British firm reports swimming in tanzanite profits

BabuK · 2010-09-30T02:28:25+00:00

Amid tears in India in the wake of an export ban of unpolished tanzanite stones from Tanzania, British company, Tanzanite One Limited, has this week reported gaining share value in London and starting to swim in profits from the rare gemstone. Precious gem-Tanzanite only found in Tanzania The company rose to a 16-week high in London trading last week after returning to profit in the first half. Tanzanite One climbed 7.9 per cent to 10.25 pence as of 12:05 pm local time, the highest price since June 8. The company reported first-half net income of $728,000, compared with a net loss of $546,000 a year earlier, after demand for the bluish-hued gemstones recovered. "We are seeing a definite increase over the last three quarters in demand and prices, and we are hoping that will continue," Chief Executive Director Bernard Olivier told Bloomberg News by telephone. "We definitely haven't seen the peak yet." Tanzanite production rose 21 percent to 1 million carats, the Hamilton, Bermuda-based company said in a statement. Sales jumped 74 percent to $8.6 million, of which $1.69 million was for cut stones, a proportion that Tanzanite One plans to increase, Olivier said. The company decided against paying a dividend, saying it wants to have a "significant cash reserve" before restoring payouts. "Since we've only now returned to profitability, I doubt it will be this year," Olivier said. Tanzanite, which is 1,000 times rarer than diamonds, is mined from the world's only known deposit, at the foot of Mount Kilimanjaro, Africa's tallest peak. In the meantime, Indian is shading tears from loss in the rare gemstone. The export ban of raw tanzanite imposed by the government to maximise the economic potential is already being felt in the Indian town of Jaipur, which was the major cutting and polishing centre. According to informed South African gemstones business media reports about 250, 000 jobs may be on the line in the town, bloggers have said this week. Tanzanite accounts for one-third of the annual gem imports of Jaipur and employs nearly 250,000 people in cutting and polishing the raw gem for re-export. Minister of Energy and Minerals William Ngeleja announced the embargo in June, this year saying the action was taken to spur development of the local processing industry, thereby boosting the economy and recouping profits. "As from April 2, the export of raw tanzanite is banned," Ngeleja said, adding: "Dealers found violating the sanction will have their consignment confiscated and licences nullified." The net effect of this legislation is that it will bring more economic benefit to local economies. The Tanzanian government banned the stones' export to India – because, logically, it wanted to develop its own national cutting industry – which has caused a monster problem for the Indian city of Jaipur which was where most tanzanite was cut. 250,000 who depend on the stone in India have lost jobs. In addition, Tanzania will not be issuing mining licenses to foreign companies. Mining will be reserved for locals; foreigners must be in a joint venture to participate. The purpose behind this move is to develop a cutting and polishing industry in Tanzania itself and boost local employment. The gemstones under purview of the new legislation include diamonds, tanzanite, emeralds, rubies, sapphires, turquoise, topaz and others, reports add. At present, much of the rough gem material from Tanzania goes to Jaipur, India, which is a stone cutting center particularly for lower value gems. It was first discovered in 1967. There was some difficulty in identifying the samples but this was finally achieved by a government geologist, Ian McCloud, Tanzania Mineral Dealers Association (Tamida) chairman Sammy Mollel was recently quoted as saying the country has over 400 qualified experts in cutting and polishing tanzanite gemstone. He is also quoted to have said over 120 tanzanite cutting and polishing plants have been deployed in Arusha. According to Mollel, cutting tanzanite locally would minimise smuggling, create employment for the local people and help the industry contribute more to the government in terms of revenue. He said that Tamida would work with the government to revive gemstone exhibitions, which were held annually in the 1990s in Arusha to showcase the country's mineral potential. It is estimated the tanzanite nets about $100 million annually while the finished gems are sold for over $500 million annually. SOURCE: THE GUARDIAN

Thread starter BabuK
Start date Sep 30, 2010

BabuK

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British firm reports swimming in tanzanite profits

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