'Foreign investors won't take part in diamond beneficiation'

HARARE - Foreign investors will not partner Zimbabwe in its diamond beneficiation initiative as the move will negatively affect their home markets, a local expert said.

Stephen Muchenje, Zimbabwe Diamond Education College principal, said Zimbabwe had to change its policy and strategy in the diamond sector.

“We will be misleading ourselves as a nation if we think countries like India and Dubai are going to have our interests at heart,” Muchenje said.

“Our diamonds created 60 000 jobs in India alone, thinking that India will deliberately abandon its industry to revive ours is very ridiculous,” he said.

Muchenje said his college, the country’s sole diamond processing training institution, was in the process of engaging government in a value addition scheme.

“We need to set up an industry as a country that will operate to maximum capacity because as it is, we are not reaping the full benefits of our diamonds as nationals,” Muchenje said.

He said selling diamonds in their rough state was short-changing the country.

However, Muchenje expressed confidence over national capacity to set up an industry and operate at maximum capacity to benefit locals, despite experts citing nonexistent financial capacity to set up the industry.

According to Muchenje, setting up industry will lead to a value addition influx, whose ripple effects will revive the struggling economy.

Experts say cutting and polishing add around 50 percent to the value of rough stones.

The global value chain of the diamond industry includes exploration, mining, sorting, polishing, dealing, jewellery manufacturing, and ultimately retail.

Zimbabwe is able to conduct the first three stages, but must focus on mastering the other four.

India is one of the major diamond markets in the world and is also a significant buyer of Zimbabwe’s gems.

Market watchers have warned that unless the country puts in place a comprehensive value addition strategy, its minerals will continue to benefit other nations.

ZIM DIAMOND SECTOR KEY HIGHLIGHTS


- Experts’ reports say the country’s diamond production could double the current global output and easily contribute by 2015, 25 percent of the world’s supply and 30 percent by volume.

- The country managed to cut and polish 0, 1 percent out of a targeted ten percent of the total diamonds produced last year.

- Zimbabwe produced 8, 5 million carats in 2011, according to statistics from the Kimberly Process.

- Government introduced a quota system, which stipulates that ten percent of all locally produced diamonds are to be cut and polished locally.

- Out of the seven stage diamonds beneficiation process, Zimbabwe is only able to conduct the first three.

- Zimbabwe is one of the top 5 producers of rough diamonds by volume in the world.

- Diamonds were discovered in the country in 1903 with over 150 kimberlites known to exist.

- Zimbabwe’s diamonds are selling at more than 25 percent discount due to restrictive measures.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.