How China's hunger for green stones fuels Myanmar's civil war

The jade-smuggling trade is growing in Myanmar, exposing how the global hunger for precious minerals can finance and fuel conflict.

The mountains of Hpakant in northern Myanmar have been gouged into a honeycomb of scars.

Men carrying pickaxes swarm over heaps of earth dumped by mining companies, hunting for rocks that could be worth a fortune.

Hpakant holds the world's most valuable jade.

For about a decade, Aung Kyaw drove dump trucks at the mines.

The wages were better than anything he could earn at his farm in central Myanmar.

"I needed to pay for my children's schooling and health care for my mother," Aung Kyaw, who asked to use a pseudonym because of fears for his safety, said.

But when the military seized power in Myanmar in a coup five years ago, the relative calm in the area came to a halt.

Locals, artisanal miners and community groups turned their focus from the mines to protesting the ousting of a democratic government, while the ethnic guerilla force, the Kachin Independence Army (KIA), fought the military.

"When heavy clashes broke out, Hpakant became completely unstable," Aung Kyaw said.

As the military cracked down on mass protests, mining operations gradually resumed.

Aung Kyaw returned to Hpakant but he was out of work.

Many small-scale Kachin miners could no longer get permits or were pushed off their land as the military and KIA seized control of more mining land.

But he came across a Chinese businessman looking for a driver who knew the local terrain well enough to take jade north by truck to the border.

The pay was about 700,000 kyat ($477) a trip, more than double his previous mining wage.

He said despite the risk of being killed: "It was a solid income, that's why I agreed."

Jade is mostly sold to buyers from China, where it is thought to symbolise purity of spirit and bring good luck.

There are two types of jade: nephrite, which is sourced from numerous countries, and the fine-quality jadeite that comes primarily from Myanmar and can reach prices higher than some diamonds due to the rarity of its finest grades.

Since the coup, more Chinese buyers have been travelling directly to the mines to identify raw stones to be smuggled out, miner Sai Myo Htwe said.

"Once they have collected a large amount, they hand them over to 'carriers'," he said, referring to smugglers.

Previously, some jade passed through established markets in Mandalay and the official emporiums in the country's capital, Naypyidaw, where stones could be taxed and auctioned.

Now, most stones are smuggled directly over the border to China via two main back roads.

Aung Kyaw and other Kachin locals described routes that avoided towns, winding through jungle with steep climbs, mud and boulders, and driving alongside active combat zones.

They said armed men ran checkpoints every 10 to 15 kilometres, some belonging to the KIA and others aligned with the military.

He said the operation was usually split into three legs, coordinated between several drivers and vehicles, with the last leg crossing the N'Mai River.

"While paying your way through checkpoints, if there are active clashes in certain areas, you have to stop wherever you are, and sometimes you even have to sleep overnight in the jungle and wait it out before moving on," Aung Kyaw said.

Drivers are sometimes ordered to deliver bribes, including premium liquor or parcels, without knowing what is inside, he said.

Last year Aung Kyaw was detained for three days.

He later learned that a regional commander was in dispute with his team's leadership.

Another driver came under fire in the jungle, surrendered under a white flag and was released only after explaining he worked for a Chinese carrier group, Aung Kyaw said.

His bullet-riddled vehicle had to be replaced.

"Even worse are the unpredictable threats, such as the danger of landmines, getting hit by heavy artillery shells, or facing air strikes," Aung Kyaw said.

Hpakant is a vast open-pit mining region, with satellite data showing new pits continually opening.

"The miners are literally moving mountains. The quantity of earth is quite staggering," said International Crisis Group analyst Thomas Kean.

In the first years after the coup, the military held direct control.

But two years ago, the KIA launched a major offensive, capturing large stretches of land along the Chinese border.

Fighting around Hpakant also intensified.

The mines are now divided between the KIA's political arm, called the Kachin Independence Organisation (KIO), and the military, with a contested zone in the surrounding areas.

A 2015 report from international investigative NGO Global Witness estimated Myanmar's jade production was worth as much as $US31 billion ($45 billion) a year, with 90 per cent of Hpakant-mined jade smuggled into China.

Under Aung San Suu Kyi's government, officials tried to reform the industry to curb environmental destruction, improve safety, limit the influence of the military and recover tax lost to smuggling.

In contrast, since the coup, jade sales at official auctions have continued, but remain opaque and no central body publishes production records.

"Myanmar's jade industry is somewhat of an unregulated free-for-all," the Global Witness report said.

"The industry is worth billions of dollars, but because it's all smuggled, we don't have a clear picture of what it is worth," Mr Kean explained.

