Govt considers scrapping diamond royalties

HARARE - Mines minister Walter Chidhakwa says government is considering lowering or eliminating royalties on diamonds earmarked for the local market.

This comes as government plans to resume local diamond auctions this month.

“We are looking at the possibility of reducing or eliminating royalties for those diamonds that are destined for local diamond cutting and polishing including the removal of 15 percent value added tax as part of efforts to improve the environment,” he told delegates at the second diamond conference in Harare yesterday.

Chidhakwa also noted that government recently gazetted a statutory instrument that rationalises the diamond cutting and polishing licensing system in a way that both the government and private companies benefit from the revenue of the business.

“Issues of licensing, tenure and access to rough diamonds have clearly been dealt with in this process. 10 percent of production is reserved for local cutters and polishers. Given the footprint of Marange diamonds, about 10-15 percent of the diamond are gems or near gems.

“This translates into about 1,5 million to two million carats of gems or near gems to local cutters and polishers presenting huge opportunities for investment into the sector,” he said.

Early this year, the southern African country made an unprecedented move to promote the local industry by  reducing licence fees for local diamond polishing and cutting firms from $100 000 to $20 000 annually.

The licence is valid for 10 years.

The minister noted that Zimbabwe has been producing minerals to drive industries of other nations at the expense of the country’s own industrialisation.

“Today, we seek to develop robust mining activities which become the backbone of our own growth and development,” he said.

Zimbabwe is also finalising discussion with companies for full integration from mining through cutting and polishing to jewellery manufacturing, product branding and international marketing and distribution.

The second diamond conference, running under the theme ‘Completing Zimbabwe’s diamond potential for the future” is expected to attract nearly 750 delegates — making it the largest diamond industry conference ever held in the southern African country.

Eli Izhakoff, the World Diamond Council (WDC) honorary president said

Zimbabwe and Africa’s time had come, adding that the degree to which the continent would be successful depended on how well and effi  ciently it manages its natural resources, including diamonds.

“I am delighted to be part of that process and am greatly confident of what can be achieved,” he said. The conference is also expected to provide a platform for sharing information and discussing Zimbabwe’s promising diamond sector.

Zimbabwe is estimated to hold one of the world’s largest diamond reserves.

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