by Bridget Honan
Locals fear a lack of ruby exporters in Greenland could mean the country misses out on important tax money.
At the moment, with no ruby mining industry of it’s own, Greenland makes money from taxes paid by foreign companies like True North Gems.
But under current laws, these mining companies only need to pay taxes on their profits.
No free market to compare prices
Small scale mining activists fear that with the difficulties for small scale miners to export rubies, there is no free market to compare prices of rubies in Greenland.
This means when True North Gems receives their license for exportation next year, they could purposely undervalue their gems in order to minimize the amount of taxes they need to pay.
Niels Madsen, who worked with True North Gems when they first began exploring Greenland in 2005 says at the time they were finding rocks worth $950 per carat.
â€œThen all of a sudden the most expensive rock was $2.83 per gram. They started saying that it cost less than $3 per gram per rough.â€
Rough rubies gain value elsewhere
While the rubies could be worth very little in the rough, when they are cut and polished, they can increase significantly in value.
But without a cutting and polishing industry in Greenland, the country wonâ€™t see that value in tax money.
â€œIt’s going to be very expensive to start up a cutting workshop with lots of machines and a lot of Greenlanders,â€ says Mr Madsen.
â€œIt’s going to be cheaper to send the stuff to Thailand. They can buy and sell to themselves. And then they’re going to make all their profit in Thailand,â€ he says.
In 2007 True North Gems opened an office Thailand which they were going to broker all the gemstones through. Thailand is one of the main hubs of gemstone procurement and jewelry manufacture.
But CEO of True North Gems Nicholas Houghton says that it’s a matter of having the rocks cut and polished by people with the skills to do so.
â€œThey tried to do diamond polishing in Canada, that proved to be very unsuccessful. Corundum is a very difficult to get the polishing and faceting correct. It’s a very highly skilled job. And it’s a skill set that you have to go away and educate yourself to learn these things.â€
â€œWe will work with local people, wherever possible if we can, to help them grow an industry,â€ he says.