The Silk Road Heart Story

The Silk Road Heart Story: Launching Afghanistan’s First Gemstone Certification Lab, Improving the Lives of Locals, and Bringing Afghan Treasures to the World

By Emily Langhorne, INVEST Communications Specialist
Source:medium.com

Silk Road Heart, Afghanistan’s first gemstone certification lab and lapidary, will launch in June 2020, with support from USAID INVEST. The services provided by the lab will improve the lives of local miners and traders and allow Afghanistan to capture the true value of its gemstones.

Afghanistan’s Panjshir Valley is home to some of the world’s highest-quality emeralds.

By Emily Langhorne, INVEST Communications Specialist

For thousands of years, gemstones have played an important role in the Afghanistan’s culture and history. They have been mined and traded for use in jewelry, crowns, and other opulent objects. In ancient Afghan palaces, gemstones adorned the king’s rooms, and other civilizations likewise imported them for use in palaces, temples, amulets, and statues. For hundreds of years, the rulers of the Middle East — the sultans, shahs, and maharajahs of India, Persia, and Turkey — reveled in the beauty of emeralds and were a principal market for Afghanistan’s deep green beauties.

By the fifth century, artists in India and Afghanistan were crushing lapis lazuli to create pigments for their paints. The trend eventually spread to Italy, and thus the vibrant Afghan blue became a hallmark of European artwork from both the Middle Ages and the Renaissance.

Afghanistan’s children’s stories tell tales of magical gems while its love songs and poems use the varying colors and names of gemstones as the basis for many metaphors. Even today, jewelry is a must-have item for new brides in Afghanistan. The stones’ worth not only bestow security and prestige upon the bride, but, according to Afghan tradition, each gem holds certain powers, and it can change the wearer’s fate.

Recently, a new chapter in the history of Afghanistan’s gemstones has begun. The stones no longer have the potential to change only the fate of the wearer; instead, they have the potential to help change the fate of the country.

“The gems and mineral sector of Afghanistan has great potential,” says Ahmad Rahmani, CEO of Lapis Gems and Jewelry, a leading exporter of precious and semi-precious Afghan gemstones. “There is enormous wealth under the ground, most of it untapped, and if we can get this sector active, it can, by itself, strengthen the economy of the whole country.”

Data from the United States Geological Survey estimates the value of Afghanistan’s mineral resources at $1 to $3 trillion. Unfortunately, 90 to 95 percent of the country’s gemstones leave Afghanistan as rough, uncertified gems and enter gem markets in Pakistan, India, United Arab Emirates, and other countries. Because little to no value addition is being performed in Afghanistan, most of the stones’ value is being captured by other countries. Afghanistan has not had the means to provide certification and finishing services in-country, so it has missed out on capitalizing on the stones’ true world-market value.

However, Rahmani, along with three business partners from Afghanistan and the U.S., is about to change that.

Working with Mohammad Javad Rezabakhsh, an internationally-trained gemologist; Michael Peters, an American business man who specializes in employing blockchain technology in developing nations; and Mohammad Naser Ahmadi, an Afghan entrepreneur who has co-founded many well-known companies, Rahmani is preparing to give Afghan gemstones their due place in the world gem market.

Together, these four partners have collaborated with the United States Agency for International Development’s (USAID) INVEST initiative, which mobilizes private capital for better development results, to open the country’s first gemstone certification lab. Silk Road Heart Gemological Laboratory and Lapidary will provide identification and origin reports, rough stone sorting, and cutting and polishing services to Afghan miners and traders.

Left to right: Mohammad Naser Ahmadi, Michael H. Peters, Ahmadshah Rahmani, and Mohammad Javad Rezabakhsh, photographed with raw emeralds from Afghanistan, at a a shareholder meeting in Washington, D.C. (Photo: Nazia Salam, INVEST)

Like Afghanistan, Rahmani’s family has a history of trading gemstones. They’ve been in the business since the 1970s. Importing cutting-edge equipment from abroad, his father opened Afghanistan’s first modern cutting and polishing studio from which he exported lapis lazuli and emeralds to international markets in Europe and Asia. Rahmani grew up working alongside his father. The family had a jewelry shop on Chicken Street, a famous trading area in Kabul, and Rahmani worked with his dad in the shop, learning about the gem trade and forming a passion for the stones.

“My dad wanted to teach me something useful, and I found that working with gemstones made me happy,” Rahmani says. “I believe each type of stone has a power, and when I’m working with those stones, handling them, I feel [their power], and I’m happy and relaxed.”

Rahmani studied political science, served as General of the Afghanistan Air Force, and worked as a governmental official representing Afghanistan in Washington, D.C., but he held onto that passion for working with stones. When he resigned from his government position, he began operating businesses in multiple sectors, including gems and minerals.

“I have believed for many years that the formation of the lab inside the country is a crucial step for elevating this sector,” says Rahmani.

