Jammu and Kashmir government has failed to exploit the Sapphire treasure of the state due to lack of strategic mining and its failure to attract private partners for investment to extract the mineral on joint venture.

Situated at the height of 4327 mtrs and stretched along an area of 116 km in Padder area of Ishtar district, the Sapphire mines are estimated to contain Sapphire worth Rs 700 crore. The National Remote Sensing Agency (NRSA) Hyderabad conducted satellite imagery a few years ago and confirmed Sapphire reserves worth Rs 1 billion.

These prized Sapphire mines were leased out to the government owned JK Minerals Ltd (JKML) in 1963 for its extraction. The extraction was stopped by the corporation in 1971 and later restored in 1998, but so far no major breakthrough has been achieved in this regard.

In absence of modern drilling technology and facilities, The JKML continues to operate the mine on small scale and extract the raw mineral on hit and trial method restrictedly every year.

During last three years, JKML has shown a steep decline in annual extraction of raw Sapphire, known as corundum, leading to low revenue generation on its sale in open auctions in International markets.

According to Economic Survey Report, 2013-14, the JKML recovered 8820 grams of sapphire in 2011 which was reduced to 4520 grams in 2012 and 2212 grams in 2013, while the corporation collected Rs 82.29 lakh by auctioning 5799 grams of sapphire in 2011 and Rs 43.28 lakh in 2012 by auctioning 4281 grams of extracted sapphire. In 2013 no such auctioning was done by JKML.

According to report, in its first auction in 2008, JKML had collected Rs 1.32 crore against the auctioning of 11.5 kgs of corundum.

In 2010, the recovery of conundrum included unique piece of 63.60 gms crystal and another piece of 13.13 gms for which the expert team of M/s. NMDC, has opined that these are likely to fetch the price in crores, provided these are put in International auctions and markets.

On May 19, 2004, a single Sapphire which was smuggled out of the state via Jaipur-Mumbai-Bangkok-London was sold for $1.50 M at Geneva.

According to Abdul Majid Bhat, former General Manager JK Minerals who is a world-renowned Sapphire specialist, the state’s Sapphire is perceptible on account of its peacock neck bluish colour that provides it monopoly among other Sapphires of the world.

However, with JKML running in loss for last several years, it is hard for department to create resources to carry out the sapphire extraction on scientific lines.

“To carry out its extraction in scientific manner on large scale needs lot of budget, but the corporation is running in loss for last three years so it sends its team occasionally to carry out extraction on small scale,” said JKLM official.

According to official figures, the corporation has recorded a loss of Rs 77. 42 crore; in 2011-12 the losses went up to Rs 84.78 crore; and in 2012-13 the loss was recorded at Rs 85.57 crore.

The JKML has been paying a huge sum on preservation and security of the gems for the past six years and the officials fear that the costs incurred on security and maintenance have exceeded the actual cost of the gems.

Mining experts criticize the mode of operations of the concerned department. “The process has to be completed between July 1 to September 10. The concerned department undertakes mining but defers collection of the precious stones for unknown reasons. They expose the gems and leave. The precious stones are later collected by the smugglers who dare the inclement weather and the difficult terrain”, they said.

According to the JKML official, for commercial exploitation and to carry out the extraction on joint venture, the corporation floated tenders in 2005 and 2007 to attract the attention of Indian and global companies interested in its extraction.

“Some foreign companies were later shortlisted by the corporation also, but there was no forward movement by the government in this regard,” said an official.

Last year in April, Minister for Industries and Commerce, Sajjad Ahmed Kitchloo said that the corporation has issued fresh global tender inviting expression of interest from parties with expertise in mining, planning and exploration to exploit the sapphire in joint venture.

“A fresh global tender has been floated to tap the potential of high-grade and world-famous sapphire (mined) in Kishtwar belt of the state,” Kitchloo said.

However, the official said that it did not materialise.