MULTI GEMS LAPIDARY LAB.

Introduction :

Background.

The present study relate to the proposal for the establishment of a lapidary laboratory in MBEYA town centre. The main findings highlight the following salient aspects :

1. Availability of raw materials and acquisition of materials
2. Market and project capacity.
3. Project egineering including proposed machinery and equipment.
4. Financial aspects and investment
5. Organisation and management
6. Recommendation..

The work on this assignment got underway from early April 1996,and 1999.When Mr.Chillier Rene from www.twiga.ch visited NDINGO’ S enterprise company in MBEYA, where detailed discussions were held and conception on this project was conceived. However,relevant government ministry were approached so as to incorporate in the study the existing policy of the government about the establishment of lapidary industry.

 PROJECT BACKGROUND INFORMATIO N

Tanzania is among the world countries which is naturally endowed with occurrence of various types of minerals of which includes : Diamond, rubbies, Alexandrite (chrysoberly,Emeralds,Tourmaline, Aquamarine, Sapphires, Zircona, Topaz, Tanzanite, Spincels, Amethyst, Gold, Gamets and etc....

The proposed MULTI GEMS LAPIDARY LABORATORY is earmarked to cater for the customers and small scale miners within the regions of MBEYA, IRINGA, MOROGORO, RUVUMA, RUKWA and MTWARA regions respectively. Currently relevant projects are only found in ARUSHA, MOSHI and DAR SE SALAAM although the other regions are potentia and endowed with occurrence of various types of minerals as mentioned above,Lack of necessary tools and know how has been hindrance to the development of small scale miners of which in turn make government to loose income-tax as most of the beneficiaries in this regards has been illegal foreigners who buy these minerals cheaply and illegally from the miners and export them abroad illegally. The establishment of MULTI –GEMS LAPIDARY

LABORATORY in MBEYA region, will enable the small scale miners within the aforesaid

Regions have and access to sell their products directly to our Laboratory, where they will be paid accordingly and rendered assistance and advise on various matters pertaining to the

development of mining Industry in TANZANIA .

RAW MATERIALS AND ACQUISATION :

1. GENERAL SITUATION :

While examining the raw materials supply position from natural resources, its of

practical significance to take into account the pattern of socio-economic conditions,

which directly or indirectly influence such supplies. This in an effort to highlight some

of the relevant indicators, the following datas give background information..

Buying Directly To Scale Miners

This will involve Intensively travelling to various mining places according to order availables at the lab.

SMALL SCALE MINERS SELLING DIRECTLY TO OUR LAB.

This will enable us to reduce travelling expences for fuel and other costs as the miners from various mentioned places will be selling their minerals directly at our laboratory.

BUYING AT VARIOUS AUCTION SELLING CENTRES.

The ministry of minerals arrange gems tones auction sell quarterly or bio-monthly. Our lab can alternatively acquire raw material through this way.

COSTS OF LABORATORY FURNITURE AND EQUIPMENT.

In-order to accomodate the lapidary, a minor renovation and varnishing of furnitures such as benches tables and cupboards will be required, the work is estimated to costs about usd 2000.

PRE-OPERATIONAL EXPENSES :-

Initially, the project will require to obtain master dealers licences, general offices expenses and transportation / travelling costs for the vehicles as follows :

Master dealers licences & Lapidary USD = 8000

General Office Expences & Consultancy USD = 7280

Transportation / Travelling 3000 km pm X 12 X 0.5 USD = 18000

Salaries USD = 1462

total   38,000.00

LOCATION

The overall economics of any industrial venture depends to a very large extent on the

proper selection of site. The salient location criteria applicable to Lapidary like any other Industry venture are :

_ Accessibility to raw materials sources

_ Infrastructure development for economic and security transportation of basic raw

materials and finished products.

_ Geological conditions

_ Availability of Electricity and utilities

ACCESSIBILITY TO RAW MATERIALS SOURCES

As discussed in previous chapter 2, the raw materials availability according to available information and field investigations reveal that the proposed location of lapidary at MBEYA town centre will be accessible from all sources of raw materials as the infrastructure indicate that road transportation is accessible to this places throughout the year.

