Since its accidental discovery in 1967 by Manuel De Souza in Arusha (Tanzania), Tanzanite has risen to become one of the darlings of the gemstone world. Indeed, it has been hailed by Tiffany & Co as 'the most important gemological discovery of the century' and because blue is the most popular color of gemstones it was deemed that its marketing potential was huge.

Indeed, Tanzanite is now currently outselling diamonds in some parts of the world (notably South Africa), and recent demand from rapidly developing economies such as India and China who have seen an increase in affluence, has helped to place Tanzanite at the forefront of colored gemstone sales.

Due to the fact that Tanzanite is found in one single area in Tanzania, and because supply is finite, with estimates stating that Tanzanite (in the top grade) will be completely mined out within the next decade, many have deemed Tanzanite as the 'Stone of a Generation' and one which will make an excellent investment. As such this article will address this issue and explore whether or not Tanzanite can be deemed viable as an investment.

In any free market economy the main driving force of the market is based upon supply and demand. When something is in high demand, yet its supply is limited in that it cannot cope with the demand, then obviously the price of the commodity in question will skyrocket (a modern example of this being oil).

Of course this theory is fundamental to determining whether or not Tanzanite is a viable investment. If we look at the following facts it is not difficult to determine that Tanzanite does indeed have valid investment potential.

Firstly, Tanzanite is unique in the sense that it can only be found in one single area of Tanzania, and that the Geographical conditions which were in place when Tanzanite was formed, have been said to have a 1:100,000 probability of ever occurring again with Geologists stating that Tanzanite is 1000 times rarer than Diamonds. Clearly therefore on the supply side we can see overwhelming evidence that supply is limited, and this continues to be the case as Tanzanite is minded heavily to meet the unappeasable global demand. Indeed, Tanzanite is now very difficult to find in the finer qualities, and recent estimates have stated that at the current rate of mining (which is inhibited by poor design) may only last another 10 years at the most. Thus with a rapidly dwindling supply, Keynesian theory and common sense dictates that Tanzanite prices will increase to record highs, with some estimates placed at $10,000 per carat for the finer grades. Indeed, Tanzanite prices tripled between 2002 and 2005, and in more recent times have risen an additional 50% between 2007 and 2008 with prices continuing to rise exponentially until Tanzanite is fully mined out.

In the case of the demand for Tanzanite, it is growing annually and due to voracious marketing by Tanzanite One, The Tanzanite Foundation, and The Tanzanite Authority its popularity continues to rise. Indeed, Tanzanite has been marketed by Tanzanite One as 'The Birthstone of A Generation', and is the only birthstone to be added to official birthstone list since 1912; having been adopted as a December birthstone by the American Gem Trade Association.

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