Photographer: Joseph Sywenkyj for Bloomberg Businessweek

In Ukraine’s ‘Klondike,’ a Rush for Stolen Gems

Despite a ban on mining, an illegal trade in amber is flourishing.

Just outside the western Ukrainian village of Kukhitska Volya, the dense forest turns into a moonscape of mud-filled craters and mutilated trees. The locals call the place a “Klondike,” an illegal mine where hundreds of men and women dig amber—the fossilized resin of trees that died 40 million years ago—out of the swampy soil. Using gas-powered pumps, the miners inject water 10 to 20 feet into the ground, dislodging dirt and the occasional load of honey-hued gems. As word spreads of the approach of an unfamiliar car, the workers hastily load their equipment onto trucks and speed off. In less than five minutes, everyone is gone.

Wildcat reward.
Wildcat reward.
Photographer: Joseph Sywenkyj for Bloomberg Businessweek

The site is one of scores of Ukrainian amber fields where wildcat prospectors dig up the stones. The State Geology Committee estimates the country has as much as 15,000 tons of amber buried in its western forests, and with virtually no law enforcement—and what participants say are corrupt local officials—illegal mining has supplanted more expensive legal methods of extracting amber. Authorities say the illicit trade costs Ukraine hundreds of millions of dollars a year in lost taxes as well as untold environmental damage. “The land is ruined,” says Mykhaylo Boyarkin, the head of the geology committee. “Nobody will want to invest here.”

Recent clashes between police and the increasingly brazen wildcatters have spurred President Petro Poroshenko to send special troops to tackle the trade. But with most of the mines in remote rural areas accessible only by potholed dirt paths and watchful locals ready to sound an alarm at the first sight of strangers, there’s little the police can do. “It’s almost impossible to catch them,” says Oksana Saychyshyna, a police officer in the region of Rivne, where many of the most destructive amber mines are located. “Even if we find out where they’re working, by the time we get there they have plenty of time to run into the woods and hide.”

A craftsperson sorts through amber at a workshop at the state enterprise Burshtyn Ukrainy (Amber Ukraine).
A craftsperson sorts through amber at a workshop at the state enterprise Burshtyn Ukrainy (Amber Ukraine).
Photographer: Joseph Sywenkyj for Bloomberg Businessweek

Locals see the mines as the only way to make a living. The prospectors work in teams of about a half-dozen people who operate a pump and share the booty. Svitlana, a 45-year-old former kindergarten teacher, has been working at the Klondike for more than a year. Bundled in khaki work clothes, she says her monthly wage of 1,200 hryvnia ($48) gave her no choice but to quit her day job. “Here I can make in one day what I was earning in a month,” she says, skimming the muddy waters with a net in search of loose amber stones. Although she’s afraid of drowning in a mud hole, Svitlana says she won’t go back to her old job. “The state can’t take care of us, so we have to take care of ourselves,” she says. Svitlana, who declined to provide her family name, says police offer 12 hours of “protection”—the right not to be harassed while they race to extract amber—for $500 per pump. The police didn’t respond to requests for comment.

The trade has taken off in the past three years as exports to China have soared, with prices up roughly fivefold, to as much as $5,000 per pound, miners say. The buyers strike deals with locals in their homes, says Ihor, a burly man dressed in army fatigues with his face covered by a green-knit balaclava, who helps organize the mine. “We have all kinds coming here: from Kiev, from Poland, even from China,” he says.

An amber necklace made by craftspeople at Burshtyn Ukrainy.
An amber necklace made by craftspeople at Burshtyn Ukrainy.
Photographer: Joseph Sywenkyj for Bloomberg Businessweek

The illegal mining damages many of the stones and depresses prices, ultimately hurting the prospectors, says Dmytro Tiaglii, director of Burshtyn Ukrainy, the state-controlled amber producer. Water extraction cracks the amber, reducing its value, and miners typically recover less than three-quarters of a deposit, he says. The legal excavation method of carefully removing layers and sifting the soil with sieves can yield almost all of the stone in larger pieces. Tiaglii says his company, which polishes and finishes the stones but isn’t permitted to mine, has had trouble finding enough supplies and now even imports some amber from Poland. With virtually no legal mining in Ukraine, his artisans have left for more lucrative work, either with the illegal miners or across the border in Poland.

Oleksandr Vasiliev
Oleksandr Vasiliev
Photographer: Joseph Sywenkyj for Bloomberg Businessweek

Many prospectors say mining should be legalized and that they would pay taxes as long as most of the money stayed in their region. “What I want is for people to have little businesses where they can mine amber legally,” says Oleksandr Vasiliev, a former illegal miner who serves on the regional council in Rivne. In the meantime, the miners—and their profits—have started to supplant the state. They organized a collection for wounded soldiers, built a playground in a local park, and funded the construction of a church whose gold and blue onion domes shine proudly above a nearby village. There’s still scaffolding inside, but Father Roman, the young priest in a black robe who oversees the construction, says he hopes to see it finished by the end of the year—“if the boys help.” If, that is, the amber miners chip in.

The bottom line: Illegal amber mining in Ukraine is costing the state treasury hundreds of millions of dollars a year in lost taxes.

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