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Manuel de Souza, a Goan tailor and part-time gold prospector living in Arusha (Tanzania), found transparent fragments of vivid blue and blue-purple gem crystals on a ridge near Mererani, some 40 km southeast of Arusha. He decided that the mineral was olivine (peridot) but quickly realized that it was not, so he took to calling it "dumortierite", a blue non-gem mineral. Shortly thereafter, D'Souza showed the stones to John Saul, a Nairobi-based consulting geologist and gemstone wholesaler who was then mining aquamarine in the region around Mount Kenya. Saul, with a Ph.D. from M.I.T., who later discovered the famous ruby deposits in the Tsavo area of Kenya, eliminated dumortierite and cordierite as possibilities, and sent samples to his father, Hyman Saul, vice president at Saks Fifth Avenue in New York. Hyman Saul brought the samples across the street to the Gemological Institute of America who correctly identified the new gem as a variety of the mineral zoisite. Correct identification was also made by mineralogists at Harvard University, the British Museum, and Heidelberg University, but the very first person to get the identification right was Ian McCloud, a Tanzanian government geologist based in Dodoma.

Officially called "blue zoisite" it was marketed as tanzanite by Tiffany & Co., who wanted to capitalize on the rarity of the gem, then only found in Tanzania, but who thought that "blue zoisite" (which might be pronounced like "blue suicide") wouldn't sell well. From 1967 to 1972, an estimated two million carats of tanzanite were mined in Tanzania before the mines were nationalized by the Tanzanian government.