AZGem Gems
December, 2001
The World's Most Useful
Gem & Jewelry Monthly Newsletter

Written by Carolyn Doyle for customers of
The Dorado Company
and other visitors to the website who subscribe.


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Usable Gems... and a little opinion.


Gem News And Thank You's

Sitting here in front of the computer and looking back on the Year 2001, several things stand out…

  • Of course, the thing that jumps into my mind first is the despicable September terrorist attack against people who were murdered for being Americans.
  • Being thankful for what we have and have accomplished also comes to mind. Let me stop right here and thank each of you for making my year a success.
  • The economy seems to have been in the news every day of this year. It's been up, it's been down… and many people have an opinion on what's in store. I'll give you my opinion below.
  • News about gems, and gems in the news also comes to my mind.



There has been a yearlong struggle over tanzanite mining. On one side of the struggle are independent miners. On the other side are the Tanzanian government and a company named African Gem Resources Ltd. (AFGEM).

AFGEM has been awarded a mining license by the government in the tanzanite mining district. This district is the only source in the world for tanzanite.

In addition to royalty payments to the government, the license requires AFGEM to develop community infrastructure improvements such as roads and water treatment facilities.

AFGEM has stated a vision where they manage the supply, quality, and price of tanzanite for the benefit of all miners, including the independents… who would sell their rough to or through AFGEM.

AFGEM plans to start marketing their tanzanite in mid 2002.

The miners see AFGEM as a threat to their livelihood and independence. They claim the mining concession was illegally awarded to AFGEM.

The miners also charge the company with human rights abuses, and failure to develop enough infrastructure improvements.

There have been noisy confrontations, minor dust-ups, serious riots involving injuries, and lots of legal action.

The High Court of the United Republic of Tanzania recently dismissed the lawsuit filed by the independent miners against AFGEM and several other defendants. The miners plan to appeal the decision.

Those of us in the gem industry have been following this story with some interest, but it is strictly a local and industry news story.

However, as that struggle was being settled in court, there was testimony in another Tanzanian court that has made a lot of news.

There has been testimony that the Usama bin Laden terrorist organization derives some funding from the mining and trading of tanzanite!

The Wall Street Journal, ABC News, and others have done stories on this issue. It does appear that at least one bin Laden associate buys tanzanite at the mines and sells it in Hong Kong… with at least some of the profits going to fund terrorism.

In one offshoot to this story, there is a wave of indignation in the gem industry regarding a perceived strong bias in the way ABC presented their story. You'll likely hear more on this one.


Conflicts Stop Gem Mining

The series of wars in Afghanistan has slowed and now stopped gem mining in that country. The mountains of Afghanistan have produced fine gems through the centuries… and they will again.

The Indian - Pakistani conflict in Kashmir has had a great negative impact on gem mining in that area.

The civil wars in Africa continue to impact colored gem and diamond mining in several countries.

Communist rebels in Columbia and Peru continue to raid gem mines in those countries. This has caused some mines to close.



A Canadian mining firm is preparing to mine sapphires in Southern Madagascar. As you know from reading this newsletter, Madagascar is becoming increasingly important as a gem source.

And another Canadian mining company is shutting down. Pacific Sapphire Co. has been working the famous Yogo Gulch property in Montana.

Yogo Gulch is famous for its beautiful blue sapphires. This mine is by far the most famous sapphire property along and around the upper Missouri River in Montana.

Like most sapphire mines, Yogo Gulch produces sapphires of many colors. But it's the gorgeous blues that keep tempting miners to try where others have failed to make a financial success of the property.

Many have tried since sapphires were discovered along the river in the mid 1860's, but so far long-term financial success has not been there.



Spinel, the first cousin to ruby and sapphire is attracting a lot of interest these days.

The demand for (and the price of) both red and blue spinel has been climbing all year.

The good news is that the price for gem red spinel is still below $300 per carat, and gem blue spinel is around $150 per carat.

Other colors of spinel have seen only small price increases ($50 per carat range) so far… but that will change as the word about spinel's beauty and value gets out.

We'll do a feature story on spinel in an upcoming issue.


The Economy

From our small window on the world at The Dorado Company we get a pretty good idea of the strength of the U.S. and world economies.

Worldwide, we entered this year with the economy slowing down. Buyers were not visiting the mines and buying rough. Cutters were seeing inventory build up as sales to jewelry manufacturers and small gem dealers slowed.

The summer and fall months were slow here at The Dorado Company… but things started to pick up after October.

We've just had our best December in ten years. Based on our own experience and what we're hearing from people we deal with, we're becoming optimistic.

We think the economic indicators will be showing good strength by next summer in North America, much of Asia, Russia and neighboring republics, and parts of Africa.


Happy New Year

I send you my best wishes… may you have a happy and rewarding 2002.

Until next month… please, visit me anytime at for a great selection of colored gems at great prices.

Carolyn Doyle

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