Tanzanite Sources and its Market
Tanzania is the only source for tanzanite. It has two distinct markets: one for the gem quality tanzanite and another for the smaller pale colored stones. Gem quality tanzanite is only found in the Merelani area in Tanzania. Tanzanite was first found in 1967 and over time there have been sharp fluctuations in the market place. When tanzanite is plentiful, the price goes down and the wholesalers promote it to their customer.
When supply is down the price rises steeply and the opposite happens. Wholesalers do not have the incentive to promote the gem. In 1968, Tiffany & Co. named the gem and promoted tanzanite as coming from Africa with its “legendary mystery”. They began selling the finer quality tanzanite as an alternative to the higher quality sapphire which was scarce at that time. Although tanzanite equals the beauty of the best sapphire ring, it is only a fraction of the price. In 1971, political instability arose and the Tanzanian government took over the operation of the mines.
Because the government strictly regulated the supply of tanzanite, the demand went down and the prices became excessive. In 1980, the Tanzanian government lost control of the mines and because of the chaos it created, an oversupply of this gemstone became available. Both large gem quality and the smaller pale quality became easily accessible. There was a high demand for the smaller pale tanzanite to a customer base looking for a newer different stone at a low price. In 1998, heavy rains caused a disaster and 100 miners drowned in the mines.
There was no longer a steady supply and again the market prices varied widely. In 2003, African Gem Resources Ltd. took over and modernized the mines, taking away the risk of death due to rain and flooding. In the first six months, this company’s mines produced over 800,000 carats of gem rough. In 2004, the company TanzaniteOne bought AFGME and in 2005 sold shares on the London Stock Market. Tanzanite became profitable to dealers in the long run. When sapphires are scarce, tanzanite is readily available for tanzanite rings, earrings and other jewelry.
