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Gambling with colored stones?

This fascinating game gets played where the resources are rich, but the people are poor.

It is like being on the stock market floor, I suppose. A point upward or downward can quickly bring delight – or defeat. Take tanzanite just for starters. There is only one geographical area of origin: Tanzania, which justifies its name, and what a decade they’ve had.

Back in 2010 the country’s government banned the export of rough tanzanite.

The world was still reeling when, a few months later, the ban was softened to simply prohibit rough tanzanite weighing 5 carats or more from leaving. The government promised to “fully and rigorously” enforce a stricter ban at some vaguely defined future time. And while they hinted that it would happen by mid-2011, it took them the better part of the decade. Indeed, they finally, cautiously, started doing this in 2017.

The aim of the 2010 ban seemed laudable at first; to encourage the development of a local gemstone cutting network, generating the formation of a professional and business class in the sector, and the creation of jobs, increasing productivity and reviving the mining sector related to gemstones.

So what happened? The government discovered that cutters of precious stones cannot be pulled out of a magic hat like rabbits and, for a profitable training, it takes much more than some arbitrary deadline set by some bureaucrat with dry feet under a desk in some ministry in Arusha.

Playing the odds

Was it a good gamble, even to begin with? I’m not so sure. In Jaipur, India’s “city of gems”, the breeding-ground for cutters who thrive there boasts fifteen or twenty years of experience. Moreover, it’s experience borrowed from earlier generations.

Now let’s suppose that in Tanzania they didn’t give a toss about the experience of previous generations and that they presumed themselves the coolest of the cool. Prior to posturing, did they ask themselves how to bring up hosts of cutters all at once to handle the rough piling up within their borders? It would have been prudent, especially since they had too few to handle what had been remaining in-country at the time?

Taking it farther – If little to no rough Tanzanite was going reach the cutting centres outside the country’s boundaries was it foolish to assume that (given the law of supply and demand) prices would tend to rise? After all, those in Jaipur, crouching in their cutting factories, when deprived of all that bonanza and the scarcity of rough tanzanite would inevitably fall back on other material to keep their business running. Retailers, for their part, would be forced to tread in their footsteps, turning to alternative gemstone promotions.

Logically, as a result of alternative solutions and promotions, the demand for the blue stone might slacken, meaning the price would swoop down too.

Oh, Jupiter Pluvius, give us a heavenly sign: buy or sell!?

Afghan abundance

Let’s now switch to Afghanistan. Here there is such an abundance of aquamarine, tourmaline, ruby and sapphire, along with well-known lapis lazuli, that it will leave you flabbergasted.

The fact is that so far very little has managed to slip out from the borders due to the depths of the wars that always have and always will rage there.

The situation is even more confounded by the meanders of a dispute that has dragged on from time immemorial between the central government and diggers/miners – revolving around ownership rights on the lands where the mines are located. There has been an ongoing attempt by the government to legalize a situation traditionally regarded as a sort of Afghan amnesty, in short, with the declared intention to tax both the cutting and the export of the above stones.

Here, again, on it’s face the intent seems laudable. Formal legalization will lead to an increase in production, cutting work and export, with inevitable positive effects on employment. even on the living conditions and prospects of the whole sector, including families, clans and villages. It is expected to turn the miserable “water” worth a mere $50 million annual return into precious “wine” of an added $300-500 million dollar annual turnover in the space of five years.

Hey, wait a minute –

How strange. Weren’t they saying pretty much the same thing in Tanzania? They were expecting, by virtue of the miraculous legal and tax wand, to export – in the years to come – huge quantities of these materials …lapis lazuli, aquamarine, tourmaline, ruby, emerald…

So they predict. But can I ask a question? If the supply grows enormously over demand, will prices go up or down?

A point upward or downward? O Jupiter Pluvius, send a lightning bolt if it is downward, or a ray of light among the menacing clouds if it is upward.

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