The US says there is no Bin Laden link

The statement will be greeted with relief by Tanzanian traders and miners, who have been hit hard by a boycott of the gemstone by US jewellers.

The boycott, which is now likely to be lifted, was imposed in November after a Wall Street Journal article alleged that supporters of Osama Bin Laden were involved in Tanzanite smuggling.

Tanzania is the only country in the world where the blue-to-violet gemstone is found.

The Tanzania Miners Association warned last week that the US boycott stood to wipe out the country's Tanzanite industry.

Regulation urged

The State Department announcement was made at a world summit of Tanzanite traders and dealers in Tucson, Arizona.

A Tanzanian delegation led by Minister for Energy and Minerals Edgar Maokola-Majogo attended the summit after holding talks with US jewellers in Washington.

Tanzanite traders issued a statement expressing delight at the State Department statement, but urged the Tanzanian government to take steps to regulate the mining industry.

Suspicion of terrorist links first arose from the massive anomalies between Tanzanite sales abroad and revenue received from the gemstone in Tanzania itself.

The Tanzanian Government last year recorded sales of $16m worth of Tanzanite yet the United States alone recorded sales of over $300m.

The Wall Street Journal report alleged that Muslim extremists had been buying the gemstones in Tanzania and smuggling them to Dubai and Hong Kong, where they were sold to finance al-Qaeda.

But the Executive Director of the American Gem Trading Association said the State Department statement had satisfied him there was no link between the gem and terrorism.

Addressing the Tanzanite summit, Minister Maokola-Majogo said a new board would be created to keep a check on the industry.

He said the new body would be modelled on mining boards in the west comprising government and non-government stakeholders in the industry.

Its mandate would include supervision of the mining, trade and exportation of Tanzanite, he said.