“Since 2015, I have been visiting labs in places like Italy, India, and Dubai to form connections and partnerships, and I’ve met with representatives of our embassy to stress the need for the formation of a lab in Kabul,” says Rahmani. “When I learned that USAID would support us in this cause, it was truly heartwarming news.”

Through INVEST, USAID is providing technical and financial assistance to facilitate the formation of the lab, including procuring equipment, finding gemologists, and marketing the lab domestically and internationally. Silk Road Heart, which will launch in June of this year, will phase in its service offerings, providing rough sorting and origin reports first and then adding lapidary services in October.

Afghanistan’s Gemstones: An Abundance of Quality, a Scarcity of Provenance

Afghanistan’s northeastern provinces are gem-rich. Blue stones are the pride of Badakhshan, which has mined lapis lazuli for millennia and, more recently, has begun extracting sapphires. For centuries, Jegdalek has produced rubies beautiful enough to have once been worn by Kublai Khan, and the region has increased its mining of pink sapphires over the 100 years. In Nuristan, a variety of semiprecious stones lay within the earth — tourmaline, kunzite, and aquamarine. And Panjshir Valley’s emeralds — the jewel of Afghanistan’s mining sector — are renowned throughout the world for their bluish-green color and inclusions, rivaled only in quality by Colombia’s.

The biggest hurdle for Afghan stones entering the world market is not their quality or availability but their provenance. As the awareness of conflict gemstones and “blood diamonds” has grown worldwide, consumers, especially those in Western markets, want to purchase stones that have been identified as ethically sourced. Many of the world’s most famous jewelry makers won’t even consider purchasing stones if their provenance and chain of custody can’t be guaranteed.

When stones illegally pass from country to country, proving an ethical supply chain from mine to market is nearly impossible. Because Afghanistan lacks an in-country lab that provides identification, certification, and value-added services, such as cutting and polishing, Afghan traders must take stones to other countries and often do so illegally.

“The smuggling of stones, especially to Pakistan, creates a serious issue that needs to be addressed,” explains Rahmani. “Because the traders have no other option for certification, cutting, or selling their stones here, they indulge in this illegal method. Once the stones are in Pakistan, they are sold as a commodity without an origin, and the Afghans selling the stones across the border do so at nominal prices.”

As a result, the stones’ true value is being captured in these other markets where they perform the value-added services, and Afghanistan does not benefit from the revenue generated by one of its most valuable resources.

The problem of stone smuggling also extends to the world market. Because they are superior to the emeralds of Brazil, Zambia, and China, Afghan emeralds could only be mistaken for Colombian. Many Afghan emeralds taken across the border to Pakistan are then illegally smuggled to Colombia where they enter the market as Colombian emeralds, increasing the value of Colombia’s emerald on the world market. Such nefarious activity hinders Afghanistan’s economic growth and undermines attempts to grow the reputation of Afghan emeralds on the world market.

“The main problem is that there has been war in Afghanistan for 40 years,” says Rahmani, “Before the war, buyers came directly to Afghanistan. There were nice shops and centers where they could buy gemstones directly from jewelers and dealers. Now, the buyers don’t come here, and visa and security protocol make it difficult for the dealers to travel to other countries. Buyers want a certificate that proves the quality of the items that a dealer has, but there is no place here for miners or dealers to obtain one. An Afghan dealer would have to spend five times the price of the certificate to travel to Pakistan, India, or Dubai and get it. My hope is that Silk Road Heart will become the first official place for all gem owners of Afghanistan to come to and get their stones certified by a credible establishment and that the lab will become a trusted place for everyone working in this sector. If so, it will play an important role in introducing the gems of Afghanistan to the international market.”

Silk Road Heart: From Mine to Market

As the first gemstone certification lab in Afghanistan, Silk Road Heart will be providing a valuable service to miners and traders. The lab won’t buy or sell gems; it will add value to them by identifying, certifying, cutting, and polishing the stones according to international guidelines. Certified and finished gems can be sold on the world market at competitive prices — unlike rough stones — so miners and traders can use the lab’s services to increase their profit margins.

Emeralds and other gemstones mined in Afghanistan

USAID is helping Silk Road Heart pay for top of the line equipment that will not only add to the professionalism of the lab but also help attract a world-class, internationally accredited gemologist to oversee its operations, the first of which will be providing rough sorting and origin reports.

Traditionally, Afghan miners and traders haven’t sorted rough stones. Instead, buyers purchase whole parcels by weight without differentiating the price based on the size, color, or clarity of the parcel’s individual stones. For example, two miners each have a parcel containing 3,000 carats of stones. However, one of the parcels contains 1,000 carats of top-quality stones, and the other has only 100 carats of top-quality stones. Regardless, both miners receive the same price for their bags.

