Govt slashes diamond cutting, polishing fees

HARARE - Zimbabwe has reduced licence fees for local diamond polishing and cutting firms from $100 000 to $20 000 annually.

The licence is valid for 10 years.

Walter Chidhakwa, the Mines minister, told a news conference yesterday that the move was aimed at promoting the local beneficiation industry as well as creating jobs in the country.

“We are not in the business of selling licences but we are in the business of creating jobs,” he said.

Chidhakwa said the latest development will aid over 20 companies operating in Harare to employ at least 100 people in beneficiating the gems.

“I recently met with diamond polishing firms and had fruitful deliberations with them.

“Most of these companies have already established facilities but were forced to close shop due to the prohibitive $100 000 licence fees,” he said.

This comes after licensed gem-polishing and cutting firms had dwindled from 29 to one this year due to exorbitant licence fees.

Richard Mvududu, Diamonds Beneficiation Association of Zimbabwe (DBAZ) chairperson, recently told the Daily News the diamond cutting and polishing industry in Zimbabwe was still in its infancy and was facing a still birth.

“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.

He said while the development was incoherent with government’s beneficiation policy, the fees are way too high as compared to South Africa and Botswana.

“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 decreed that at least 10 percent of Zimbabwe’s rough diamond output — approximately 8,5 million carats per year — should be processed, but the country only managed to cut and polish a mere 0,1 percent.

Mvududu said “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.”

“DBAZ has engaged government to review the licence fees to match South Africa and Botswana,” Mvududu said, adding that government had backed down to $50 000 per annum, but it “mistakenly” gazetted a $100 000 licence fee.

In Botswana the licence fee is pegged at $100 a year for up to 10 years while in South Africa the fees do not go beyond $500 a year for up to five years.

Industry experts say the fees in Zimbabwe were too high and contributed to the high cost of production per carat.

Comments (3)

It took government officials a long time to make up their minds. Many were afraid of the onus to make a decision, and this was to the detriment of the diamond industry. Talk of irresponsible government officials.

vortex - 19 February 2014

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