Government to monitor tanzanite trade

The Tanzanian government said on Saturday that it would implement new control measures to oversee the trade in the semiprecious gemstone, tanzanite, following reports that proceeds from its sale were being used to fund terrorism.

"The Tucson Tanzanite Protocol reinforces the significant steps we are continuing to take to safeguard the trade in tanzanite," Edgar Maokola-Majogo, the Tanzanian Minister of Energy and Minerals, said in a statement released by the American Gem Trade Association (AGTA) on Saturday, 9 February.

US jewellers in November 2001 imposed a boycott on tanzanite after an article in the Wall Street Journal had alleged that sales of it were being used to fund the Al-Qaeda network, the BBC said.

Tanzania had exported 80 percent of its tanzanite to the US until the publication of the article, and the mining industry in Tanzania - the only country in the world where the gemstone is found - had been hit hard by the boycott, according to the BBC.

A recent study funded by the United States Agency for International Development (USAID), however, found no link between tanzanite mining and terrorism.

"We have seen no evidence that Al-Qaeda or any other terrorist group is currently using tanzanite sales to finance its efforts or to launder money," Michael O'Keefe of the US State Department office of East African Affairs was quoted as saying in the AGTA statement.

"The State Department's findings confirm our own determination that funding of terrorism is not a factor in the tanzanite trade," Maokola-Majogo said.

The USAID report did recognise, however, massive anomalies between tanzanite sales abroad and revenue received from the gemstone in Tanzania itself, the BBC said. The Tanzanian government last year recorded sales of US $16 million worth of tanzanite, yet the United States alone recorded sales of over US $300 million.

According to the BBC, Maokolo-Majogo said that smuggling of the precious stone had caused the discrepancy.

Reform of the mining law in Tanzania in 1997 offered attractive fiscal incentives for investors, including substantial tax breaks, and led to a "significant and rapid boom" in the sector, according to the Economist Intelligence Unit (EIU).

Tanzanite had traditionally been extracted by small-scale, artisanal miners, but professional mining companies had recently become responsible for much of the trade, the EIU said. There had been periodic conflicts between mining companies, artisanal miners, and local communities, but none had been serious, EIU added.

A Tanzanian government delegation headed by Maokolo-Majogo had met O'Keefe and industry leaders on Friday to discuss ways of restoring confidence in tanzanite and its supply chain, AP said.

AGTA, the Tanzanian government and other industry stakeholders on Saturday in Tucson, Arizona, had adopted the "Tucson Tanzanite Protocol", which requires miners and their employers to be licensed and to wear identification badges, Maokola-Majoga was quoted as saying by AP. The government would also develop a system to monitor the movement of tanzanite from the time it left the mine to the point of first export, he added.

"We have an obligation to consumers and to our own consciences to take practical, effective measures that will assure confidence in tanzanite," Douglas Huncker, executive director of AGTA, said.