Aug. 3 (Bloomberg) -- The world's biggest piece of tanzanite, a blue-violet gem rarer than diamond, was unearthed near Tanzania's Mount Kilimanjaro. Shares in TanzaniteOne Ltd., which found the rock, rose the most in almost 10 months.

The stone weighs a record 16,839 carats and is the size of a brick, company spokeswoman Renata Da Silva said by phone today from Johannesburg. TanzaniteOne hasn't valued the rock yet and doesn't know how many polished carats will be made from it.

``It's a pretty amazing find; this thing is huge,'' said Kevin Tomlinson, director of natural resources at ING Groep NV's Williams de Broe stockbrokers in London. ``There are collectors out there that will pay a big premium for this sort of stone.'' He declined to guess its value.

Tanzanite was discovered by a Masai tribesman near Kilimanjaro in 1967, according to TanzaniteOne's Web site. The rock was named and first sold by New York jeweler Tiffany & Co. the following year. It's only found in the Merelani hills, in a 5 kilometer (3 mile) strip of land in the north of Tanzania.

Shares in Hamilton, Bermuda-based TanzaniteOne rose as much as 11 pence, or 13 percent, to 95.5 pence as of 1:09 p.m. in London. It was their biggest gain since October and values the company at 66.8 million pounds ($119 million).

``There are lots of esoteric stones or esoteric minerals that have single sources but none of them are mainstream,'' Chief Executive Mike Nunn said in a phone interview from Johannesburg. ``We estimate that the industry as a whole is getting close to $500 million and certainly within a couple of years we would expect that the tanzanite industry will be a $1 billion.''

Polished Stone

The market value of polished tanzanite varies between $200 and $2,000 per carat depending on size and quality, Da Silva said. Prices of VS2 G diamonds, a commonly traded gem, are at $5,840 a carat for a one-carat stone, said Richard Platt, a statistician at Antwerp-based PolishedPrices.com. Tanzanite is about one third of the price of sapphire, according to TanzaniteOne.

On carat is equal to a fifth of a gram.

``This really is a sizeable stone, comparable to what the Cullinan Diamond is to the diamond industry,'' TanzaniteOne Deputy Chairman Ami Mpungwe said in a Regulatory News Service statement today. The 3,106-carat Cullinan Diamond was found in South Africa in 1905 and parts of it are now incorporated into Britain's royal crown and scepter.

The 3 kilogram (6.6 pound) tanzanite stone was found 270 meters underground in the Bravo shaft, the southernmost shaft of TanzaniteOne's license area, the company said. Before today's announcement, the largest stone found weighed 3.2 kilograms, but it broke up as it was being removed from the ground.

Mountain Peaks

The latest find, named ``The Mawenzi,'' after the second highest of Kilimanjaro's three peaks, will be put on display before being cut up, the company said.

``We were reluctant to name it Uhuru, after Kilimanjaro's highest peak, on the off-chance that a larger piece is ever found,'' TanzaniteOne's President Ian Harebottle said in a statement.

The company's Merelani mine is the largest tanzanite mine in the world. The company is carrying out exploration to extend the mine's life, which it estimates at about two decades, Nunn said.

The new discovery ``won't affect the price,'' he said. ``We are producing ourselves close to a million carats a year.''

Tanzanite prices may rise more than diamonds in coming years, according to Tomlinson. Prices for rough, or uncut, diamonds are expected to increase 30 percent in the next five years, he said. Tanzanite jumped 25 percent last year.

To contact the reporter on this story: Mark Cobley in London at mcobley@bloomberg.net

Last Updated: August 3, 2005 08:56 EDT