Who own tanzanite industry?

Dar es Salaam. Tanzanite, the gemstone found only in Tanzania, is owned by Tanzanians by more than 70 per cent, but the real wealth from these unique mineral does not benefit the majority of Tanzanians.

According to a recent survey by The Citizen, the multi-billion wealth created from tanzanite is spirited abroad due to lack of industries for value addition and smuggling trend by some Tanzanians who own the mines without paying royalties and related taxes.

Igunga MP Dalaly Kafumu told The Citizen that the tanzanite nightmare, which prevents Tanzanians from reaping real benefits, would end with the implementation of the government regulation of 2004 requiring that the tanzanite-rich Mererani area in Manyara Region be turned into a reserve zone and fenced.

Dr Kafumu, a renowned geologist, said that Tanzanians could never reap tangible benefits from the mineral under the current structure of ownership.

He said local tanzanite dealers own 70 per cent in addition to the State Mining Corporation which owns 50 per cent of shares in South Africa’s Tanzanite One that accounts for remaining 30 per cent of the precious minerals found in Mererani.

This implies that Tanzanians, including tycoon Reginald Mengi, own 85 per cent of the tanzanite stake, but in real terms such ownership does not translate into actual benefits for Tanzanians as the government coffers do not tap enough revenue from tanzanite.

“My personal view is that we should implement the government regulation of 2004. Under the regulation the tanzanite blocks located in Mererani must be declared a reserve area and a strong fence built around it to make it easy to track revenue generated by mining companies and small-scale miners,” said Dr Kafumu.

Dr Kafumu , a former commissioner for minerals in the Ministry of Energy and Minerals, added that the country should emulate Botswana’s model of ownership of biggest diamond reserve in the world under the partnership between the government, local companies (Debswana Diamond Company (Pty) Ltd and De Beers.

“I’m not for giving the lions’ share of tanzanite to Stamico, but there must be a partnership company comprising government shares, TanzaniteOne shares and other shares from indigenous companies so that they can be tracked to pay royalties and taxes. Stamico’s past experience has demonstrated the parastatal was inefficient and it lacked capital base. We should emulate Botswana in this regard,” he said.

In October, the government said it would blacklist gemstone dealers found to be involved in tanzanite smuggling. Opening the 2nd Arusha International Gem, Jewelry and Minerals Fair (AIGJMF), Energy and Minerals deputy minister Stephen Masele called for zero-tolerance to tanzanite smuggling.

His remarks came in the wake of reports that Tanzania, with GDP per capita of $570 as of last year, was losing more than $1.36 million every month in illegal exports of minerals.

It is estimated the annual loss from illegal tanzanite export amounts to $16.32 million (Sh26.1 billion), which can be spent to build not less than 130 health centres countrywide, assuming that the cost of building one health centre with modern facilities is Sh200 million.