How TZ reaps fortune from rare gem

TANZANITE gemstone mining has increased considerably since a 24-kilometre perimeter wall was built around Mirerani mining site in Simanjiro District, Manyara Region.

Production output and sales of the rarest gemstones on earth have been increasing since the government raised the wall surrounding Tanzanite mines in Mirerani in 2018 to contain smuggling of the rare gemstone.

Statistics from the Mining Commission show that gemstone production increased from 464.45 kilogrammes in 2017/18 before the wall was built to 1,964.75 kilogrammes in 2018/19 after the wall was built.

Mining of the gemstones rose to 4,628.12kg in 2019/20 before it shot up to 8,962.24kg in 2020/21, according to the statistics.

And between July 2021 and March 2022, some 15,377.44kg of raw Tanzanite, 130,582.28kg of tanzanite gemstones beads and 81,305.42 carats of processed Tanzanite were sold, the Minister for Minerals, Doto Biteko said in Parliament last June.

However, the value of the gemstones steeply declined from 2015/16 when 2,178.03kg of gemstones fetched 96.21bn/- to 2020/21 when 8,962.24kg brought 57.95bn/-, the statistics show.

The Assistant Commissioner of Minerals, Francis Mihayo told the ‘Daily News’ that the price decline of Tanzanite gemstone was due to Covid-19 pandemic that shook the global gemstone industry.

He said prices for gemstones and even diamond declined during Covid-19 pandemic because their demand as luxury goods plummeted.

“Covid-19 pandemic brought down the price. The price of gemstones and even diamond dropped significantly because they were not being bought unlike gold,” he said.

However, gold prices reached record high during the time because it was most sought after as a stock reserve during global economic uncertainties.

Covid-19 drove gold to new record prices as the metal was used by investors as a store of value in times of stress.

Analysts say gold prices benefited from strong demand for safe-haven assets following record-high global uncertainty and widespread negative economic data arising from the Covid-19 crisis.

About 40 per cent of Tanzanite production was being lost through smuggling before the Tanzania People’s Defence Force (TPDF) were commissioned to construct the wall around Mirerani at 5.64bn/-.

It is estimated that theft and smuggling have cost the country 90 billion US dollars in lost taxes from Tanzanite mines.

A commission of enquiry set up by former President the late John Magufuli estimated in 2017 that 90 billion US dollars had been lost in tax evasion, arising from mining operations since 1998.

And a parliamentary report published earlier that year, revealed that smugglers and mining operators were the ones reaping the benefits of the country’s Tanzanite riches due to corruption and unfavourable contracts.

Small and medium scale miners are benefiting from new regulations and arrangements for gemstone business after the wall was constructed around Mirerani.

Last week, the government unveiled a small-scale miner, who discovered two Tanzanite gemstones weighing a total of 5.22kg.

Anselim Kawishe was announced by Adolf Ndunguru, the Permanent Secretary in the Ministry of Minerals at a ceremony held at the Mirerani Tanzanite mining area in Simanjiro District in Manyara Region.

Kawishe’s new Tanzanite discovery was valued at 1.0 million U.S. dollars (about 2.2bn/-), said Ndunguru.

The Minister for Minerals, Doto Biteko, said President Samia Suluhu Hassan was informed about the new discovery and she directed that 5.22kg of Tanzanite should be bought by the government and the miner should be paid all of his money promptly.

In 2020, another small-scale miner Saniniu Laizer discovered two Tanzanite gemstones weighing about 14kg.

He earned 3.4million US dollars over 5bn/- from the country’s mining ministry for the gemstones.

 

 

 

 

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