November 16, 2001
WSJ Reports Al Qaeda Connection to Tanzanite
The Wall Street Journal reports on Nov. 16 "increasingly clear" connections between tanzanite sales and the al Qaeda terrorist network. The report says al Qaeda sympathizers smuggle a high percentage of the purplish blue gem crystals out of Tanzania through Mombasa, Kenya, into free-trade zones such as Dubai and Hong Kong.
WSJ quotes sources who say once the gems reach Dubai (part of the United Arab Emirates), the tanzanite is sold on a cash-only basis to raise money for militants or as a method of moving and laundering money. Dubai has no gem cutting industry, lies outside normal channels for the trade of rough gemstones and has long been recognized as a center for the kind of money-laundering favored by terrorist Osama bin Laden.
The U.S. is the major customer for tanzanite, consuming about 80% of Tanzania's production. The allegations already caused two major tanzanite customers, QVC and Zale Corp., to warn its dealers that it will discontinue buying tanzanite if clear connections to al Qaeda could be identified and proven.
In the trade, rumors about tanzanite and al Qaeda connections have already been circling, fueled by a recent report by United Press International linking al Qaeda to a company in Mombasa called Tanzanite King. Dealers tell Professional Jeweler they had not heard of Tanzanite King and their connections in Nairobi and Mombasa had not either, suggesting the business may have been used as a front and not for actual gem trading.
WSJ says the U.S. has known of al Qaeda's gem connections for some time and quotes a former Clinton aministration counter-terrorism official, Al Wechsler, as saying the gem business is attractive to terrorists because of its multiple channels including brokers, traders, cutters and dealers. According to Tanzania's own estimates, the majority of tanzanite mined there is smuggled through the country's porous borders. But Tanzanian officials, while acknowledging rampant smuggling of tanzanite, say they have no proof of a link between al Qaeda and tanzanite.
A South African company, Afgem, recently obtained mining rights to a portion of the mining area and often raised the issue that smuggled gems are not beneficiating Tanzanian citizens. Afgem's widely reported branding efforts have been criticized by independent dealers as a way of alienating and marginalizing Tanzania's traders.
Tanzanite is a rare gem, of the species zoisite, found in commercial quantities only in the region of Merelani, Tanzania. It is generally brownish upon discovery and later heated at low temperatures to turn into more marketable purple to blue colors.
- by Robert Weldon, G.G.