LABORATORY SITE :

Its estimated that for the proposed lapidary an room area of obout 15 mtrs should be adequate. MR. K.A. NDINGO has fully pledged to release on a room within his company offices premises located within the vicinity of MBEYA municipality.

WATER AND ELECTRICITY

At present there is piped water and electricity supplied within the proposed building intented to accommodate the laboratory. Normal domestic supplies of water and electricity will adequetly cater for this project.

DEMAND AND SUPPLY

As the project will be undertaken under a joint venture basis, the demand and supply of the project will be full determined by the forces and principles of demand and supply.

Although in most cases our project will deal with orders available locally and externally.

LOCAL DEMAND

We expect that since our laboratory will be the only project available within the central regions and southern highland of TANZANIA, will attract both small scale miners and other customers to come for faceting and polishing for their rough gemstones at our laboratory site, for which we assume to constitute about 30% to 20% of our laboratory work load.

EXPORT MARKET

As the project involve soliciting of foreign joint venture partner on equity of 50/50/, All export market abroad will be coordinated by our joint venture partner who will be us possible for arrangements of all orders and safetly deliveries of materials to the export market,

PRICING

The prices of rough gemstones in TANZANIA are very much influenced by type and origin of the mineral. Minerals from ARUSHA, SHINYANGA and MOROGORO are obviously more expensive rather than of other minerals from the rest regions.

However our demand and supply will depend on the available price offer, offered at our export market through our agent partner abroad who will be responsible for soliciting orders i . i . e . types of stones required, type and size of cut required, price offer quality and quantity required.

PROJECT CAPACITY

The acquisition of various machinery and equipment such as AUTOMATIC RONDIST

FACETING MACHINE and IMAHASHI FAC- 8 MODEL FACETING MACHINE will give a

Laboratory capacity production range of 10000 to 20000 carats per month depending on

Demand and supply..

PROJECT ENGINEERING

The project engineering of any industrial venture is divided into two parts, the machinery

And equipment more or less directly involved in the production process and the structures

And utilities of the project.

PRODUCTION PROCESS AND TECHNOLOGY

The proposed multi gems lapidary laboratory will handle between 110,000 to 220,000

Carats per annum. The technology proposed is fairly straight forward using modern machines similar to those operating in other lapidaries in developed countries as recommended by machinery supplier. For the maintenance a supplier will offer a team of very high standard to our project. Our gem cutter will be offered an opportunity by the team of experts on how to operate the machines.

PROCESS DESCRIPTION

The process description will involve of receiving an order,purchasing,faceting and polishing

LABORATORY MACHINES AND EQUIPMENT

The laboratory production machines and equipment are supplied by RS rubin & son BV

BA, B-2018 ANTWERPEN, BELGIUM. These types are in common use all over the world.

MACHINES AND EQUIPMENT REQUIREMENTS

10 cases for loose stones ( ref 188 ) cost in francs belg 1355.-

10 shipping boxes with foam insret ( ref 983 ) --- : :------ 690.-

Compact sorting boxes ( ref X L 827, / X L 829-5 )...--- 700.-

Economy sorting pads ( ref –460 – 461 ) ---------- 420.-

Stone tweezers ( ref 170 171 / 175 ) -------- 800.-

K & B Diamond and stone gauge ( ref 1120 ) -------- 280.-

Shindler carat Estimator loupe ( ref 8315 ) ------- 3652.-

Optivisor Binocular head band loupe ------- 766.-

( ref XL 830 p – 10 ) ( 3 ½ X 10 cm )

