Tanzanite One’s
processing plant
in Tanzania
 
Dar es Salaam, Tanzania — MININGREVIEW.COM — 19 March 2009 – Tanzanite One Limited – the world’s largest miner of the blue Tanzanite gemstone – has reduced production because of the decline in demand, and the company is in talks with labour unions about cutting as much as one-third of its workforce.

“The drop in demand, as well as falling prices, have negatively impacted cash flows,” chairman Ami Mpungwe said in an interview here with Bloomberg News. “We have taken certain measures, including scaling down operations, and we are considering retrenchments.”
 
Mpungwe revealed that Tanzanite One had shut some underground shafts at the Mererani mining site in northern Tanzania, but he declined to say what proportion of production was being halted.

“The company is also in talks about dismissing as many as 190 of its 600 employees,” he said.

Bloomberg News reports that the world’s only known tanzanite deposit is a strip at the foot of Africa’s tallest peak, Mount Kilimanjaro, about 60 km south of Arusha, in northern Tanzania.
 
Sales of tanzanite – which is 1 000 times more rare than diamonds – are under pressure as the global financial crisis dampens demand from jewellers and consumers of luxury goods in the United States – the largest buyer of the stone.

“Demand has fallen by as much as 60% in the last six months,” Mpungwe said. Tanzanite One’s production had risen to a record 1.8 million carats in the nine-months through September 2008 from a year earlier, and the company said at the time that it planned to increase production to 3.1 million carats by 2011. “This goal is still attainable, but realisation will depend on market conditions improving,” Mpungwe added.

Mining provides direct employment for about 14 000 workers in Tanzania – Africa’s third-largest gold producer, after South Africa and Ghana.