Tanzania's Tanzanite Industry in crisis

By Paul Ndiho
February 1, 2009
Gemologists say that tanzanite is ten times more rare than diamonds, and the precious stone is found in Tanzania. But it will probably be mined to depletion by the year 2016. VOA'S Paul Ndiho has more:

Discovered 40 years ago in Tanzania, tanzanite is found in the Merelani near Mount Kilimanjaro, the world's biggest mine for the stone.
Most of the gems are exported to Europe and the U.S. for processing, an export that is worth about 20 million dollars every year. But tanzanite prices have fallen dramatically, according to Zane Swanepoel, managing director of Tanzanite One. "The world financial crisis seems to have taken a turn and tanzanite being a luxury item has followed suit, we are working extensively at trying to bring the price of tanzanite up we know that we are the biggest single player within the tanzanite organization so people look at us as being the driving engine to start bringing the price up."
Tanzanite One's recovery plan targets African, Asian, American and European markets. Before foreign investors were granted mining concessions in 2005, the industry was unregulated. Small scale miners had the monopoly and worked in dangerous conditions, with many selling the gems on the black market. Modestus Maembe is concerned about the foreign mining companies and the rate at which the gem is being depleted.
“Block C is the richest area in Tanzanite, it is the epicenter of tanzanite, it holds about 70% of all reserves. They are mining at very high speed and they want to finish all our Tanzanite within 19 years."

A lot of Tanzanians in the gemstone trade say they cannot compete with the foreign companies. Government regulations require that local dealers and miners get their stones certified by Tanzanite One before they can be sold in order to stop fakes from entering the market. Innocent Maranu has been selling tanzanite for about 5 years now.

"For Tanzanite One to demand that other dealers should send their stones to them to get certified I think it is not right because we have to establish independent institutions to satisfy the stones but not a dealer like them, Tanzanite One, to ask to send their stones to them. Otherwise the ministry of energy and minerals has to establish an independent department to certify stones."
Since most of Tanzania's stones are cut and polished abroad, the country is losing out on profits from processing the gem. For example, the American market alone makes about 500 million dollars a year from selling processed tanzanite.

"If mineral gemstones were to be cut here in the country the government could make a big revenue out of it. Secondly, creation of employment to the local people if they have the skills and that was our main aim of initiating this small institution which imparts skills in gem cutting and knowledge in identifying, knowledge in grading mineral gemstones and training them how to cut and becoming experts."
Tanzanite One does process some stones locally and runs a museum in Mererani that targets mostly tourists. Kut Salor a tourist says she a great deal buying her gem. "More than reasonable yes, to the extent I'm aware of and I'm going to go to Tiffany's and see how much they charge and then know what a great deal I got here."
Local Tanzanians say that unless they can benefit directly from their own natural resources, the full value of tanzanite will continue to be reaped by countries other than Tanzania.