"Controlling Hpakant is very lucrative. The biggest change since the 2021 coup has been the direct contest for territorial control, because controlling territory now means controlling the [unofficial] taxation."

Despite the KIA and military fighting for decades, they also cooperate to share jade profits, entrenching a system of corruption that enriches armed elites while denying local communities the benefits, according to the International Crisis Group.

The ABC tried to contact the Myanmar military and KIA's top commander but did not receive a response.

Chinese President Xi Jinping has periodically launched anti-corruption campaigns that have temporarily curbed large-scale illicit cash flows used by Chinese businesses to buy unrecorded Myanmar jade.

"The corruption crackdown in China really took the wind out of the market because jade was this store of value if you had a huge amount of cash and you wanted to convert it into something that was portable," Mr Kean said.

China's Foreign Ministry has said it is unaware of any allegations of Chinese companies' involvement in jade smuggling.

The wealth beneath Kachin's mountains has rarely translated into prosperity for locals.

Hand-pickers can spend days searching for jade and find nothing, leaving them with not enough money for food.

Many migrant workers sleep in cramped tents near unstable slopes, where landslides pose a constant risk.

Small mining plots run by Kachin families were once common.

ND Seng grew up in Hpakant and her brother still works in the mines.

"As a family we would go and look for rocks, and if we found one, we all shared the earnings," she said, using a pseudonym because of her fears for her brother's safety.

Since the coup, she said, some Kachin families have been pushed off their plots as conflict between the military and KIA continues, while many migrant workers have decided the safety risks are too great.

Kachin activist May Sabe Phyu said jade had brought more misery than wealth.

"The conflict is more severe. People are displaced again and again."

Seng Htoi from the Kachin Women's Association Thailand (KWAT) said the conflict had deepened a wider cycle of lawlessness, including a thriving drug trade.

Aung Kyaw said drugs had become so prevalent that he sometimes relocated from a boarding house to a local monastery, which was itself overcrowded with families fleeing air strikes.

Activists have called for a global ban on Myanmar gemstones.

"There is no way to buy jade from Myanmar and be sure it is ethically traded," said Min Tent, of Burma Campaign UK.

Justice for Myanmar has urged Australia and other countries to ban gem imports from Myanmar.

"Australia has still not taken any action to target the junta's revenue from natural resources," spokesperson Yadanar Maung said.

Unlike some countries, Australia has not imposed sanctions on the state-owned Myanmar Gems Enterprise (MGE) and it is legal to trade jade sourced from Myanmar.

The Department of Foreign Affairs and Trade did not comment on MGE but said it condemned the regime's "brutal and ongoing atrocities" against the people of Myanmar.

DFAT said Australia had sanctioned 21 individuals in Myanmar in response to systematic human rights abuses and the overthrow of democratically elected leaders, as well as five entities involved in funding the regime's access to weapons and jet fuel.

In the main jade market, China, there is no move to impose a boycott.

"Within China, there's not the same kind of activists and lobby groups, you don't have a 'Free Myanmar campaign'," Mr Kean said, citing China's restricted political environment.

"It's very hard to persuade people, you know, not to buy these products when there is that cultural attachment."

In Australia, gem dealer Wai Yan said he avoided buying jade from Hpakant and from government-run auctions where sales went to the military junta.

He said he also avoided buying from China for the same reason.

Mr Wai said his company, Mays Gems, instead bought gems from Yangon or Mandalay and "from smaller miners, the families that work around the big corporations".

"It's very difficult to source jade, especially from Burma, because of the political situation," he said.

And he said many customers were more concerned about whether their jade was genuine than about where it came from.

He believed it was possible to ethically buy jade from smaller miners and that his proceeds were not going towards the military.

Fiona Frith, international jewellery director at auction house Bonhams, said most jade pieces it handled came from China, and had been passed down through families with little information about where the stone was originally mined.

"We can't physically say where something is from by looking at it," she told the ABC.

She said Bonhams generally steered clear of jade that had a certificate stating Myanmar as the origin, particularly since the coup, putting it in the same category as ivory.

Australian-based Gem Rock Auctions is a marketplace for third-party sellers from around the world. It has several listings of gemstones from Myanmar.

CEO Ross Sedawie said most of the jade traded on the platform was from artisanal miners or had been in the market for a long time and they had travelled to Thailand to meet sellers and verify they were who they claimed to be.

He said believed it was possible to ethically buy jade from Myanmar from artisanal sellers, but that it was getting harder.

His business required verified sellers in Thailand and China to agree to conditions that a sale didn't benefit a military-linked company or other armed group.

However, ultimately, he acknowledged there was no way to be certain.

"That supply chain is just so hard to police. We just have to take it on face value," he told the ABC.

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