FINANCE minister Patrick Chinamasa says the only foreign investors required to comply with the 51% indigenisation law stipulation are diamond and platinum miners.
Presenting the 2018 budget statement in parliment yesterday, Chinamasa said only diamond and platinum mining investors will have to adhere to the controversial indigenisation laws.
“Diamonds and platinum are the only sub-sectors designated as ‘extractive’,” he said.
“Accordingly, the proposed Amendments will confine the 51/49 Indigenisation threshold to only the two minerals, namely diamonds and platinum, in the extractive sector.”
President Emmerson Mnangagwa in his inauguration speech said the government will employ various reforms to turn around the economy.
Mnangagwa wants to refine the indigenisation policy — widely seen as a barrier to much-needed foreign direct investment — as the current version lacks clarity and consistency, among other shortcomings.
Mnangagwa, an admirer of Chinese reformist leader Deng Xiaoping, wants to initiate economic reforms which will, among other objectives, address issues of investment, production, the ease of doing business and the controversial indigenisation policy.
In his budget presentation, Chinamasa also said US$40 million was given to the Zimbabwe Consolidated Diamond Company for capitalisation.
Chinamasa also said Zimbabwe has only 10 diamond-cutting and polishing centres.
“To date, the country has licenced 10 diamond cutting and polishing centres to value add the locally produced diamonds”, he said.
“Currently, most of these registered companies are in the stage of building capacity in diamonds processing.
“The capacity building programme includes acquisition of state-of-the-art equipment, which enhances efficiency by reducing weight loss, waste and production costs.
“In terms of skills development, the School of Diamond Cutting and Polishing, which was opened in 2011 at Mount Hampden, has so far trained over 1 000 artisans in diamond sorting, valuation, cutting and polishing.”
Chinamasa also said the school has also automated the diamond cutting and polishing process, thereby improving the skills on enhancing the diamond beneficiation process.
“However, while this capacity building process is ongoing, Aurex, a subsidiary of Reserve Bank, has already started beneficiating the country’s diamonds and now moved into manufacturing jewellery,” he said.
Chinamasa added “at the end of September, diamond output stood at 1.8 million carats, up from 1.3 million recorded during the whole of 2016.”
The company expects to produce 2,5 million carats this year after acquiring equipment worth US$32 million which has been expected to push production figures upwards.
This news article is part of an 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.