One of the most serious policy problems facing the minerals sector in Tanzania has been establishing tighter controls on small mining and its marketing network without crushing it. A recent collapse in the Tanzanite market brought that issue to the fore. In October 2001, the Wall Street Journal published an article alleging that al-Qaeda terrorists were trading in Tanzanite, and American jewelers who sold it were thereby supporting terrorists. Several major jewelry chains withdrew from the market, setting off a sharp drop in international prices. Prices of Tanzanite fell 30 percent or more in November and December 2001, causing widespread unemployment in both mining and tourism in northern Tanzania.

Through a cooperative agreement with Chemonics International, USAID assisted the government of Tanzania to establish procedures to document and track the path of Tanzanite from mine to consumer. This helped to ensure transparent trade by registered dealers throughout the global chain. Al-Qaeda and other terrorist groups will not find it easy to circumvent these tight new procedures. These USAID-assisted corrective measures in the gem trade also contributed to economic revival in northern Tanzania. The Tanzanite market has since recovered and stabilized. In 2002, major U.S. retailers again carried Tanzanite in their major fall marketing season.