Zimbabwe Government Slashes Cutters’ Fees, Plans Diamond Exchange

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By the Source on February 19, 2014. No Comments

GOVERNMENT plans to set up a diamond exchange by July and will also hold auctions in Dubai and Shanghai this year to maximise earnings from its metals, the mines minister said on Tuesday.

Zimbabwe is seen accounting for over a quarter of the world’s diamond output in the next decade and has held two auctions at the Antwerp World Diamond Centre, the second of which is currently in progress.

But Minister of Mines and Mining Development, Walter Chidakwa said the government wanted to sell at other centres to derive maximum value.

“The intention is (to sell at) Antwerp, Dubai Diamond Exchange and Shanghai Diamond Exchange,” Chidakwa told a press conference.

“We sought to look for a way that in the interim will give us a semblance of fairness so that perhaps we could increase our earnings as a country. So moving away, gradually we still do some tenders but I’m not happy with it.”

At least 84 percent of all rough diamonds and 50 percent of all polished diamonds pass through Antwerp.

“I was talking to the secretary (of Mines Francis Gudyanga) saying why should we go to other exchanges?

“Surely the same buyers who are going to Dubai can be invited to come to a makeshift Zimbabwe diamonds exchange. Let’s use the expertise out there so that we also have a diamond exchange in Zimbabwe,” he said.

Chidakwa also slashed registration fees for local diamond cutters by 80 percent to $20,000 amid plans to set up an exchange for the precious stones by July this year. The tenure of the licence had been extended to 10 years to reduce corruption and promote value addition.

The proposed exchange would replace the current tender system which he said was fraught with irregularities.

Chidakwa said he had met with representatives from diamond cutting and polishing companies to discuss plans to grow the sector.

“We agreed with them that we would reduce the licence fee from $100,000 to $20,000 because investors do not take a position over one year. You don’t bring equipment to Zimbabwe and say, I will make money over one year,” said the minister.

Zimbabwe is expected to produce 16.9 million carats this year, up from 11 million carats last year.

Meanwhile, Chidakwa said government will soon carry out due diligence at the two companies shortlisted to set up the country’s first ever platinum refinery.

Harare wants foreign-owned platinum miners to build a refinery in the country by 2016 to add value to local minerals, by which time the three platinum producers – including Zimplats and Unki – hope to have passed the  500,000oz per annum output threshold.