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Report: Tanzanite One defers production

In talks to cut workforce by 28 percent

May 07, 2009

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This 525.55-carat tanzanite was discovered at the Tanzanite One mining facility in Merelani, Tanzania.

London--Mining company Tanzanite One Ltd. said on Tuesday that due to decreased demand, it has postponed plans to increase production until 2012, and that it is in talks to cut its Tanzanian workforce by 28 percent to reduce costs, according to a report in Reuters.

"Recognizing that sales prices and demand may remain depressed, a revised strategy to defer the production expansion and manage costs down is delivering results, and mining operations are delivering positive margins," the company said in a statement.

Reduction in personnel numbers, plus other cost-cutting measures, has resulted in a 40 percent decline in operating costs over the last quarter, the company told Reuters.

Tanzanite One, which reported a loss in 2008 as revenue decreased 37 percent to $26.9 million from $42.6 million in 2007, said improvements in volume and revenue at its April 2009 sight compared with its December 2008 sight offer optimism.

Production was 390,000 carats during the first quarter and 520,000 until the end of April, with the company on track to achieve a revised target of 1.7 million carats for the year, the news source said.

Tanzanite One's marketing focus for 2009, according to Reuters, will be to create markets for smaller, lighter material, which represents approximately 70 percent of production. In addition, the company intends to start new markets in the Middle and Far East. It plans to hold its next sight in Dubai, United Arab Emirates, in either June or July.

Tanzanite One is the biggest miner of the blue-violet gemstone, which is found only in the East African nation of Tanzania.
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