JOHANNESBURG (miningweekly.com) – Aim-listed coloured gemstone producer TanzaniteOne reported that production for the year ending December 2008 had totalled 2,2-million carats of tanzanite, produced from 42 318 t, at an average recovery of 52 carats a ton.

This was a 30% increase in production figures recorded for 2007.

The company said in a statement that its Merelani mine, in Tanzania, had produced 1,1-million carats of tanzanite from 20 380 t processed in the first half of the year. Production remained constant during the second half of the year, recovering 1,1-million carats from 21 938 tons processed.

TanzaniteOne stated that its ability to increase production to three-million carats a year remained unchanged, however, production would only be increased as markets returned to normality.

“Responding to the uncertainties created by volatility in the world financial markets, production at the Merelani mine has been revised to a more selective form of stoping and targeted high-grade mining. As market conditions improve, we will adjust operations at the mine accordingly.”

The impact of the global financial crisis resulted in tanzanite trading prices weakening by as much as 45% into the last quarter of the year, the company stated. As sales practically ceased, trading operations in the Northern Tanzanian city of Arusha were suspended owing to erratic market conditions during the latter part of 2008.

As the price of tanzanite in Arusha becomes less erratic, and demand progressively returned to the tanzanite sector, TanzaniteOne intended to reenter the trading market.

During the year under review, the company sold 896 635 ct, however, fewer parcels were sold during the second half of the year, reflecting the impact of the global financial meltdown on the tanzanite market. Sales in the second half were $6-million, down 72% from the first six months.

Revenues from ordinary activities for the period decreased by 37% to $26,9-million from $42,6-million in 2007. This was owing to the impact of the global economic downturn in the last three months of the year.

“While market conditions remain difficult, there are signs, subsequent to the year end, that buyers are returning to the market, and demand appears to be improving from the extreme low levels experienced in the last quarter of the 2008 financial year,” the company said.

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