ZIMBABWEAN diamonds have been targeted by Western countries due to increasing demand of the precious gems in the United States and Europe, paired with continued growing appetite for these precious stones in China and India, a situation that has caused a major gap in global supply and demand.
According to a recent report by an international diamond expert, Paul Zimnisky, Zimbabwe’s Marange diamond fields are projected to produce 16,9 million carats this year, which would make the project the largest in the world in terms of carats produced annually and those totals could be as high as 30 to 40 million carats annually if current restrictions did not exist.
In light of this, Belgium which was being overtaken as a leading diamond trading hub in the world by emerging diamond processors in China and India, advocated the removal of illegal sanctions that were slapped on Zimbabwe by its master the European Union.
That is the main conclusion of a recently published report by Bain & Company and the Brussels-based leading world diamond trading hub Antwerp World Diamond Centre (AWDC).
AWDC warns of major consequences of this sharp price increase by 2018 for industry players.
While the United States, Britain, Australia, Canada and other Western countries have refused to endorse the July 31 harmonised elections, the EU went ahead to scrap the embargo on Zimbabwe Mining Development Corporation.
However, the EU maintained other illegal sanctions, a move that can be viewed as a hidden agenda to allow exploitation of the country’s precious minerals by members of the bloc.
Last week, the top leadership of AWDC was in Harare for a trip that was described as a way of mapping out modalities for the trade of gems from Chiadzwa on the international scene.
Zimbabwe is poised to become the largest diamond producer in the world, but has been failing to get maximum value of the precious minerals.
Zimbabwe Diamond Education College (ZDEC) principal Steven Muchenje told The Patriot that there was need to adopt value addition policy on the local gems to raise value and prevent the country from receiving raw deals from diamond processors.
“We are losing money by selling rough diamonds, we should add value to our precious mineral to recover 80 percent of value of our diamonds that is being lost to foreign processing companies,” Muchenje said.
“By selling diamonds in their rough state we are only recovering 20 percent and the rest is going to those countries that we are selling our diamonds.”
In the Global Diamond Industry Report 2013, the authors forecast that rough diamond production will grow at an average annual rate of 4,8 percent from now until 2018, reaching a peak level of 169 million carats and a production value of US$19,6 billion.
AWDC is the largest diamond trading hub which enjoys a huge stake of diamonds value world over.
But it does not own a single diamond mine and only depends on gems from other countries that are getting only 20 percent value of their precious minerals.
Therefore, the visit of this high level delegation should be scrutinised with the most intelligent minds in our government as it came at a time when imaging diamond firms from the east were boosting production on the back of European firms that were limping due to limited access on the precious gems.
Muchenje said Zimbabwe should not be fooled by foreign processing firms who want to maximise profits through disadvantaging diamond producing countries on the pretext of partnerships in processing the precious gems.
He said the country should not doubt its ability and potential to process diamonds as it has the necessary expertise that could fuel the value addition policy.
“If leading diamond trading hubs can excel in the operations only by processing diamonds from other countries when they do not own a single mine, then what should stop Zimbabwe from growing its diamond industry when it is a producer of these most wanted gems,” he said.
Muchenje added that his college has been producing finished diamond products such as jewellery which has attracted many buyers on the international market.
“Our institution is in touch with outside diamond centres and at the moment we have confirmed orders of more than US$100 million from buyers who want our finished products,” he said.
“We have sent samples and buyers are happy with our products.
“We have got the products, the skills; the market and we are only left with realigning ourselves to make money.”
AWDC has been boasting of having more than 1 800 cutters who work in their factories. It would not be surprising that some of these cutters are from Zimbabwe who fled the country in search of employment.
Value addition would come as relief to the economic hardships being faced in the country as value addition could bring in more money in the country.
“Processing diamonds locally can help the country to gain the value difference that is being lost to foreign processing firms and bring in more money to the country, a situation that can help us to reduce liquidity challenges in our economy and boost other sectors such as agriculture,” said Muchenje.
“Money realised from diamonds can also be used to boost other sectors of the economy such as agriculture and the manufacturing sector a move that can reduce high unemployment rate in the country.”
Most diamond producers in Africa were being discouraged by international diamond trading hubs, to process their diamonds.
Meanwhile, ZDEC has intensified the completion of the Zimbabwe Diamond Technology Centre, in a bid to complement government efforts in enforcing value addition policy.
“We have now resumed construction of the diamond centre so that we could be able to house all involved diamond stakeholders under one roof,” Muchenje said.
Zimbabwe Diamond Technology Centre, will house between 300 and 500 diamond processing factories that would have shops to sell finished products.
Each diamond factory would have the capacity to accommodate at least 200 cutters.
So far the ZDEC has produced more than 750 graduands with diplomas and certificates in different courses that include cutting and polishing.
Muchenje said they were planning to increase the number of students in the next intakes.
The joint-venture mines in the Marange Diamond Fields last year produced a combined eight million carats of the gems and generated US$684, 5 million in exports.