Clik here to view.
Cynthia Nare applies diamond powder on a diamond polishing machine at Zimbabwe Education College in Mount Hampden, Harare. Government will in the next two weeks come up with legislation to regulate the import and movement of diamonds required by cutting and polishing companies for beneficiation
Golden Sibanda Senior Business Reporter
Government will in the next two weeks come up with legislation to regulate the import and movement of diamonds required by cutting and polishing companies for beneficiation as part of efforts to develop the diamond industry.
The legislation is also designed to enable cutting and polishing of diamonds. This will reduce the export of rough gems and in the process create 1 700 new jobs. Mines and Mining Development Minister Walter Chidhakwa said at the close of a two day mining beneficiation conference in Victoria Falls on Friday that his ministry is working on a statutory instrument to regulate movement of diamonds. Minister Chidhakwa said the statutory instrument will regulate movement of diamonds from production to companies that cut and polish diamonds enabling them to import the gems to augment stock from local suppliers.
A total of 27 diamond cutting and polishing companies have so far been licensed to conduct the business, but the companies have not been able to start operations due to regulatory complications that could constrain their viability.
“The statutory instrument will regulate movement of diamonds from production to cutting and polishing companies if they want to import,” he said. We are working on a statutory instrument which will regulate these (diamond) activities,” Minister Chidhakwa added.
The constraints include the requirement that the companies pay 15 percent value added tax and incur a 50 percent discount if they cannot cut and polish diamonds and want to sell them to the Minerals Marketing Corporation of Zimbabwe. Already, Government has slashed licence fees for cutting and polishing firms, which initially had to pay US$1 000 for a year’s licence fees to US$10 000 for 10 years. This comes as Government is trying to ensure beneficiation and value addition in the mining sector to optimize returns from the country’s diverse stock of mineral. Zimbabwe mines diamonds in Chiadzwa, in the Eastern Highlands and Murowa, in the Midlands province. It is believed that Zimbabwe has potential to supply 25 percent of the rough stones sold on global markets annually.
Minister Chidhakwa said Zimbabwe needs to identify the cutting and polishing category it belongs to and develop it in order to optimize returns from export of diamonds, whose entire stock is currently being exported in raw form.
Zimbabwe has been selling its diamonds on the Antwerp diamond exchange in Belgium and is planning more trial tenders on the Dubai and Shanghai markets. The country is seeking markets that generate the highest returns and is building experience on how to market gems prior to establishing its on local bourse this year. Zimbabwe racked in just over US$70 million from a recent second diamond trial tender in Antwerp last month after a 29 percent improvement in prices due in part to a cleaner parcel of the gems from Chiadzwa diamond fields.
A total of 959 931 carats were put on sale by six Chiadzwa diamond mining companies namely Jinan Mining, Marange Resources, DMC, DTZ, Mbada and Anjin. Vice President Mujuru last week said mining accounts for 15 percent of gross domestic product, generates about US$1,7 billion in exports but income to Government coming at a disappointing US$200 million for. The Vice President said returns from mining were disappointing for a country rich in resources.
