Early Mishandling by Government
Tanzania is a third-world country that only gained independence in 1964. Since that time, it has experienced a great deal of hardship. In 1971, a young and inexperienced government began to realize the monetary potential of tanzanite, so it took control and nationalized the mines. However, necessary structure was not in place, and quality of mined material diminished. Around that time, tanzanite had just reached the US, resulting in a large and enthusiastic push by famous jeweler Tiffany’s & Co. The erratic changes in supply caused problems, though, which eventually led Tiffany’s to stop promotion. In 1972, the Tanzanian government formed STAMICO (State Mining Corporation) in an attempt to fix issues and capitalize on tanzanite.
That same year, the country was attacked by Uganda, which led to a two-year war. STAMICO’s efforts to begin full-scale mining did not materialize, and while the tanzanite market remained alive, it was quite volatile. Then in 1990, officials split the area into four sections: Blocks A, B, C and D. Blocks A and C were awarded to large-scale operators, while Blocks B and D were reserved for local independent miners. At that time, some organization entered the industry, and it was able to slowly move back into US markets.
Modern Operations Introduce Global Marketing
Once advanced mining companies began to operate in Blocks A and C, the tanzanite market was forever changed. Their business skills were something small-scale miners and Maasai simply did not have. A level of sophistication was introduced to the industry. These businesses had the resources and tools to make tanzanite an international success.
Review of Tanzanite Supply Chain
Tanzanite is mined approximately two hours outside of Arusha, the Tanzanian capital. As mentioned before, the area has been segmented into four sections: Blocks A, B, C and D. From the mines, rough material is sold at buying offices in Arusha and in the outer villages of native Maasai. Next, it travels to cutting facilities, almost exclusively located in India. The finished gems are then sold to jewelry manufacturers and other retailers such as JTV. To truly investigate market conditions, JTV started with the first two links of this supply chain. Our team spent time both visiting the mines and meeting with local suppliers.