TanzaniteWhat is Tanzanite?
“Tanzanite is a trade name that was first used by Tiffany and Company for gem-quality specimens of the mineral zoisite with a blue color. Tiffany could have sold the material under the mineralogical name of “blue zoisite” but they thought the name “tanzanite” would stimulate customer interest and be easier to market.”
“The name “tanzanite” was given because the world’s only known tanzanite deposit of commercial importance is in northern Tanzania. The name reflects the gem’s limited geographic origin. The mines are all located in an area of about eight square miles in the Merelani Hills, near the base of Mount Kilimanjaro and the city of Arusha.”
“Although nearly all of the world’s most popular gemstones have been known and used for hundreds of years, tanzanite was not discovered in commercial quantities until the 1960s. In the short time since then, it has become the second most popular blue gem after sapphire. It is one of a very small number of gems of any color that have been discovered and brought to strong consumer popularity within the past century. This rapid rise to popularity was accomplished mainly by Tiffany’s promotion and tanzanite’s beautiful blue color.”
Tanzanite’s Interesting Color
“The mineral zoisite naturally occurs in a wide range of colors that include colorless, gray, yellow, brown, pink, green, blue and violet. The name “tanzanite” is used for blue to bluish purple to bluish violet specimens. This type of name is not unusual. The name “ruby” is used for red to slightly purplish-red specimens of the mineral corundum; the name “amethyst” is used for purple specimens of the mineral quartz; and, the name “emerald” is used for green specimens of the mineral beryl.”
“The discovery of transparent crystals of blue zoisite stimulated interest in the gem. Soon after that discovery, laboratory experiments determined that heating could improve the color of some naturally blue stones. They also determined that heating could convert some naturally brown zoisite into beautiful blue zoisite. With those discoveries there was enough blue zoisite to support a marketing effort that would introduce the gem to millions of people. Today, nearly all of the gems being sold as “tanzanite” have a blue color that has been produced or enhanced by heating in a laboratory.”
“The blue color of tanzanite is caused by small amounts of vanadium within the zoisite mineral structure. When the mineral is heated to a temperature that is high enough to change the oxidation state of vanadium, the color of the gem is changed. This color transition occurs at a temperature of about 600 degrees centigrade.”
“In 1967, when the first tanzanite had been faceted and prepared for the market, jewelers and the public knew nothing of the gem. They had never seen its blue color or heard its name. To introduce the world to tanzanite, Tiffany and Company launched a public education program. They prepared educational materials that would make consumers aware of the gem and materials to help jewelers understand it, market it and explain its characteristics to their customers. When a new, previously unknown gemstone enters the market, every person who sells and buys must be educated before transactions can occur.”
“More recently, in 2003, TanzaniteOne Mining Ltd, the leading miner of tanzanite, and a company that cuts, manufactures, wholesales and retails tanzanite gems and jewelry, established The Tanzanite Foundation, a non-profit organization that promotes tanzanite. The Foundation prepares educational materials for retailers and consumers, assists with retail staff traing, and assists retailers with tanzanite promotion. The Foundation is also a participant in the Tucson Tanzanite Protocol, an organization that works to ensure that tanzanite has an ethical route to market, similar to how the Kimberly Process works to prevent conflict diamonds from entering the diamond market.”
“The price history of tanzanite has seen many sharp rises and falls. These price changes have been related to the limited number of mines and the limited geographic location of the world’s tanzanite resource. Decisions and regulations of the Tanzanian government can have an immediate impact on the availability and price of the entire world’s supply. Tanzanite does not have the price insulation enjoyed by gems that are mined in multiple countries and on different continents. Events such as floods or mining challenges also have an immediate impact upon supply and price.”
“Illegal mining and smuggling have also moved the price of tanzanite. In 2012 and 2013 large numbers of illegal miners entered the tanzanite mining areas and began to aggressively mine the easy-to-access areas. This occurred at a height of tanzaite prices. They then dumped a flood of illegal production into the market, causing a sharp decline in tanzanite prices during the following two years.”
“When prices change, commercial-grade gems usually experience the greatest price instability. These are the most abundant grades of tanzanite where price competition is highest. Top quality stones, especially those in larger sizes, are very rare. They tend to retain their value in down markets and increase in value in rising markets.”
How Much More Tanzanite Remains?
“Tanzanite is one of the top ten best-selling colored stones in today’s gem and jewelry markets. That is a surprise considering that it was only discovered in the 1960s while all of the other best-selling colored stones have been known for centuries or millenia. It has a unique blue color that grows in popularity as more people learn about it. The popularity is expected to grow as colored stones become more common purchases in developing economies.”
“At the same time, tanzanite is a rare gem. All of the known deposits are confined to a few square miles of land in northern Tanzania. It is the only gemstone with a large and rapidly growing popularity that has such a limited known supply. Some people believe that the currently-known tanzanite resource could be depleted in just a few decades.”
The question that occurs to many people is: “How much tanzanite remains?”
“That question is difficult to answer. The best data available comes from an independent study that was done in 2012, prior to TanzaiteOne’s listing on the Dar es Salaam Stock Exchange. TanzaniteOne is the world’s largest producer of tanzanite and holds the rights to mine Block C, which has an area that is larger than all of the other mining blocks combined.”
“The study is based upon over 5000 meters of diamond drilling conducted at 17 sites within Block C along with mine production data and surveys. The study revealed that Block C contains indicated, inferred, and total resources of 30.6, 74.4, and 105 million carats, respectively. These values suggest a life-of-mine of about 30 years at a production of 2.7 million carats per year.
The 30-year life-of-mine applies only to TanzaniteOne’s holdings and assumes that they are successfully able to mine at the progressively deeper depths needed to recover the remaining resource. It also does not consider the resource levels in other blocks of the mining area or discoveries that might be made in Tanzania or other countries.”
“If the known tanzanite resource is all that exists worldwide then no new tanzanite will enter the market when the known deposits are depleted.”
“When most other geologic resources become in short supply the price rises. That higher price motivates producers to explore for new resource and improve their ability to completely recover remaining resources. Sometimes they rework tailings.”
“Consumers are also motivated by higher prices. Those who already own the commodity can choose to liquidate investments or bring recycled goods into the market. Those who do not own the commodity can choose to pay the higher price or seek less costly alteratives.”
“What happens when tanzanite supplies deplete remains to be seen.”