Green Giants: Jade in B.C.

Jade is China’s national stone and seen as a bridge between Heaven and Earth. It’s the must-wear gem of the rising Chinese middle class. All of which makes some miners in northern B.C. – home to more high-quality jade than anywhere else on earth – very, very happy.

Jade is China’s national stone and seen as a bridge between Heaven and Earth. It’s the must-wear gem of the rising Chinese middle class. All of which makes some miners in northern B.C. – home to more high-quality jade than anywhere else on earth – very, very happy.

ON A RECENT VISIT to China’s western frontier, Kirk Makepeace, a Surrey-based jade entrepreneur, made an extraordinary discovery. In the city of Hotan, at the edge of the Taklimakan Desert, Makepeace noticed that the Uygur (Chinese Muslim) merchants were selling jewelry made of bright green jade. To the average tourist, this would be a singularly unremarkable fact. Hotan, after all, has been the world centre of jade since long before Marco Polo travelled the Silk Road. But Makepeace is no average tourist: he knows jade as well as anyone on Earth, and something about the translucent deep green of the gemstone prompted him to take a closer look. What he found delighted him. “All jade has a fingerprint,” he says, recalling the trip, “and I could see it was British Columbia jade they were selling. Imagine that! No way did I expect to see our jade in the Mecca of jade!”

What the merchants were doing – passing B.C. jade off as native Chinese jade – may not have been ethical, but they were inadvertently paying tribute to the excellence of a little-known homegrown product. In its quality and look, our B.C. stone passes for real Hotan jade – “the Stone of Heaven,” as the Chinese call it, which draws buyers to this Chinese market in droves. The “Hotan” jade bracelets (selling for three or four times the price they’d fetch in North America) are carved from B.C. jade because the Chinese have virtually exhausted their own supply.

Canny entrepreneur that he is, Makepeace said nothing about the deception; the people buying and selling the jade are, after all, at the extreme end of his marketing chain. For all he cares, the Hotan merchants can make any claim they want about the provenance of the stone they are selling. They are contributing, in their own way, to a promising Canadian niche industry.

Jade boulders near Dease Lake, B.C.; 11,000kg jade boulderWE ALL THINK WE KNOW JADE when we see it, but the word “jade” actually refers to two very different stones that look very much alike. China’s historic jade is nephrite, famous as the toughest stone on Earth and known for its rich resinous texture when polished. Nephrite is the jade that B.C. has in abundance. Its chemical structure is completely different from jadeite, found primarily in Myanmar (Burma). Jadeite is beautiful, and rare, and even though it’s a relative newcomer in the Asian jade trade (the 1700s) it became China’s pre-eminent gemstone over the past two centuries, and that’s at the root of the confusion between the two stones. (The Chinese use the word “yu” to refer to both kinds of jade.)

Myanmar jadeite is a $500-million-a-year business – 50 times bigger than the Canadian nephrite industry – but Makepeace says nephrite is poised to make a strong comeback because of its history and an ever-expanding Chinese middle class. Only the wealthiest Chinese can afford top-grade Myanmar jadeite: a natural-green bead necklace can sell for as much as $10 million. Nephrite, however, has comparable beauty and is much less expensive: a bangle sells in China for a few thousand dollars. “Jade is now becoming affordable for the very first time in the long history of China,” he says.

Even though he knows only a few words of Mandarin, Makepeace has a distinct profile in China. He’s a big, genial man more at ease in rough outdoor gear than a business suit, and his company mines more nephrite jade than any other (or any country, for that matter). While a commerce student at UBC in the 1970s, Makepeace took a summer job as a diamond driller and found his calling. Today he is CEO of the Jade West Group, a company with three mining sites in a 150-kilometre stretch of wilderness in northwestern B.C. The region boasts the richest known concentration of nephrite in the world, surpassing anything found in Australia, New Zealand, Russia, China or the half-dozen other countries with deposits. Jade West extracts about 200 tonnes of nephrite jade every year out of the mountains near Dease Lake and Smithers.

