Tanzanite Gem rarer than Diamonds
This exotic, sexy stone inspires romantics, collectors, investors
Mar 24, 2007
In the shadow of Kilimanjaro, the highest mountain in Africa, in a thin strip of land only five kilometers long, is the only known source on Earth of this deeply blue, sparkling violet and flashing red tri-color gem phenomena. The cradle of humanity, the East African country of Tanzania, is also the cradle of creation for this highly-coveted gemstone, a gem 1,000 times rarer than diamonds. In the shimmering blue depths of tanzanite lie millions of years of human and geological history. Approximately 500 million years ago, the deep indigo crystal was formed over millions of years by volcanic and geological processes such as the pulling apart and grinding together of the continents, with intense heat and the presence of certain minerals and elements coming together in a unique geological circumstance that created tanzanite.
In a rift valley 25 miles from the base of Kilimanjaro, the gemstones are mined on traditional Masai tribal lands. Masai herdsmen first noticed the glittering blue stone but kept it to themselves until one Masai showed the stone to Indian immigrant and part-time prospector Manuel D’Souza. D’Souza realized there was something special about the stone, so, in 1967, he took a sample to Germany where he met with Henry Platz, grandson of Louis Tiffany, founder of Tiffany & Co. of New York. The highly-influential jewelry manufacturer made an exclusive deal for the stone Platz called “the most beautiful discovery in 2,000 years.”
Tiffany promoted the gemstone for several years, but due to poorly-managed mining rights and erratic supply, passed on further exclusivity.
Most mining was done by small, independent local miners in five designated “blocks” of land. In 1997, South African entrepreneur Mike Nunn put together a group of South African investors and purchased an un-mined stretch of land called Block C. The company was eventually named TanzaniteOne.
The company immediately began a campaign to popularize tanzanite. They copied the model of the DeBeers diamond cartel, organized in 1890 to control supply. DeBeers began an advertising campaign in 1938 in the United States to convince consumers that diamonds are rare (they aren’t); that they symbolized romantic love (a clever copywriter’s ploy) and that the diamond solitaire was THE engagement ring.
But TanzaniteOne and a non-profit organization they fund, The Tanzanite Foundation, do more than self-promotion; the foundation finances schools, roads and water management for the surrounding native communities. The company is also trying to improve and pioneer new mining technology.
But some in the gemstone industry see TanzaniteOne as trying to establish a monopoly on the tanzanite industry. The company is increasing its control of newly mined tanzanite by purchasing a large portion of the production coming from independent miners. They are also purchasing much of the top-grade tanzanite on the secondary market. This is the first time that a colored gemstone has been controlled in this way. Prices for rough on the open market have increased steadily for the last several years as the company has solidified its control of the market.
Top-grade gem-quality stones, with their rich, scintillating blue, halo of violet glow and flashes of red, sell for $1,500 to $2,000 per carat; often much more. Top-grade stone represents only 0.13 per cent of TanzaniteOne’s annual production.
The cartel claims to represent only 35 per cent of the tanzanite market, compared to DeBeers 70 percent share of the diamond market.
Geologists estimate that the mines will be depleted in 15 years. Due to its geological uniqueness, geologists are certain that no more deposits will be found. No top-grade stone has been produced by any of the mines in the past two years. The few vendors selling tanzanite this February at the Tucson International Gem Show, one of the industry’s top shows, had stones that were lightly-colored and highly-included. The deep blue-violet color with flashes of red seen only in top-grade stones is currently available only on the secondary market. Geologists say that we are the first and last generation of humanity to have the opportunity to be first-time owners of a piece of tanzanite.
