Tanzania and Tanzanite: an opportunity about to be missed?
Tanzanite is a mineral unique to Tanzania, found only in a five-square-mile area in the southwestern foothills of Mount Kilimanjaro. It occurs naturally as a brownish crystalline substance, but when heated it loses the brown colouring and appears blue or violet, depending on the angle it is viewed from. Because of the way the crystals are arranged and the way they diffract light, many shades can be seen – purple, violet, blue, cyan, green, yellow, orange, red and brown.
Tanzanite is valued at between US$300 and 600 per carat, far less than diamonds, despite being much rarer. The total worldwide market for tanzanite is worth US$50 million a year (less than 0.5% of the diamond market) and the supply is limited. This poses a problem for the government of Tanzania: an increase in the price or supply of tanzanite could boost the national economy, but the government showed when it nationalised the tanzanite mines in 1971 that it does not know what to do with this geological prize. Very little was mined in the three decades following nationalisation, and, when the mines were returned to private ownership, many stones were smuggled out of the country.
In recent years, exports of rough stones larger than one carat have been banned, and the government of President John Magufuli has taken a stake in all new mining projects. These moves have helped the national economy by promoting a local stone-cutting and polishing industry, keeping more work - and more money - in the country instead of exporting both. Unhappily, the government that changed the law is not so keen on enforcing it.
Tanzanite has all the attributes needed for a successful product - scarcity, beauty, a unique look - yet it has failed to make a major breakthrough in the jewellery market. There are still untapped markets: in Europe and the USA diamonds are still popular, but in China and India customers prefer coloured stones. By moving into the design and retail sale of jewellery, the major tanzanite producers are building a market that may prove more profitable than digging the raw material out of the ground.
The supply of tanzanite is expected to begin falling in the next ten years, so Tanzania does not have much time left in which to build a legacy from the industry. The country collects only 5% of the world revenue, and changes in the law are intended to increase that. However, Tanzania needs not only to pass laws but also to enforce them, especially against smugglers. Without enforcement, other countries will reap the rewards of tanzanite and Tanzania’s extraordinary legacy may well be lost for good.