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Cablegate: No Sales of Kenyan Rubies to Burma

R 050903Z DEC 08
FM AMEMBASSY NAIROBI
TO SECSTATE WASHDC 7820
INFO USDOC WASHDC 3120
AMEMBASSY ANTANANARIVO
AMEMBASSY BANGKOK
AMEMBASSY BEIJING
AMEMBASSY COLOMBO
AMEMBASSY DAR ES SALAAM
AMEMBASSY DUSHANBE
AMEMBASSY HANOI
AMEMBASSY KABUL
AMEMBASSY KATHMANDU
AMEMBASSY LILONGWE
AMEMBASSY LONDON
AMEMBASSY MAPUTO
AMEMBASSY NEW DELHI
AMEMBASSY PARIS
AMEMBASSY RANGOON
AMCONSUL HONG KONG

UNCLAS NAIROBI 002722


STATE FOR EEB/ESC/TFS JOHN MARSHALL KLEIN, EAP/MLS LAURA SCHEIBE,
AF/E, AND AF/EPS

COMMERCE FOR BECKY ERKUL

LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: ETRD EMIN ECON PREL PGOV PREL EFIN BM KE
SUBJECT: NO SALES OF KENYAN RUBIES TO BURMA

REF: STATE 127059

1. Summary: According to three senior Ministry of Environment and
Mineral Resources officials, Kenya does not export rubies to Burma.
End Summary.

2. In separate December 4 meetings with Kenya's Commissioner of
Mines and Geology Lojomon Biwott, acting Chief Geologist Shadrack
Kimomo, and Warder of Mines Evans Osumo, econ specialist learned
that Kenya does not export rubies to Burma. According to these
three senior Ministry of Environment and Mineral Resources
officials, over 90% of all Kenyan gemstones are exported in raw form
to India, China, Thailand, Europe, and the United States. Kenyan
rubies are not exported to Burma, which is viewed as a major
competitor with better quality gemstones. Most of the processing
and polishing of Kenyan gemstones are done in India and Thailand;
the refined rubies are then re-exported to other countries.

3. Biwott and his Department of Mines and Geology colleagues
emphasized that Kenyan government agents inspect and seal all
exports of precious gems, issue certificates of origin, and collect
income and royalty taxes. Kenya supports the Extractive Industries
Transparency Initiative and the Kimberley Process certification
scheme but is not a member since it does not have diamonds.
Moreover, given Kenya's limited mineral base (mining earned the
country $200 million in 2007), the government finds the scheme too
expensive to implement. Kenya is a member of the Inter-Governmental
Mining Forum, a voluntary organization of 42 countries involved in
promoting sustainable mining.

4. The Kenyan government is not involved in ruby mining. The
gemstone sector is dominated by many small scale miners and few
mechanized miners. Ruby gemstone mining in Kenya took off in the
1970s when American geologist John Saul discovered a major site in
the Mangare Swamp section of Tsavo National Park near the southeast
border with Tanzania. Tsavo remains the major ruby mining area in
Kenya. Other promising ruby deposits were found in West Pokot
(2001) in the vicinity of Lakes Baringo and Bogoria, the Waseges
River valley (2002), and the Simba area (2205) southeast of Nairobi.
The company Saul founded, Rockland Kenya, Ltd., is the biggest ruby
producer in the country. Other ruby mining companies are Baringo
Stones, Equator, hard Rock, and Aqua. After dipping to 2,310 kilos
in 2003, ruby production has surged the past three years from just
over 5,000 kilos in 2005 to nearly 9,000 kilos in 2007. The
industry, however, earned less than $1.5 million in 2007.

RANNEBERGER

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