Diamond cutting firms close shop

DESPITE government issuing 17 operators with diamond cutting and polishing licences, the sector has failed to take off, resulting in all the companies closing shop, the Zimbabwe Independent has learnt.

By Elias Mambo/Obey Manayiti

This is despite government announcing that it is pursuing value addition and beneficiation as key pillars of its economic revival and empowerment policy.

This story is part of our ongoing ground-breaking investigation into the Marange alluvial diamonds discovery and subsequent plunder at various stages by state and non-state actors. The special series is supported by the Investigative Journalism Fund.

Investigations have revealed that all the diamond cutting and polishing companies are not operational because government has opted to use foreign diamond processors. The sector has also failed to take root due to lack of supply of diamonds, unlimited exports of uncut stones, poor policy choices, interference by the state, undue security interventions and lack of a viable value addition and beneficiation strategy.

“We were given the licence in 2008 and we operated for two years up to 2010,” said one diamond cutting and polishing company owner. The licences by then cost US$20 000 for 12 months, but with the current laws in place new companies are being given 10-year licences.

“We imported machinery which is valued at over US$1,5 million, but we have failed to reach break-even point because of lack of business.”

The company owner also said before they were issued with the licence they were told to train at least 10 local people as a pre-condition.

“We trained people here who were brought by government as a condition to get a licence. Surprisingly, not even one of them joined government after training,” the source said.

“We were then issued the licence, but we have never realised anything from the industry,” the businessman said, adding: “During the two years we operated there was also too much interference by government which treated everyone with suspicion.”

Diamond polishers get their raw materials (rough diamonds) from the producers and then process them, including grading into various classes and caratage.

The source also said the lack of a mines and minerals policy in Zimbabwe has also contributed to the death of the diamond cutting and polishing industry in the country.

“The absence of a comprehensive mineral policy has opened avenues for the Zimbabwe Mining Development Commission (ZMDC) to make local players compete with international diamond polishers.”

“The ZMDC officials made sure that preference is given to international polishing companies so they took uncut and unpolished diamonds to the auctions,” the source said.

Notwithstanding lack of a proper mineral policy, the diamond cutters and polishers said the other problem was the sporadic local auctions locally which meant that they could spend several months without being supplied with raw materails.

Last year, Aurex Diamonds, a subsidiary of the Reserve Bank of Zimbabwe, said it had capacity to cut and polish diamonds on a large-scale for the export market following the acquisition of new equipment from India — completely shutting out other local players.

Aurex has since entered into a toll arrangement with the Zimbabwe Consolidated Diamond Company where it is processing its diamonds before export.

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