Smuggling claims could dent the Tanzanite trade

What you need to know:

  • While still in recovery from the Covid-19 pandemic, the tanzanite industry is being dealt another blow with reports of rampant smuggling in the mines

Arusha. The once robust Tanzanite industry could be heading towards a slip following reported claims of rampant smuggling.

Fears are that some buyers abroad may either stop buying the rare gems or their prices in global markets could fall.

“These claims are quite damaging although they have not been verified”, said broker Jeremiah Kituyo.

He said the entire value chain of the mineral, mostly excavated for the international markets, would suffer irreparably.

He made the remarks on Wednesday during a tour of the tanzanite mining site at Mererani by Arusha-based journalists.

The day-long tour follows recent unverified reports that there was rampant smuggling of the mineral from Mererani to the markets abroad.

The claims appear to have sent waves through the main importers of the mineral notably in the United States, India and Germany.

The people behind the alleged smuggling remain a mystery especially after the security system was put in place in 2018.

Efforts to reach the minister for Minerals, Dotto Biteko, or his deputy, Stephen Kiruswa, proved futile yesterday.

However, impeccable sources at the ministry confided in The Citizen that the smear campaign could have originated from the industry itself.

“It is a fitina (mischief) that may be from people who used to own mine blocks at Mererani or general dealers”, a senior mines officer hinted.

In 2017, the government erected a 24 km perimeter wall around the mining site to ensure no minerals are smuggled out.

The government said that the measure was taken to curb smuggling of the rare gem that is mined nowhere in the world except Mererani.

Dr Biteko has repeatedly said that the government will no longer leave anything to chance in the fight against smuggling.

“Anyone arrested with the precious gems will be stripped of his mining licence and slapped with a Sh50 million fine”, he was once quoted as saying.

The security measures in place include conducting thorough inspection using scanners on people leaving the mine premises.

The reinforced security was put in place following a successful installation of 24-hour CCTV surveillance cameras on the walls.

With surveillance cameras and barbed wires, the 20 feet high wall has reportedly helped in monitoring suspicious activities in the site.

The gemstone dealers, miners and exporters interviewed at the site pleaded ignorance of any sort of smuggling as alleged.

Mr Sammy Mollel, the chairman of Tanzania Mineral Dealers’s Association (Tamida), said that he and other stakeholders were at a loss over the information.

He said that the kind of security mounted around the Mererani mines would hardly provide a loophole for “rampant smuggling” as alleged.

Persistence of such reports, he warned, would deal a blow to the industry which is yet to recover from the Covid-19 pandemic.

“Tax evasion is not good in international markets”, said Tamida boss.

He warned that if, “the truth” on the tanzanite market is not told now, the industry can fall back to 2021 when it was associated with terrorism something that required more efforts to restore the present confidence.

After those reports in the Wall Street Journal, Mr Mollel, as Tamida chair, was roped in a high powered team sent by the government to the US to counter the claims.

It is estimated that between 75 to 80 percent of tanzanite is sold in the US to Tiffany & Co.