Tanzanite Rising

March 1999

Gemstones & Pearls:News

Tanzanite Rising

Once treated like a commodity, this popular gem faces shortages and higher prices

Tanzanite is at the peak of its career. Since it was discovered in 1967 near the base of Mount Kilimanjaro in Kenya, tanzanite has been on the fast track to becoming one of America's favorite gemstones. Today, it's often referred to along with the big three colored gems – ruby, emerald and sapphire. This meteoric rise can be attributed to tanzanite's qualities:

  • Beauty: The velvety purplish blue tanzanite is an excellent alternative to other blue gems, such as sapphire.
  • Rarity: Tanzanite is produced commercially only in Merelani, Tanzania.
  • Exotic factors: African origin, mystifying haziness, depth of color and fascinating pleochroic colors lend intrigue.
  • Adequate supplies: Until now, but look for changes ahead.
  • Reasonable prices: Again, look for changes ahead.

Remember the Rarity
Fine jewelers often treated tanzanite with aloofness because oversupply and price competition in 1996-97 created a buyers market and made the gem less desirable for discriminating retailers.

But remember tanzanite is rare. The abundant supply was an anomaly of production. In fact, tanzanite production had started to fall even before major floods trapped and killed miners and halted production at the Merelani mines last year (Professional Jeweler, June 1998 pp. 17, 71). With the mines now reopened, the supply of tanzanite remains weak and prices are inching upward.

Availability
Nevertheless, experts say tanzanite is not an endangered species. Geologic studies suggest plenty of tanzanite still exists underground. Unfortunately, many miners say they can no longer afford to retrieve the tanzanite at today's prices. Large-scale mining translates into large-scale capital.

"Merelani still has potential," says Dana Schorr of Schorr Marketing and Sales, Santa Barbara, CA. "It has been mined about 100 meters [330 feet] in depth, but geologists believe the tanzanite-bearing veins go down at least 300-500 meters [990-1,650 feet]. This means large-scale mechanization will be necessary soon to bring supplies back to levels the market is comfortable with."

Opportunities
Gemstone industry observers say the biggest opportunities for production lie in Merelani's Block C, which has been only surface-mined so far. Negotiations for control of this block are under way. (The Merelani tanzanite area is separated into large mining blocks operated by different entities. Most of the production today comes from independent miners.)

Meanwhile, prices continue to rise. Some dealers report 100% price increases in some high-end goods and 40%-70% increases in medium- to high-quality tanzanites in calibrated sizes since one year ago. Modest-to-substantial increases are expected this year. Capitalization and mining equipment will ensure prices remain high well into the future.

In selling tanzanite, remind customers of its unique beauty and rarity. Even at its highest price, the rare tanzanite still sells for a fraction the price of a comparable, though much more available, sapphire.

Tanzanites such as this 13.64-ct. "syncopated horizon cut" by David Brackna of Germantown, MD, have been the subject of an unparalleled rise in popularity and price.

– by Robert Weldon, G.G.

 



Copyright © 1999 by Bond Communications.


 

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