Jade traders in Urumqi, China That may not seem like much, but it’s nearly three-quarters of the world production and, in dollar value, roughly half the world market. (His closest competitor is Cassiar Jade Contracting Ltd., based in Watson Lake, Yukon, which extracts less than 40 tonnes annually.) Ninety per cent of the B.C. production goes directly to China in bulk form, arriving in containers in Hong Kong, mainland China or Taiwan, never to be identified by its place of origin again. Without a nationality, burnished by an Oriental mystique that requires little or no marketing, most of the nephrite finds its way into the hands of more than 100,000 Chinese carvers and then to markets throughout Asia – including the jewelry counters that Makepeace stumbled upon in Hotan.

Jade touches a deep vein in Chinese culture and belief, rooted in 5,000 years of history. “Jade,” says UBC archaeologist Zichuan Jing, “is associated with a certain type of power, individual power. Not only physical power but spiritual power. Sometimes we say jade has been treated as a bridge to immortality in the Chinese society.” It was the gemstone of royalty, with Chinese emperors supposedly speaking to the gods through holes in disks of jade. “One can put a price on gold,” goes a Chinese saying, “but jade is priceless.” Still, within B.C.’s $6-billion mining and exploration industry, the stone occupies such a tiny place that mining people scratch their heads and shrug when you mention it. Mention jade to the B.C. Mining Association and you draw a blank. That’s no surprise. After all, it generates barely $10 million in annual revenue, it has few if any industrial uses, it’s not a status benchmark like gold or diamonds in the West and known deposits of high-quality nephrite are scarce. It’s only the Chinese obsession with it, and the staggering growth of Chinese consumerism, that makes it worthy of attention.

Because of an accident of geology, we have an almost limitless quantity of China’s national stone – though getting that stone out of the ground is another matter. Diamond may be the world’s hardest mineral, but jade, thanks to its unique interlocking fibre structure, is the toughest. “Hit a diamond with a hammer,” says Makepeace, “and you end up with a lot of little diamonds. Hit nephrite jade with a hammer, and the hammer will bounce back and hit you on the head.” This toughness makes it expensive to mine: about $8,000 to $10,000 a tonne. Dynamite would damage the precious stone, so it must be painstakingly carved out of the mountains, the boulders cut with diamond-studded wire and diamond-studded saws. The jade boulders are then transported 100 kilometres over rough terrain in massive trucks to the nearest highway and then on to the village of Dease Lake. The mining season lasts only three months in summer; the rest of the year it’s either too cold or too snowed in to extract and transport the stone easily. All-weather mining would increase the cost exponentially.

About a fifth of the extracted nephrite jade is clear and pure enough for the high-grade jewelry that Chinese buyers are looking for. Once a year, usually in October, the Chinese buyers flock to the Jade West lot in Surrey to haggle over the best pieces. Recently, I visited the lot and met Jerry Liu, a buyer from Shenyang, and his brother/translator Nathan. Jerry was struck by the sheer quantity of the green stone scattered around the yard. “It’s beyond the Chinese imagination to have jade of such quality and in such unlimited supply,” he said, shaking his head. “It’s like a small mountain of jade. If we had such a supply in China, we would use up every bit of the stone. Here you have so much that you can take out the best part and throw away the rest.” (The Chinese believe, mistakenly, that we have so much nephrite that we can afford to waste it.) Makepeace walked alongside, spraying the jade boulders with jets of water to bring out the brightness. “There’s a Chinese expression: it’s not jade until it’s polished,” he said. He held a small flashlight against the stone, to demonstrate its translucency. Jerry and Nathan were clearly impressed, but they kept their enthusiasm in check because the negotiating was about to begin.

While jewelry is the marquee use of nephrite jade (the high-grade stuff goes for up to $100,000 a tonne, once passed through various middlemen and slapped with import duties), lower-quality jade has a host of other uses – though none quite as profitable. Large blocks of nephrite are carved into supremely detailed jade sculptures for collectors. One of the most stunning examples, called Emperor’s Sunrise, was carved out of a near-flawless five-tonne Jade West boulder by B.C. sculptor George Pratt. It was on display at the B.C. Canada Pavilion during the 2008 Beijing Olympics. The largest piece of nephrite jade ever found, a 152-tonne boulder nicknamed Big Papa, is from B.C.; it was valued at more than $1 million and was broken up for ornamental carvings in China. Dealers also grind jade into fine powder and use it as an ingredient in Chinese medicines promising physical harmony and longevity. (Whether it does anything of value is dubious.) And jade is also made into the most expensive building tile on the market, with one-inch-thick tiles, thought to be almost unbreakable, selling for as much as $200 a square foot. The Chinese and Koreans even carve nephrite into beds and pillows that are meant to promote good health.

