Tanzania Decides To Ban Export Of Rough Gemstones
By Marc Choyt
Tanzania is rich in gold and gemstone resources. Yet, like many African countries with massive resources, it is a poor nation. Not enough money stays in the local economies. To help change this scenario, the government of Tanzania has recently decided to ban the export of rough gemstones and maximize the local benefit related to the gemstone economy.
In addition, Tanzania will not be issuing mining licenses to foreign companies. Mining will be reserved for locals; foreigners must be in a joint venture to participate. According to a press release, “The purpose behind this move is to develop a cutting and polishing industry in Tanzania itself and boost local employment. The gemstones under purview of the new legislation include diamonds, tanzanite, emeralds, rubies, sapphires, turquoise, topaz and others,” reports add.
At present, much of the rough gem material from Tanzania goes to Jaipur, India, which is a stone cutting center particularly for lower value gems. Tanzania’s move has the Jaipur, India, gem cutting concerned. Sanjay Phophalia, United Jewellers, in Jaipur said, “I am aware of this bill but there are lot of uncertainties which would be clear in the due course of time… the policy if applied could negatively affect the Jaipur manufacturing trade.”
My contacts who have visited those operations in Jaipur report that they are highly exploitative and child labor is quite common. This is probably why so many gemstones coming out of India are so inexpensive.
The net effect of this legislation is that it will bring more economic benefit to local economies, but the net effect of the law remains unknown even to some who will be most affected.
I contacted Shamsa Diwani, Executive Director of the Tanzanian Women’s Mining Association for her comment. She told me that she is still in the process of reviewing the law. “What I know they said is that Tanzanite should not be sold as rough stone, and they prefer all the stones to be sold as cut stones. They are also making more effort to small scale miners to add value on our gemstones, with programmes of soft loans to small scale miners which they have already advertised on the news papers.”
New polishing operations that are well run and ethical would make it more possible to source low end, possibly even “fair trade” gemstones out of Tanzania. Hopefully this new initiative will result in traceable, transparent gemstones that are ethically sourced and cut.
This new policy is a marked departure from how Tanzania has been utilizing its resources to date. Indeed, the country has often been treated merely a colony for exploitation by large companies.
For example, according to one study, Tanzania’s ’wasted’ golden opportunity. “Tanzania earned less than a tenth of one per cent of the value of gold mined in the country and exported from 2001 to 2007. Gold worth $3 billion was mined and exported in the six years, but the country earned only $90 million as royalties during that period. This is equivalent to a paltry 0.03 per cent.”
If other African countries take Tanzania’s lead, the implications could be massive for the entire gemstone sector.
