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Tanzania's gemstone industry polishes its image - 2002-08-08

A South African mining company, Africa Gemstone Mining, or AFGEM, has commended the Tanzanian government’s recent move to bring its tanzanite industry directly under central government control. Until recently, mining of the tiny blue gemstone was controlled by the local governments. The consolidation comes after international media reports said a big part of the proceeds from the industry was going into the coffers of the Al Qaeda terrorist network.

The South African mining company says business in the tanzanite gemstone is back to normal after the United State Department of State refuted reports that much of the industry’s proceeds goes to the Al Qaeda Network. When reports of a possible Al Qaeda and tanzanite link first were first made by the New York based Wall Street Journal last year, all major retailers in the US withdrew all jewelry made of the rare gemstone. Zales Corporation and Tiffany & Company said the decision to suspend trade in tanzanite jewelry was aimed at protecting their brand names and to guard their customers’ confidence.

The deregulated environment of tanzanite mining may have fed the suspicions surrounding it. Some questioned the reported disparity between what the United States paid for tanzanite imports – roughly 300 million dollars per year – and the yearlyamount the Tanzanian government said it earn in exporting the gem – only $16 million. Much of the money – which went through Indian, Lebanese and other Arab traders – was never accounted for. Rumors spread that money was being funneled to terrorists – an allegation that could not be substantiated.

Yet action by the Tanzanian government put the rumors to rest. During the peak period of the tanzanite industry crisis early this year, former Tanzanian energy and mining minister Edgar Maokola-Majogo travelled to the US to meet dealers and dismiss Al Qaeda fears. The two parties formed a joint international task force to restore consumer confidence by strengthening regulation of the industry. He also announced new rules governing the mining of tanzanite: he said miners would be licensed and gems would be certified to ensure that only legally mined and exported gemstones were sold. He also said a new board – made up of government and non-government stake holders -- would be set up to supervise the mining, trade and export of the gem.

Many say the tanzanite industry is now better organized. Mike Nunn is a spokesman for the South African Mining company called Africa Gemstone Mining, or AFGEM.

He commended the Tanzania government for acting positively to restore major US dealers’ confidence: "I think that it’s a very very positive move. I think the government has recognized the strategic importance of the industry to the economy of Tanzania and they are giving it the due importance and due attention that it needs, I think it’s exceptionally positive."

Tanzania’s energy and mining minister Daniel Yona says the move by the government to take control of the industry is aimed at ensuring that tanzanite contributes significantly to the country’s economy. Meanwhile, the South African Mining Company, Afgem, is due to start production soon at a site near the town of Arusha in northern Tanzania. It says it will command five percent of the market of cut and polished (raw) tanzanite in the world when operations start next September. AFGEM’s chief executive says the future of the industry looks bright.

The AFGEM chief executive said the company expects to control over 20 percent of the industry within the next two years or so. He says both Zales Corporation and Tiffany & Company resumed tanzanite jewelry sales in their US shops by early June.

Mr Nunn also said relations between his company and small scale miners in Arusha have improved. Last year, small scale miners staged a bloody resistance against Afgem’s take-over of the mines -- fearing their expulsion from the industry. But last month, he said the company had won the support of the miners when it helped recovery the bodies of 30 small scale miners who were suffocated to death in a blocked mine shaft. Reporting from Paris for VOA English to Africa Service, this is Finnigan Wa Simbeye.