Queen of Kilimanjaro, a spectacular tiara, features the world's largest tanzanite gemstone at 242 carats.
When a blue zoisite came across Tiffany & Co.'s desk in the late 1960s, the company was quick to identify a fatal flaw.
Zoisite, named after the 19th century Slovene baron who studied the crystal, sounded far too much like "suicide" in the opinion of executives. Since its single known source was the foothills of Mount Kilimanjaro in Tanzania, they smartly named it "tanzanite" and said it could be found in only two places in the world: Tanzania and Tiffany's.
Since then, the unusual gemstone, which takes on three colours after heating – blue, violet and burgundy – has been trying for more marketing coups.
Stories circulate about a Masai herdsman who discovered it when lightning struck a crystal and it shone blue; marketers play on its uniqueness, saying it is a thousand times rarer than a diamond and will run out in 20 years.
It got itself added to the list of birthstones for December, which helps catapult it into consumer consciousness, and then expanded the birthstone legend, asserting tanzanite is the perfect - and required - birth gift from mother to daughter.
None of that has helped buoy the stone through rough times, however. Prices have fallen from a peak of $26 (U.S.) a carat in 2006 to $8 today. More fashion item than collector's piece, auction houses barely sell it at all.
"It's not a stone that we seek out regularly for auction. If it comes to us, typically it is not included in the sales because we just don't have the market for it," says Brett O'Connor, senior specialist for jewellery at Sotheby's in Geneva, adding the "relatively inexpensive" gem "comes in and out of popularity." "It's not disdained as nouveau; it's less desirable because it's not a natural colour," he explains.
Worse, bad publicity, a collapse in consumer demand and new legislation have all conspired against TanzaniteOne, the only modern industrial tanzanite mine, which produces 40 per cent of the world's supply.
Bernard Olivier, chief executive officer of Richland Resources, which owns TanzaniteOne and is listed on the AIM stock exchange, says sales halved after the mine was unfairly linked to funding al-Qaeda and again when the global crisis hit.
"We're the only mine with a letter from the CIA saying we are okay," says Mr. Olivier, referring to an investigation conducted by the US, following claims the gemstone was funding al-Qaeda activities, which the company – and eventually the CIA – said were unfounded.
The final straw came when Tanzania banned exports of rough tanzanites in an effort to develop a homegrown cutting and polishing industry. The ban merely spurred smuggling among ill-regulated artisanal miners who dig up 60 per cent of tanzanites, says Mr. Olivier, making consumers wary of buying the gem lest it be unethical.
Many artisanal miners, who dig makeshift shafts so deep they collapse, also make underground incursions into TanzaniteOne. Things turn nasty: the artisans often throw makeshift bombs underground.
Yet production at the mine, which employs 650 people and has paid $26-million in tax over the past five years, is still rising, at a record 2.4 million carats in 2011, with decent grades. Cash costs per carat are rising too, however, from $1.41 a carat in 2005 to $3.69 in 2010. While the company made a $6-million profit in 2008, today it is less than $1-million. Mr. Olivier says prices are still 20 per cent below those of 2008.
XCAP Securities, a broker and market maker for Richland, says the share price on AIM should be 50 pence (79 cents) a throw. Instead it languishes at less than 10 pence.
"It's frustrating. We are a producing mining company, but our share price is at a level similar to a high-risk exploration company," says Mr. Olivier, whose company has since diversified into tsavorite mining and sapphire exploration.
All is not lost. Gavin Pearce, the marketing guru, who helped popularize small pink diamonds in Japan when white diamonds were de rigueur, has dedicated himself to selling tanzanite in Asia, where he says aspirational consumers prefer jewellery with many, multicoloured stones, perfect for tanzanite's varied spectrum and sizes.
Whereas the U.S. market comprised 90 per cent of sales three years ago, Asia now takes 40 per cent. That pleases Mr. Olivier, who worries that pricing risk is tied to the U.S. economy.
The company is translating its website into Chinese, while at least five of its eight buyers are active in Hong Kong and elsewhere in Asia.
Mr. O'Connor says some Asian markets have also traditionally commanded niche prices, such as Japan's love of the paraiba tourmaline, a bright blue-green gem. It fetches "huge prices in Japan and nowhere else."
Mr. Pearce used to work at Australia's Argyle diamond mine, where marketing also proved crucial. The yellow and brown industrial diamonds that comprise 95 per cent of output and are "sold for drill bits" were rechristened "cognac" and "champagne" and sold as jewellery. With it came a huge price rise.
Entry into Asia helps tanzanite sales in a similar way. Only 20 per cent of tanzanite production falls in the dark blue and purple spectrum favoured in the United States. The remaining pale blues and the odd green, yellow and pink tanzanites fetch only a fifth of the price. Mr. Pearce developed specific cuts to make the small pale stones dazzle.
"We are trying not to say that a lighter one is poor quality or inferior," says Mr. Olivier. "If someone tells you, 'You want the top end and the top end is the dark blue,' that's what you buy.
"We are saying some of the paler stones sparkle far more, are more alive. It's all about being indoctrinated."