Tanzanite Investment: From Accidental Discovery to Uncertain Future
Tanzanite Investment is fraught with peril at retail. Tanzanite is a fantastic gem. It’s beautiful, it comes in big sizes, and it’s reasonably durable, and it’s plentiful enough that pretty much anyone can get some if they want. That’s close to the definition of a ‘gem’. Even so, the story has been evolving and it’s a little different from most.
The discovery of Tanzanite
Tanzanite was ‘discovered’ in the 60’s in Tanzania by local herders.
No doubt they knew it was there, but they didn’t know rich foreigners might be interested in buying the stuff and they hadn’t understood the magic of heating it.
The stones are mineral called zoisite and it’s not really good for much. In the wild, the crystals generally range from brown to grey.
It’s not even really a pretty grey at that.
They were just rocks. Getting the famous blue/violet color requires treatment with heat and people just hadn’t been doing that. That all changed when someone noticed a deposit of stones changed color after a wildfire.
African tourism hadn’t really kicked in yet and there still wasn’t really much of a market but, as they say, where there’s a will there’s a way.
Tiffany & Co. showed up. They thought they could make a market, and they were right. They changed the name because they thought Zoisite sounded too much like Suicide, and they coined the name Tanzanite after the location of the deposit. They applied their considerable marketing talents to a previously obscure stone. Big Tanzanites were a fraction of the price of similar sized sapphires and, as a single source gem, they could dominate it. It was a huge hit. It’s estimated that they extracted 2 million carats before the Tanzanian government nationalized the site in 1971.
The government created Tanzanite One Mining Ltd. to manage the mining and, in 1990, Tanzanite One opened up distribution worldwide. They had salespeople everywhere.
They set up specialized cutting centers. They made deals with jewelry designers and fashion houses.
Most importantly, they made a connection with the cruise industry.
They even offered financing to the right stores. It was a very aggressive, and relatively effective plan. Unlike any other gem, the Tanzanian MBAs got in on the ground floor and the Ministry of Minerals invented a whole market from mine to finger.
If you went on a cruise in the 90’s, you couldn’t miss it. Every jewelry store in every port of call in the Caribbean and beyond could fix you up.
That’s when it went off the rails. In 1997, the Ministry shut down Tanzanite One, accusing them of everything from environmental problems to worker abuse.
They supposedly hadn’t paid their miners in 22 months. Even 27 years later it’s not entirely clear what they did and didn’t do but they were out and didn’t come back until 2005.
The Ministry divided the deposit into 4 zones or blocks designated A, B, C, and D. A and C were designated for large scale and mechanized mining methods while B and D were reserved for local and artisanal miners. Tanzanite One signed a new mining lease on block C and they’re still there although it’s a much less ambitious company now.
The Tanzanite narrative.
In the meantime, they had lost control of the storyline.
The cruise port and other sellers would talk about mine cave ins, ghosts, floods, and the deposits running out.
There’s only one mine left! You had better buy them now because soon there won’t be any left. They’re becoming rare and terribly expensive.
Yours is the last generation that will be able to buy them. Invest, invest, invest. Retail prices soared and the profits flowed. The sellers would use their own prices from a year previously as evidence that you should buy NOW…
Then another crazy thing happened. Covid.
Covid-19 was a disaster for the cruise lines, and along with them the shops in the port cities. They still haven’t fully recovered. Real, live, customers were getting hard to find, and the market retracted.
Stones that used to cost $1000/ct were going for $300, and the volume was 1/10 of where it was in the golden days.
They were, and are, as beautiful as ever but the house of cards was falling down. The urgency was gone.
It’s 2024, and slowly it’s coming back.
The ships are running, the stores are open, and the mines and cutters are working. Prices are coming back up. $500/ct is common and $900-$1000/ct isn’t unusual.
Every now and then you’ll spot a ‘deal’, but don’t count on it. It’s been declared a birthstone for December to replace Zircon, which has a name too similar to Cubic Zirconia, an unrelated and plentiful synthetic material. Zircon is a historic and lovely material but, commercially, it’s a dog. That’s a story for another day.
A note on Tanzanite as an investment.
Don’t.
Tanzanite is beautiful stuff and, by all means, buy some if you love it, but don’t expect to EVER see your money again.
The problem is with the resale marketplace. It is a bit too fragile for everyday wear and nearly all used pieces have a certain amount of damage.
It’s a little expensive, and still a niche product so most jewelers don’t want to stock it and the above-mentioned cruise ports are in the business of selling, not buying.
