ZIMBABWE has the potential of earning US$8 billion annually if it cuts and polishes its rough diamonds, a local natural resources watchdog has advised.
BY NDAMU SANDU
In a report, Zimbabwe Rough Diamond Exports: Is Government Selling Out?, the Centre for Natural Resource Governance (CNRG) said government continues to export thousands of jobs annually through the export of rough diamonds, frustrating the fledgling local cutting and polishing industry.
“Centre for Natural Resources Governance believes Zimbabwe can create over 210 000 jobs and generate over US$8 billion in revenues annually if a significant percentage of its rough diamonds were cut and polished locally,” it said.
The report comes at a time Marange diamonds are on tender at the Antwerp World Diamond Centre amid expectations that the gems would fetch a higher price compared to the initial tender in December.
Diamonds from Diamond Mining Company, Jinan Investments, Anjin Investments, Marange Resources, Mbada Diamonds and the Development Trust of Zimbabwe went on sale on Wednesday up to February 21, including on weekends at the Antwerp Diamond Tender Facility.
In the trial tender in December, a total of 279 723 carats from Marange Resources, Diamond Mining Company, Anjin Investments, Jinan and Kusena Diamonds were sold for US$10,7 million. This means that the diamonds were sold at an average price of US$35,7 per carat.
CNRG said one of the reasons why diamonds were sold cheaply at the first auction was that they had not been cleaned and questioned why, after five years in the diamond business, the country has not made strides to ensure value addition.
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“The Centre for Natural Resource Governance calls on the Minister of Mines and Minerals Development to declare a quota of 25% of rough diamonds to be cut and polished locally,” it said.
“We also call for the reduction of licence fees for prospective Zimbabwean diamantaires and for technical and financial assistance to be rendered to them.”
“This will no doubt increase revenues generated from the diamond industry and create approximately over 50 000 jobs for Zimbabweans.” A diamantaires is an individual with expertise in increasing the value and quality of rough diamonds.
CNRG recommended government to persuade foreign companies intent on buying Zimbabwe’s rough diamonds to establish cutting and polishing factories in Zimbabwe, including Mutare.
It said government should seek expert advice from countries such as Botswana, India, Israel, Belgium and the US, among others, on best practices in cutting and polishing.
The sale of Marange diamonds in Antwerp followed the removal of European Union sanctions on the Zimbabwe Mining Development Corporation and a culmination of high-level meetings of Zimbabwean and Antwerp World Diamond Centre (AWDC) officials both in Harare and Antwerp.
Marange diamonds have courted controversy as little or nothing was remitted to Treasury despite the producers selling the diamonds. In the 11 months to November, no money was remitted to Treasury as dividends against a target of US$61 million.
In his 2014 national budget, Finance and Economic Development minister Patrick Chinamasa said President Robert Mugabe had directed Treasury and the Ministry of Mines and Mining Development to institute a raft of reforms that would ensure greater transparency in the diamond industry.
The measures include ensuring surveillance of the entire production, sorting and transmission of diamonds.
There will be tripartite control by the ministry of Finance (through the Zimbabwe Revenue Authority), Ministry of Mines and the mining company over the vault where raw diamonds are deposited.
The Minerals Marketing Corporation of Zimbabwe will be directed to make deduction of revenues due to the fiscus and pay the same directly into the fiscus.
