Sri Lanka has natural resources of gemstones "in all the colors of the spectrum" – emeralds and diamonds being the exception – and a thriving colored gemstone industry, Ms. Deershika Ranatunge, Assistant Valuer/ Gemologist at the Sri Lankan National Gem and Jewellery Authority tells the Israel Diamond Institute.

In an interview at the Kimberley Process plenary meeting in Jerusalem, Ranatunge explained that colored gemstones – including sapphires and rubies – are both mined and processed in Sri Lanka, which by law exports only polished stones.

According to Ranatunge, Sri Lanka is also home to a large jewelry-making industry.

The country has also processed diamonds for the last 20 years, importing rough diamonds (at no tax) from major exporters like Israel as well as from diamond producing nations. Sri Lanka's diamond cutters – a lower-cost labor force than that of India, for example – then process the rough diamonds and export them. Most of the diamonds processed in Sri Lanka are of a relatively small size, Ranatunge tells the IDI.

Sri Lanka levies a 1% export tax on diamonds given the high volume of the country's diamond exports.

According to Ranatunge, most of the diamond factories in Sri Lanka are foreign owned, the result of an initiative by the Board of Investment (BOI), an international organization that invests in industry in developing countries.

Sri Lanka is a new member of the KP. Ranatunge notes that the National Gem and Jewellery Authority, in addition to addressing industry issues, is also entrusted with implementing the KP principles in Sri Lanka and fulfilling all the KP functions in the country.

When asked if Israeli diamond companies would be welcome to do business in Sri Lanka, Ranatunge replied yes, of course.