Why tanzanite production in Mirerani is falling

Dar es Salaam. Lack of capital, soaring production costs, the nature of the rocks, and a scarcity of donors are cited as factors contributing to the decline of Tanzanite production in the little hamlet of Mirerani in Simanjiro District, Manyara Region.

According to the report on the state of the 2022 national economy, tabled in June in Parliament in Dodoma, raw Tanzanite output last year was 90,186.9 kilogrammes, compared to 177,144.5 kilogrammes produced in 2021, representing a 49.1 percent reduction.

Regarding processed Tanzanite, it also decreased from 120,458 carats in 2021 to 57,864 carats last year, equivalent to a decrease of 48 percent.

“The shortfall was due to the decrease in the production of the tanzanite in Mirerani mines and the finished mineral reserves,” the report, released by the Finance and Planning ministry, said.

The argument of the finished reserves of the mineral reflects on the claims of the Chairman of the Manyara Miners Association (Marema), Mr Justin Nyari, who said many miners were pulling out of the mining activities after investing a lot of money they borrowed from banks and selling their cars without getting the mineral.

According to a new report by the Bank of Tanzania (BoT), the mining of minerals and stones ranks last among the ten sectors that were empowered with loans from commercial banks in 2021 and last year, getting only 2.1 percent of all loans, despite playing a significant role in contributing to the national income.

“The mining of tanzanite requires patience, there are those who have sold their cars and houses, you can dig 15 kilometres deep and you still get nothing, what about those who took bank loans that did not bear fruit? Unfortunately, even the donors have now given up hope because they do not see the results,” said Mr Nyari.

Minerals minister Dotto Biteko said the Covid-19 pandemic also contributed to the low production of the tanzanite mineral.

“The market for this mineral takes place in Tanzania, so the big buyers during that period stopped coming to Tanzania and thus its production has been affected,” said the minister.

He said the low production of tanzanite was not felt during that period of the pandemic in the mining sector because of its minimal contribution to the sector in terms of earnings.

According to the Tanzania Mining Commission (TMC), tanzanite’s contribution to the mining sector’s income has been less than 10 percent, surpassed by gold, which contributes more than 80 percent.

“But, we don’t measure its national contribution only in terms of income; this mineral is the national brand, and the state of its production has started to improve despite its price challenges, as we are still working on them. The research shows that we have mined an average of only 15 percent of the tanzanite,” Mr Biteko said.

The fall of the tanzanite is being felt despite the Government having completed the construction of the infrastructure five years ago, including installing lights and security cameras and upgrading the road around the Mirerani wall to control mineral smuggling.

According to the amendment of the Mining Regulations of 2021, the trade of the tanzanite mineral as well as all activities of cutting, polishing, or value addition must be carried out within the Mirerani mines or any area of Mirerani and be approved in writing.

The ministry says the average price in the world market last year was $682.67 (Sh1.5 million) per kilogramme compared to $722.37 (Sh1.66 million) per kilogramme in 2021, equivalent to a decrease of 5.5 percent, and 326 carats worth $65.9 million were exported last year.

It also says 57,864.28 carats of the tanzanite, worth $19.15 million (Sh456 billion), were cut and processed last year, compared to 120,458 carats worth $276.8 million (Sh6.6 trillion) in 2021, equivalent to a reduction of 52 percent.

In order to scale up interest in tanzanite mining, Mr Nyari has advised the government to scrap or reduce taxes and levies on various imported mining equipment.

A senior geologist from the Geological Agency of Tanzania (GST), Mr John Kalimenze, says if a study on the rocks of the area is done, it will give the miners the hope of finding more tanzanite and avoid incurring losses by guesswork as they are doing now.