Kurotwi lashes out over diamonds

HARARE - A local diamond processing player, Lovemore Kurotwi, has lashed out at government’s decision to engage foreign firms ahead of local companies in setting up a joint cutting and polishing plant.

Kurotwi, who runs a diamond cutting and polishing training centre, said the decision by government to court Chinese firms to set up the polishing firms in the country contradicts its indigenisation drive and undermines the productivity of smaller firms within the industry.

“Is it that the local industry has failed to do the work or government through the ministry of Mines is up to something no good? The local industry should be given a chance to add value to our minerals before foreigners are invited,” Kurotwi said.

Government through its quasi-parastatal, Mineral Marketing Corporation of Zimbabwe (MMCZ), has indicated that it is in talks with Chinese firms to set up cutting and polishing companies in the country and it is also proposing to export rough gems to the Asian country at a cheap price.

MMCZ says the move is being undertaken as a strategy to overcome effects of sanctions imposed on the country’s diamonds by dominating industry players from the West.

But Kurotwi said exporting unprocessed stones is unbeneficial to the country and creates employment to foreign countries while the country’s employment rate remains high.

“When a foreign firm comes here, dividends accrued from the processing plant will go to the parent company of that firm and as Zimbabwe we get nothing expect for taxes. We have local firms that have the    capacity to undertake the project but they are being hampered by licence fees demanded by mines ministry,” Kurotwi said.

Kurotwi said this as the Diamond Beneficiation Association of Zimbabwe (DBAZ) has also raised concerns over licence fees demanded by government from prospective gem-polishing and cutting firms.

According to DBAZ, the increase in licence fees resulted in the reduction of companies wishing to cut and polish the country’s stones.

Richard Mvududu, DBAZ chairperson recently told Daily News that licence fees have increased five-fold to $100 000 from $20 000 per annum in 2007.

“The diamond cutting and polishing industry in Zimbabwe is still in its infancy, and in fact it is facing a still birth,” he said.

“In 2011, there were at least 29 companies licensed to cut and polish diamonds. In 2012, licence fees were increased. This increase saw a sharp drop in licensed operators,” Mvududu said.

“This is particularly striking given that Zimbabwe could be holding 25 percent of the world’s production by volume,” said Mvududu.

This comes as government imposed that at least 10 percent of Zimbabwe’s rough diamond output — approximately 8,5 million.

He said “that the state of affairs is not acceptable, especially the fact that we are producers, we should be in a position to take advantage of as much beneficiation of our diamonds as opposed to exporting them in raw form.”

The DBAZ boss said beneficiation is a process which included cleaning, sorting, cutting and polishing, grading and dealing or marketing.

“There is a +/- 10 percent increase in the diamond’s price at every stage,” he said. - Xolisani Ncube

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