Combination electronic gemstone gauche

And gems weight computer ( ref GWC – EGG ) ------- 26,894.-

Diamond weight estimator ( ref 162 ) ------- 189.-

Dazor circline magnifying lamp ------- 6900.-

Economy carat scale ( ref X X 511—100 cts ) ------- 1900.-

Pocket carat gemscale ( ref DE 100 ) ------- 12,000.-

High sensitivity pocket polarscope ( ref PA 5010 ) ------- 3,519.-

Rayner hardness pencil set ( ref sco 80 – 4 ) ------- 3,893.-

Rubin sonic ultrasonic cleaner ( ref sco 80 – 4 ) ------- 10,750.-

Needles for gold & Testing kit ( ref 389.9 ) set of 9 ------ 1,684.-

Gia gem shortwave / longwave UV lamp ( ref V V 745 )--- 8,890.-

Automatic rondist faceting machines ( ref 5550 ) ----- 105,000.-

IMAHASHI FAC - 8 MODEL FACETING MACHINE ( ref fac 8 )- 105,000.-

MASTER stone Box ( ref 8357 ) ---- 2,950.-

BOOKS :

Diamond grading ABC ( ref BK 25 ) FB -- 1250.-

Clor ency clopedia of gemstone ( ref BK 8 ) -------- 3778.-

Gemstone of the world ( ref BK 61 ) -------- 1300.-

Gem cutting a lapidary mannual ( ref BK 42 ) ------- 3710.-

How to cut a diamond ( ref BK 202 ) ------- 2476.-

Dictionary of gemmology ( ref BK 33 ) ------- 1696.-

Photoatlas of inclussions in gemstones ------- 8800.-

Jewerly insurance appraising ref BK 253 -------- 4950.-

The GIA Diamond dictionary -------- 4636.-

: : : : : : : : : : : : : :

TOTAL FB 330,738.-

1 USD = 29 franc belg TOTAL USD 11,404.75

PROJECT TRANSPORT.

To enable easy follow up of raw materials and delivery of finished product of shipment

One four wheel dr vehicle is proposed at the estimated costs of US Dollars 12,000 =

Depending on the source.

ORGANISATION AND MANAGEMENT.

The overall management will be under the directors i . e . joint venture partner and its

Counterpart. Daily management of the project including its production process and

PROJECT DIRECTORS--(shareholders)-

Director-(Shareholder-Local counterpart)-

Purchasing Division--(1 position)(Employee)-

Division Faceting and Polishing--(1 position)(Employee)-

 REMUNERATION & SALARIES

Project shareholder renumeration will be discussed after the project proposal has been finalised. However,the salaries for a gemmologist and one technician for faceting and polishing will be as follows :

Gemmologist per month 200 USD X 12 X 10 % = 2640.-

Faceting & Polishing Technician 150 USD X 12 X 10 % = 1980.-

Total cost per annum for salaries USD 4620.-

See chapter 2 :5

FINANCIAL ASPECTS AND INVESTMENT .

SUMMARY OF CAPITAL -- INVESTMENT .

The financial analysis of this project is assumed that operations will start at the late

1996.

CAPITAL SUMMARY

A summary of the initial capital is shown below

Machinery and equipments = USD 11,404.05.

Vehicles = USD 12,000.00

Furniture and equipment = USD 2,000.00

Pre-operational expenses = USD 38,000.00

Cost of raw materials / = USD 39,000.00

Working capital

-Total initial working capital = USD 102,404.00

PROFITABILITY

The internal rate of return before tax minimum is 100 % destipe high internal rate of return an indication that the return on the investment will be a very short period of time, may be within one year or few months.

SOURCES AND APPLICATION OF FUNDS

TOTAL PROJECT INVESTMENT.

Total project initial capital investment required at year o is estimated to USD 102,404.-

CONCLUSIONS AND RECOMMENDATION

The multi-gems lapidary laboratory will go long way in meeting the demand and supply

Of facet and polished gemstones locally and external market, where at present the local

Production of cut and polished stones is practically negligible. Thus, with the establishment

Of the proposed project in MBEYA region of TANZANIA, the locally available minerals

Will be usefully utilised.

Faceting and polishing of rough gemstone enhance the quality and price of the

Minerals and thereafter enabling both the investor and the government earn the desired

Income.

The project is timely and go on hand with earning hard forex to the country.

Prepared by Isak Mwakagile and twiga service in 1996 (now regarding this project around 150,000USD)

 2001 update