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AFGEM Comments

AFGEM, the focused coloured gemstone group whose Tanzanian subsidiary, Merelani Mining Limited is currently developing a tanzanite mine in northern Tanzania, has been the subject of much recent press. Despite continuous allegations by small-scale miners and their associations, AFGEM has emerged an honourable player in the industry: a sentiment supported by the Tanzanian government and underscored by the unanimous findings of the High Court of Tanzania, which recently struck off the law suit instigated against AFGEM with costs. The company is currently engaging in constructive dialogue with individuals and industry associations and is "completely committed to achieving a win-win solution for all players."

The initiators of the smear campaign waged against AFGEM have fabricated a multitude of allegations. Company spokesperson Joanne Herbstein, comments: "We are investing significant resources into the development of the tanzanite industry for the benefit of all players. We are creating formal employment, contributing to the community, growing the world market for tanzanite, and making significant technological advances with respect to its mining and processing. We are also formalizing the industry, to ensure that tanzanite leaves Tanzania via the legitimate channels. It was to be expected that those that have benefited from the illegality that has plagued the industry would vehemently resist our efforts."

What has heartened AFGEM is the government's support of their vision. After decades of not deriving substantial benefit from its most unique resource, Tanzania has recognized the importance of growing and formalizing the tanzanite industry. Estimates of the size of the world market at wholesale are as high as US$300 million per annum, yet Tanzania, the world's only known source, officially exports less than 10 percent. AFGEM asserts that the same illegality that has plagued the tanzanite industry for decades is the source of the resistance the company has faced.

Small-scale miners have accused AFGEM of monopolizing the market through the company's laser-marked brand: Tanzanite Foundation. Herbstein assures that this is not the case. "Audited figures from the last financial year indicate that AFGEM's sales of tanzanite represented at most, three percent of the world market." While AFGEM intends to grow that figure in the future, they will simultaneously invest substantial resources into expanding the total market for tanzanite.

"Our branding strategy is not well understood by the uninformed, but branding has a proven track record for growing the total market of a product," Herbstein contends. "We are branding premium quality polished tanzanite only. Our branded tanzanite is a niche market product aimed at a select level of consumers. It will eventually demand a premium, which will be re-invested into promoting tanzanite and continually expanding the market." According to Herbstein, branding is not a new concept in the tanzanite industry. "The difference between the tanzanite branding that other companies currently conduct and AFGEM's branding strategy is that AFGEM's brand for tanzanite is a Tanzanian 'home-grown' one. It has been developed to promote tanzanite as a uniquely Tanzanian resource," she says.

AFGEM has cited its primary objective as being to marry their capital and technological resources with Tanzania's natural wealth for the benefit of all stakeholders, including Tanzania and its people.

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