ON THIS SIDE OF THE PACIFIC, jade has an esoteric history. Carved out by glaciers and found naturally along riverbeds, it was used for centuries by First Nations as a sturdy stone for axes, knives and other tools. Jade tools dating back 4,000 years have been found at Salish sites in B.C.’s Cariboo region. But it wasn’t until Chinese labourers came to Canada in large numbers in the early 1800s that the nephrite found its market as an ornamental item. Railway workers picked up chunks of the green stone along the Fraser River, marvelled at its quality and shipped it back to China in the coffins of dead labourers.

Once the railway was built and the Chinese workers returned home, interest in the nephrite abated. An entire century passed before major deposits were found in northern B.C. in the early 1970s, but with China closed to Western exports there were no natural markets. The industry depended on the souvenir trade: Canadian handicraft carvers creating jade bears and other semi-precious collectibles for tourists. “Here we were,” says Makepeace, “with an incomparable source of jade – a mineral that had a traditional value at one time greater than gold – and what were we doing with it? Making souvenir trinkets.”

Still, Makepeace was a believer in the possibilities of the stone, and so in 1981 he founded Jade West. Over the next 15 years, he bought and consolidated leases to control most of the province’s major nephrite deposits: the Ogden Mountain mine near Smithers and the Kutcho Creek and Polar mines near Dease Lake. He and a small group of partners would eventually invest $5.5 million in the mines and new infrastructure. (He remains the largest shareholder.) Jade West began turning profits in year one and moved into high gear when China opened up its markets to international trade in the 1990s. But there was still competition from the far more plentiful (and highly valued) Myanmar jadeite to contend with. A breakthrough came only a few years ago when the Chinese government announced it would be using green nephrite jade in the manufacture of its 2008 Olympic medals. Makepeace says recognition of the stone as part of China’s heritage was an instant boon to B.C. “They wanted [nephrite] jade,” he says. “It’s part of their birthright.”

And it’s a birthright the Chinese would dearly love to control. Makepeace says he gets a lot of inquiries about his mines from interested buyers in mainland China. Even the Chinese government, through the China National Arts and Crafts ministry, has sent out feelers. “After all,” he says, “China has more than 100,000 carvers; we’re a source of their stones, we’re a part of their future and their economy.”

Other mining experts aren’t so sure that the Chinese zeal for nephrite will persist as the Olympic connection fades. And they’re not as sanguine about the Chinese economy rebounding any time soon. Still, Gavin Dirom, president and CEO of the Association for Mineral Exploration B.C., says that jade mining – while having a “very, very small footprint” in the province’s mining economy – is less sensitive to the market fluctuations that affect other commodities.

“It’s such a unique product, it has a lot of value-added appeal and it has a social connection,” says Dirom, referring to the Chinese fascination with the stone. As such, he thinks there is a good possibility for growth over the long term for jade miners such as Jade West. Costs of extraction, however, will increase. Ernie Hatzl, the manager of Cassiar Jade, says that in earlier years the jade boulders were just lying around waiting to be collected, but today “the easy stuff is gone and our mining is getting harder.”

Makepeace, while confident about future prospects, allows that B.C.’s nephrite industry needs some serious investment if it is to meet its potential. Jade West only has a handful of employees, and Makepeace contracts out his extraction work. Unlocking thousands of tonnes of nephrite from the mountainous wilderness will require heavy equipment, manpower and infrastructure. The first thing that’s needed is a good access road to the mines.

“What is the future? Nephrite will be a much bigger part of B.C. industry,” says Makepeace. “We’re looking at mines that could be comparable to the diamond infrastructure in the Northwest Territories, to supply jade to China. There’s a great potential to expand into a niche industry, and it’s something we can take pride in as being completely ours.”