They’ve got crazy rents to pay. It’s the same with the TV sellers. They don’t buy from the public. They can’t. Fakes and substitutes are common, which makes eBay and Facebook problematic for both sellers and buyers. If you’re not a dealer, and maybe even if you are, don’t buy Tanzanite as an investment.
The Tanzanite Story: Cliff notes to market development
Tanzanite, a captivating gemstone with a vibrant blue-violet hue, boasts a unique history intertwined with marketing brilliance, government intervention, and market fluctuations. This essay delves into the fascinating journey of Tanzanite, from its accidental discovery to its current position and future prospects.
Humble Beginnings: From Zoisite to Tanzanite
The story begins in the 1960s in Tanzania, where local herders stumbled upon unremarkable brown or gray zoisite crystals. These stones, lacking the brilliance prized in gemstones, held little value in their natural state. However, fate intervened when a wildfire swept through the area, and the heat treatment transformed the zoisite into the captivating blue-violet gem we know today. This revelation sparked the birth of Tanzanite.
Tiffany & Co.: The Birth of a Brand
Recognizing the potential of this newfound gem, Tiffany & Co. stepped onto the scene. The name “zoisite” was deemed unappealing, so they christened it “Tanzanite,” a name evocative of its origin. With their marketing prowess, Tiffany launched a campaign to cultivate a market for this previously unknown gem. Highlighting its size, affordability compared to sapphires, and single-source exclusivity, Tanzanite quickly gained popularity. Estimates suggest Tiffany extracted a significant amount – around 2 million carats – before the Tanzanian government took control in 1971.
Government Intervention: Tanzanite One Mining Ltd.
The Tanzanian government established Tanzanite One Mining Ltd. to manage and regulate the mining of this newfound national treasure. By 1990, Tanzanite One embarked on a global distribution strategy, establishing sales representatives, specialized cutting centers, and partnerships with jewelry designers and fashion houses. Notably, they forged a strong connection with the cruise industry, ensuring Tanzanite’s presence in every port of call. This aggressive approach, spearheaded by Tanzanian officials, created a vertically integrated market – from the mine straight to consumers’ fingers.
A Derailment and a Scramble for Control
However, the success story took a dramatic turn in 1997. The Ministry of Minerals shut down Tanzanite One, accusing them of environmental damage, worker exploitation, and unpaid wages. The accusations remain somewhat murky even today. The shutdown resulted in a period of uncertainty. The government divided the mining area into four zones, with varying mining methods allocated to each. Tanzanite One eventually returned in a diminished capacity, securing a lease on one of the zones.
The Narrative Takes a Turn: Scarcity and Investment Hype
In the absence of a central marketing force, the narrative surrounding Tanzanite shifted. Cruise line shops and other retailers sensationalized the situation, weaving tales of mine collapses, resource depletion, and impending scarcity. This fueled a price hike, with sellers pushing Tanzanite as a rare and valuable investment. This strategy, while initially successful, ultimately proved unsustainable.
The Cruise Line Crash and Market Retraction
The COVID-19 pandemic delivered another blow. The cruise industry’s collapse significantly reduced the customer base for Tanzanite. Prices plummeted, with stones once fetching $1,000 per carat selling for a fraction of that. The market contracted, and the urgency created by the scarcity narrative dissipated.
The Present and Future: A Cautious Resurgence
As of 2024, the Tanzanite market is slowly recovering. Tourism is picking up, and the mines and cutters are resuming operations. Prices are on the rise, with $500 per carat becoming a common price point. Additionally, Tanzanite has been declared the new birthstone for December, replacing zircon.
Investment Potential: A Word of Caution
While Tanzanite’s beauty is undeniable, it’s not a recommended investment. Its relative fragility makes it unsuitable for everyday wear, leading to potential damage in pre-owned pieces. Additionally, the limited market reach, with most jewelers hesitant to stock it, makes resale challenging. Fakes and substitutes further complicate the resale landscape.
A Gemstone Steeped in Story
The Tanzanite story is a fascinating blend of discovery, marketing brilliance, government control, and market fluctuations. While its future remains uncertain, its beauty and unique history continue to captivate gemstone enthusiasts worldwide.
Further reading:
- Gemological Institute of America (GIA): https://www.gia.edu/ – Provides a detailed overview of Tanzanite’s properties, including its origin, geology, mining, and treatments.
- International Gemstone Society (IGS): https://www.gemsociety.org/ – Offers information on Tanzanite’s history, gemology, and cutting techniques.
- Smithsonian Institution: – The Smithsonian website may have articles or resources on Tanzanite’s geological formation or history. You can search their website using the search function.
- Mindat:** https://www.mindat.org/min-3885.html – An online mineral database with a comprehensive page on Tanzanite, including its mineralogy, crystallography, and physical properties.