Anti-junta forces control profitable gemstone mines after taking Mogok from Myanmar military

The military and connected businessmen are at risk of devastating losses after anti-junta fighters captured Mogok, Mandalay Region this week, putting most of Myanmar’s gem-producing land under anti-junta forces’ control. The Ta’ang National Liberation Army and its allies now control the gem mines in and near the town, having captured the territory just under a month after reinitiating a large-scale offensive against the military dubbed Operation 1027 and seizing swathes of territory from junta forces in northern Shan State and Mandalay Region. Although Mogok Township is in Mandalay Region, it has strong historical ties to northern Shan State and protrudes into it on the map of Myanmar, sharing borders with northern Shan State to the north, south, and east. The TNLA, which primarily operates in northern Shan State and concentrated most of its forces there during the first phase of Operation 1027, began fighting for control of Mogok Township almost immediately after announcing the resumption of the offensive in late June. According to a former administrative official from Mogok, who spoke with Myanmar Now on condition of anonymity, the fall of the town to anti-regime forces would entail the loss of extremely lucrative industry and vital revenue source for the military council and its associates. “The defeat in Mogok means an enormous loss for the military council, since they were getting huge amounts of income from the crony businesses mining there,” he said. According to a gemstone merchant in Naypyitaw, employees of the Myanma Gems Enterprise and other regime-operated entities based in Mogok had fled en masse to Naypyitaw at the height of the recent battles for control of the town. The military’s takeover of Myanmar’s lucrative gemstone sector From the late 1990s, control of ruby and other gem mining in Myanmar has largely been in the hands of the military-owned conglomerate companies Myanma Economic Holdings Limited and Myanmar Economic Corporation. Some of Myanmar’s wealthiest businessmen such as KBZ Group founder Aung Ko Win and Ruby Dragon Jade and Gems Company owner Nay Win Tun have also been involved in gem production. Local civilians greeting the TNLA and allied anti-junta forces in Mogok. The British investigative organisation Global Witness estimated in the 2021 report “Conflict Rubies” that the gem industry’s output in Myanmar between 2014 and 2017 had a value of US $346 to $415 million per year, or between US $1.73 and 2.07 billion if the estimates included smuggling and illegal trade. The most expensive single ruby in the world—which sold for more than US $30 million at auction in 2015—was mined in Mogok. Evening in Mogok (Wikimedia) While a relatively small mining area produces gems in Monghsu, northern Shan State, most of Myanmar’s gemstones are produced in Mogok’s mines. Before 1990, Mogok locals owned and worked these mines for centuries. The military dictatorship that arose following Myanmar’s 1988 Uprising—led by council secretary General Khin Nyunt, minister of electricity and metals General Maung Maung Khin, and regional commander of Northern Shan state General Tun Kyi—started to permit mining by private companies in Mogok. A 4.91-karat ruby mined during Than Shwe’s reign Myanmar Now obtained concealed records documenting the practices and dealings in gemstone mining during the Than Shwe dictatorship, which showed how the state supervised the distribution of licenses mine and operate gem production businesses at 46 different sites in Mogok. The same military regime also established the giant MEHL and MEC conglomerates in the 1990s. According to Global Witness’s 2021 report, the military used them to take control of the most profitable mines in Mogok Township; transferring ownership of state-owned gemstone mines to the two giant entities and making it impossible to get a license to mine in Mogok without a connection to the military. As with jade production in Hpakant, Kachin State, the only way to obtain a license to mine for the precious gemstones in Mogok is through business owned by the military or its nearest associates. The entities Myanmar Ruby Enterprise, Thit Sar Pan, Da na Theiddhi Star, Du Won Star, Jasmine, Pone Nyat, Si Tra Star, and Thein Nhget Star all operate as subsidiaries of MEHL. “Private mining companies would take a fraction of the income and the military council would take at least twice that amount,” said an expert who took part in the Extractive