamese embassies.

            For more information, contact the Vietnamese Embassy in Bangkok. Tel: 251-7201, Fax: 252-6950.