Tanzanite One

[tiptoe]

I''ve been reading a lot about this cartel. Apparently it''s in control of most of the tanzanite mines since it''s a one source gem. so far. (Can''t help but wonder why it''s only in Tanzania.) Anyhow, apparently it''s doing a DeBeers thing and will regulate production and pricing of the rough. It''s trading on the London Stock Exchange. I had their URL but can''t find it right now.

Will this increase the cost of tanzanite significantly?

I''m new here. Sorry if this''s been asked before.

 

[MJO]

Hello Tiptoe,

I heard about this a couple of years ago and thought about it myself before that (I am an Oppenheimer ). I read about my family history, Earnest, Francis, Harry and now Nicky with a plan to control the supply and raise the price of diamonds and I thought tanzanite would be an even better stone for this (since it is a one source stone). Once you control the rough supply you buy back all the top quality stones on the market. After this is done you advertise heavily and have the rest of the supply (you don't own) bought by the public. This creates a demand for the stone and an artificial shortage. Now that the apetite is stimulated and more people are looking for the stone and the allure of rarity, people crave it even more therefore pushing the demand and price even higher. Since I am not as wealthy as my distant kin and have never even met them I decided the only way for me to do anything to do was to buy as much as I could afford when the price was $250-285/ct in 2001-2002. I believe my scenario was correct and this is just the beginning of the price escalation. In the 1970's the price of Top Quality Tanzanite was even higher when it was being marketed and sold by Tiffany.

 

[WinkHPD]

MJO,

I appreciate your comments and find them interesting. I will take an oposing position from you.

I believe that there is a fairly low ceiling on Tan<anite pricing due to its softness and inappropriateness for use in rings.

I believe that there is still some room for upward price mobility, but that soon you will bump into the pricing for sapphires and that as long as beautiful sapphires are available that they will prevent the extreme upward price mobiloity of the tanzanite since the public does not know them as well as sapphires and will certainly not pay more for a tanzanite than for a comparable sapphire.

Since tanzanite is one of my favorite stones I would not be too distressed to be wrong, but that is my take on the situation at this time.

Wink

 

[MJO]

Hi Wink,

I do agree with you on tanzanite being soft but that only will make it more rare in time. Over years (IF there are no more sustantial finds of top tanzanite) there will be fewer and fewer due to breakage and recutting. I think top tanzanite is more beautiful than average sapphire and top sapphire of comparable size and color commands a very high price. Also for collectors the rarity factor will still be there, just like unheated sapphire is much more expensive than heated and natural sapphire is much more expensive than sysnthetic (even though synthetic is much better looking).

Why is natural alexandrite expensive? Most stones aren't that good looking. Ussually one color or the other is not great but the rarity makes it expensive. The very rare alexandrite is beautiful in every aspect but those are few and far between. Also the cost makes it only available to the extremely well healed.

What makes paraiba tourmaline so expensive? It's the rarity. Is it hard enough for an everyday ring. Not really. I had a ring made for my wife but she won't wear it everyday. Was it expensive when it first came out? Yes. Did people complain at the price of a few hundred dollars per carat for a tourmaline? Yes. Did it go higher anyway? Yes. Would you pay $1,000/ct now for a 3ct VVS neon blue stone? I would in a heart beat . Is it overpriced now? Probably. Will it come down in price? I have know Idea. Are people some people paying $10,000+/ct for the same stone now even though there are other stones with the same color that are cheaper? Only the ones that can afford too.

Anyway, I guess I should stop rambling now.

 

[tiptoe]

Thanks for the input, everyone.

If tanzanite''s set low enough, as with apetite, etc. it''s fairly safe from abuse.

I love the light violet stones (the cheaper ones) but bought a 3 ct. gem quality dark oval and a 5x5cm oval. I also have several small lots (5 cts) of accent cut violet ones. I hear there''s a blue/green tanzanite too.

Well, it''ll be interesting to see what happens with tanzanite.

 

[imperial Jewels]

Hello all,

The following is an article below I wrote last year following the floating of Tanzanite One on London's AIM. You may find it of interest.

Hello MJO, long time no speak, very wise to buy in 2001 - The best time to buy tanzanite was following the 9/11 disaster when the price crashed following celebrity lawyer Ed Hayes' multi billion dollar litigation lawsuit against tanzanite traders, whom it was alleged were in partial coercion with Al-Qaida. After the announcement of the lawsuit, panicking traders in Thailand and India dropped the price as low as $120 a carat for large quality pieces from November 2001 until the Tucson Tanzanite conference in spring 2002. Some cynics have speculated the rumors of Al-Qaida's involvement in Tanzanite trading was a deliberate black propaganda exercise to allow AFGEM and other elements connected with the ailing tanzanite mining company to buy cut tanzanite back from the open market at a cheaper price than it could be mined!

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New Tanzanite Mine Owners Raise Capital For Continent Wide Marketing Campaign

Tanzanite One, the company that purchased African Gem's (AFGEM) tanzanite business and assets in May last year (2004), began trading on London's Alternative Investment Market on Friday (October 2004) after 5 million British Pounds (approx 9.5million U.S.D) were raised in share placements.

The company now owns the rights to 60% of the world's reserves of tanzanite, the stunning deep blue jewel that is found only in one five-kilometer-square area near Mount Kilimanjaro in Tanzania.

In May, Tanzanite One made a bid for the assets, holdings and mines of tanzanite mining giant AFGEM saying that a poor rating ascribed to the company on the Johannesburg Stock Exchange (JSE), had hobbled the mining company's ability to raise capital and expand both its tanzanite mine and marketing capabilities.

While tanzanite is popular as a jewel in the US, it is relatively unknown in Europe, where the company intends to launch a wide-ranging marketing campaign. "They want to grow the total market value of the tanzanite trade," said Joe Nally, director of corporate finance at Williams de Broe, which is advising Tanzanite One.

He added: "They have now established a marketing capability in London, where tanzanite will be marketed to upmarket jewelers and plans similar campaigns in Paris and across Europe and Asia in the coming year, in order to boost the gem's price.

Tanzanite currently sells for a tenth the price of diamonds, despite its comparative rarity. But analysts connected to the new owners of the mines think sophisticated marketing and more tightly controlled supply could almost double the price. Reserves are expected to be exhausted by 2020.

 

[MJO]

Hello Simon,

I was just looking at that 10ct tsavorite I bought from you a few years back. I agree with the synics. I think as a business move the timing was perfect to take over the tanzanite market. I bought from others based in Thailand so I paid a markup but the price of $250-$285 was still a bargin in my opinion. Now that the stock in the hands of those that panicked is low and in the hands of the market controllers more advertising to europe to bring up demand and percieved scarcity should mean higher prices over the next few years. What do you think?

Also what do you think of the price direction of tsavorite and Mandarin Garnet? I think they have peaked.