Industries Transparency Initiative during the civilian administration of the National League for Democracy (NLD) party, before the 2021 coup. She added that locals could no longer work their own mines since the junta and its affiliates took them over, and that the impact on Mogok’s natural environment from the military-owned entities’ mining had been devastating. Gemstone market in Mogok According to the Global Witness report, the military operated at least 17 mines in Mogok as of 2021. Cronies take a share of the profits Associates of the military have also benefited from their total control of gemstone production. The Paddamya Naga (Ruby Dragon Jade and Gems) Company directed by Nay Win Tun was among the top ten companies—as measured by output and number of mining sites owned—in 2018, according to Global Witness’s report. Apart from his involvement in business, Nay Win Tun is a senior official in the Pa-O National Organisation and close associate of Aung Hkam Hti, the commander of its armed wing, the Pa-O National Army (PNA). The PNA, a Pa-O ethnic militia has been known to fight alongside junta forces since the 2021 coup. Nay Win Tun owns shares in three gemstone businesses in Mogok, a mine in Monghsu, and a gemstone cutting workshop in the junta’s administrative capital, Naypyitaw. “No one from Mogok was allowed to set foot near his mines when Nay Win Tun was in charge. He’s a very prominent tycoon in that sector. He’s selling gemstones in Naypyitaw at very low prices,” a Mogok resident said. Nay Win Tun (first row, left) seen with junta chief Sen-Gen Min Aung Hlaing and wife Kyu Kyu Hla at the house of Aung Hkam Hti, the head of the Pa-O National Organisation, in March 2023 (SAC) Global Witness also found that one of the mining businesses with the greatest number of licenced mines in operation, the Nghet Kalay Myar company, was owned by Kyaung San Shwe, the son of military dictator Than Shwe. According to an anonymous jeweller in Yangon, the NLD government stopped licence renewal procedures during its administration but still allowed mining. Following the civilian government’s ouster, there was a return to previous conditions that only allowed mining by military-connected businesses, he said. The expert who took part in the mining transparency initiative concurred, saying, “After the coup, the junta and their affiliates still owned the same number of mines; they just didn’t make that information public on websites.” “However, there are illegal mines in the forests, where miners pay taxes to local armed groups who allow them to mine for gems,” the Yangon jeweller noted. What lies ahead? While the unlicenced mining may continue, there are already plans developing less than a few days after the TNLA-led takeover concerning the ownership of the Mogok mines. Myanmar Now sent queries to TNLA spokesperson Lwei Yay Oo regarding the group’s plans to operate and manage gemstone businesses in Mogok, among other questions about their planned administration of the territory, but has not yet received a response. Gemstone mine in Mogok in early 2020 (Global Witness/MO) The publicly mandated, anti-junta National Unity Government (NUG) released a prospective plan in early 2023 to sell off 45 mines in Mogok Township. Gemstone producers remarked that a division of mines between the NUG and TNLA would have to be negotiated and closely monitored. Resistance forces in the NUG’s armed wing—the People’s Defence Forces—have been among the allies fighting regime forces alongside the TNLA in Mandalay Region and northern Shan State. According to the mining transparency expert who spoke with Myanmar Now, while the anti-junta forces’ takeover of Mogok may restore opportunities for local people to reclaim the mines, it may simply provoke the military regime to carry out airstrikes to destroy the mines and deprive their enemies of the revenue. In addition to the military and prominent businessmen associated with them, some mines are also owned by the United Wa State Army—Myanmar’s largest ethnic armed group by membership—which earlier this year proclaimed its neutrality in the fight between the junta, resistance forces, the TNLA, and other anti-junta ethnic armed groups.

Anti-junta forces control profitable gemstone mines after taking Mogok from Myanmar military

Having manoeuvred to take over Myanmar’s gemstone production in the 1990s, the military stands to incur enormous losses from the capture of the ruby-mining town of Mogok by anti-junta fighters

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