15 February 2018

Zimbabwe: Time to Beneficiate Our Diamonds


Zimbabwe's potential to become one of the world's top suppliers of diamonds has never been in doubt since the Marange diamond rush in 2005.

What has, however, been in doubt is its capacity and capability to extract full value out of the resource. Just like any novice in the business, Zimbabwe lacked both skills and the technology to do the business -- processing and sorting.

Its capacity to manage and account for the diamonds has also been questioned given the little that has filtered through to treasury.

As a result, Zimbabwe, which was at one time reported to have the potential to supply 25 percent of the world's diamonds, suffered major drawbacks that also disrupted production, resulting in the country missing out on revenue from this lucrative sector.

But reports this week that Zimbabwe is on the brink of hammering a deal with Botswana to start processing its diamonds at the world renowned Diamond Trading Company (DTC), provides intriguing reading.

President Mnangagwa toured DTC that has state-of-the-art diamond processing and sorting technology this week and talks are that if everything goes well, Zimbabwean gems will be processed and sorted at the Botswana firm starting mid this year.

By standards, DTC is regarded as the world's most sophisticated diamond sorting and value adding hub that also process, clean and polish the gems from South African firms and Canada among other nations.

This should be the beginning of the much awaited value addition and beneficiation of minerals before exports for the country to earn more from its natural resources. Information on the ground say the country has 800 mines exploiting over 60 minerals including diamonds and has capacity to earn $18 billion per annum.

Hopes are that when value added, the country can receive more from its natural resources. The coming in of the DTC deal in the next five months, we believe is the beginning of long and desired journey that will see the country earning maximum benefits from its resources.

As the country marvels at these new developments, leadership should not lose sight of the fact that Zimbabwe needs to establish her own state-of-the-art diamonds cleaning and polishing facilities in the long run.

The short stint the country will be using the Botswana facilities should be taken as the opportunity to learn and amass invaluable skills that should be transferred eventually to locals and be used to beneficiate the minerals.

The technology in use at DTC is expensive and was acquired over a long period. It is against this backdrop that Zimbabwe should use these cordial relations with experts in Botswana given the quantum of diamonds expected to be produced locally to set the stage to eventually establish such facilities in the country.

The new deal with Botswana comes after years of controversy in the way the diamonds deals were conducted in Zimbabwe and for the new administration not to have challenges of mistrust by some stakeholders in the economy, there is a need for the movement to the gems from and to Botswana and at times to the world market to be kept as transparent as possible.

The country expects this time the deals to be handled by men and women of unquestionable integrity and those who become unfaithful with this national resource, the law should take its course.

The national wounds are still fresh and it will be fundamentally flawed to allow squabbling again in the handling of the precious stones during the implementation of the Botswana deal.

Processing stones in Zimbabwe in the future, offers a number of pluses. First, all the revenue and the profits from mining to supply of cut stones will be made in Zimbabwe.

This boosts the value of the exports, allows the Minister of Finance and Economic Development to collect more revenue and have a far better idea of just how much is being mined and processed in the first place, and creates more jobs.

The Government is committed to creating mutually beneficial policies and conditions for the mining sector, especially diamonds to grow.


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