The sorting of rough stones allows traders to better organize and grade their supply so that they can price parcels based on the quality of stones that they contain and thereby maximize the price per carat. The lab will train its employees to identify the markings of quality for each of Afghan’s major gemstones in the rough.

Each parcel, and by extension the stones within it, will have an origin report that identifies both the type of stone and where it was mined, providing evidence that the stones were ethically sourced. Silk Road Heart will document every point in the supply chain. Prior to being sealed, each parcel will be given an in-house ID number that indicates its source location. Gemologists can use inclusion patterns and chemical compositions to determine where a stone was mined, so they can check these parcels against field samples when creating the origin reports. If the seal on a parcel is broken, then traders and buyers know that its origin report may no longer be reliable.

Because the lab is working to meet the global demand for organized, tracked, and ethically sourced rough material, Silk Road Heart will not only document the chain of custody, but it will also only work with mines on an approved list created by Rahmani.

“From a young age, I accompanied my dad to meet different dealers around the country and visit the miners, and I still hold great relations with most of them,” explains Rahmani. “For now, the lab is only going to deal with miners and dealers that we know personally. These are people that we trust and have built business relationships with over decades.”

By working only with these mines, Silk Road Heart is ensuring that they partner with mines that empower locals with employment opportunities, forbid child labor, give back to families affected by conflict, and, most importantly, do not fund terrorists or insurgents.

Later, the lab intends to incorporate block chain technology into its origin reports. By providing locals with this technology and training them on how to use it, Silk Road Heart can teach miners to immediately register and photograph the stones upon finding them and then have traders use blockchain to log every transfer point in a stone’s chain of custody. This log creates a “digital passport” for each stone, which will accompany it from mine to market to home.

The lab will eventually expand its services to include in-house cutting and polishing so that traders can attain a higher profitability by not having to sell their stones to polishing companies in other countries, which make a margin of profit on rough to polished stones. By capturing that value in Afghanistan, the lab will help boost the local economy.

The Growing Demand for Colored Stones: Creating an Organized Sector from a Fragmented Supply Chain

The opening of Silk Road Heart coincides with a massive growth in the demand for precious colored stones. Over the past decade, consumer interest has been slowly shifting away from diamonds. By 2028, the global sales in rough colored stones is projected to increase by $8 billion, displacing diamond’s market share. Since 2010, the price of emeralds has increased by 500 percent.

As the demand for precious colored stones begins to outpace the demand for diamonds, Afghanistan has a tremendous opportunity to grow its economy, and Silk Road Heart can play an integral role in the success of its mining and gem sector. Currently, 90 percent of colored stones come from an “unorganized” sector where the fragmented supply chain results in irregular supply and quality. Afghanistan can provide stones of consistent quality and quantity, and Silk Road Heart could grow to become a one-stop-shop where these gems are polished and certified.

In addition, the United States is the world’s largest colored stone market — and emerald is the most dominant colored stone in its market — yet customers in the U.S. prefer purchasing stones with a disclosed country of origin in which the mining and trading benefits local communities. Rahmani and his partners have similar priorities: Silk Road Heart already plans to train local Afghans in skills such as sorting, cutting, and polishing.

“In the beginning, we’ll start with a small number,” says Rahmani. “And we’ll increase the workforce as we gain momentum. I hope in the near future we can employ and train younger people in this trade, giving them the tools necessary for success. Afghan families are often large and always close-knit, so helping one person has a considerable multiplier effect of helping many.”

Rahmani hopes that the lab can provide technology to local miners, many of whom live in villages in remote areas and still use traditional mining methods, such as dynamite, that damage the stones.

“The mining sector is operating with limited modern machinery, and work is done mostly by hand,” he explains. “I hope that down the road we will be able to provide local miners with the latest machinery so that they can do their jobs more professionally. We could also coordinate with and support existing government programs to train local miners on how to properly extract these gems from the ground using methods that do not damage the stone and improve the personal safety of workers.”

A local miner uses traditional methods while mining in the Panjshir Valley.

Silk Road Heart will also help empower Afghan women. Rahmani previously supported Sultan Razia, a nonprofit jewelry factory that only hired women. “I saw the change that working with jewelry made in the lives of these women,” he says. “I think it would be wise to include support to women and include them in our training programs. Over the last two decades, I have seen more and more women enter the jewelry making sector, and it is a group that has immense potential.”

The formation of Silk Road Heart is an important step in Afghanistan’s journey to becoming home to a world class gem industry. By having a complete, internal gem production cycle that includes mining, sorting, identification, certification and value-added services, Afghanistan can build the self-reliance of its gemstone and mineral sectors, boost its national economy, and create employment opportunities for people in rural and urban areas.

“Getting this lab opened and active will generate revenue for individuals, companies, and the government,” says Rahmani. “Its existence is a dream come true for me and for the people of Afghanistan.”

Categories: Afghanistan

Leave A Reply

Your email address will not be published.