What next for Tanzania after tanzanite crash?


Tanzanite pic

By Gadiosa Lamtey

Dar es Salaam. Tanzania is focusing on value addition of tanzanite in an effort to curb the economic impact of a steep drop in prices of the precious mineral.

Data obtained from tanzanite miners at Mererani yesterday show that market prices for the gemstone have gone down by up to 60 percent during the past two years when the world was grappling with the global Covid-19 pandemic.

Miners and traders at Mererani say the price has gone down from Sh1 million per gram before the Covid-19 pandemic to the current Sh400,000.

They say the drop in prices was largely due to reasons associated with poor distribution of the minerals in world markets, random mining and the lack of a single entity or a large company to control the trading of the mineral.

The government says the price has indeed gone down during the past few months, blaming it on the global Covid-19 pandemic that has seen clients ditching luxurious minerals as they divert their disposable incomes to other pressing needs.

Minerals minister Doto Biteko told The Citizen yesterday that, like tanzanite, diamond prices had also gone down for similar reasons.

“For instance, the price of diamonds has dropped by 40 percent in the world. This is because jewelry basically belongs to the type of fittings that are purely luxurious. During the pandemic, people decided to stop purchasing and most jewelry shops were closed,” he emphasized.

He, however, said the government was putting emphasis on value-addition and branding of the minerals in an attempt to cushion the impact of the drop on the economy.

He said the fall in prices of tanzanite and diamonds was also affecting a number of businesses in the world – adding that strategies were being worked out to see how to save the adverse situation.

He said he was working on an order from President Samia Suluhu Hassan, who said during her official tour of Mwanza Region that the minister should sit down with investors in the industry to see how to enhance tanzanite prices and improve its sales in the world market.

“I want tanzanite to be sold under one umbrella. It should be exported after value-addition and rebranding so that it will fetch better prices. These minerals are our resources and, therefore, we must protect. Currently, most countries have tanzanite, but its origin is in our country,” she said.

Mr Biteko said yesterday that his ministry had already started implementing the President’s directives. “I can confirm to miners and sellers of these minerals that their prices have dropped worldwide due to Covid-19. Currently, the only mineral that fetches high prices is gold and that is because during the pandemic people buy and store it instead of keeping money,” he said.

The chairman of the Tanzania Mining Commission, Prof Idris Kikula, said the commission has already dispatched a team of experts to Mererani.

Prof Kikula added that, at the moment, he does not know the real reason for the price drop, and time is needed to come up with answers for the falling prices.

Speaking to The Citizen, a lawyer for HakiMadini, Mr Erick Luwonga, said there was currently a significant increase of the mineral in various markets, which had led to reduced sales.

“There are a lot of minerals in the market, so prices must go down. In the past, minerals were few and that’s partly why the prices spiked,” he said.

For his part, the Hugo Gems director, Mr Hussein Gonga, said they congratulate President Hassan for the plan to form a single tanzanite regulatory body, arguing that this would increase the value of the minerals.

SOURCE: https://www.thecitizen.co.tz/tanzania/news/-what-next-for-tanzania-after-tanzanite-crash–3442120

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