The diamond policy approved by Cabinet last week is more than a mining issue as it will be used as a foreign policy tool for Zimbabwe's re-engagement process, President Mnangagwa has said.
He said the diamond policy should protect the country's national interest as well as fulfil the expectations of the Kimberly Process Certification Scheme (KPCS).
The KPCS clears and certifies the source and authenticity of diamonds as part of global measures to keep conflict diamonds off the market. In the past, countries hostile to Zimbabwe have tried to classify Zimbabwe's mineral as "blood diamonds", leading to their undervaluation through use of less competitive sales channels.
The Head of State and Government elaborated on the latest diamond policy in his weekly column published by The Sunday Mail yesterday.
"Given our past, the diamond policy was always going to be more than a mining affair. It has become a foreign policy issue, both for better and for worse," President Mnangagwa writes in his column.
"On the positive side, it means this policy is a potent tool for our engagement and re-engagement efforts. We make no qualms about this. Our abundant natural resources must lend depth and opportunity to our diplomacy and foreign policy goals," he said.
He said the shareholding structure envisaged in the policy was designed to secure the country's national interest.
"This new policy protects the national interest, while meeting the expectations of the Kimberley Process Certification Scheme. The equity structure which the policy prescribes firmly secures our national interest," he said.
"So, too, does its interest in and coverage of all stages of the diamond value chain, which are exploration, mining, processing, sorting and valuation, beneficiation and value addition, marketing, capacity building, security and compliance. Indicative global revenues by value chain segment reveal the link between this new diamond policy and our goal of protecting the national interest."
He noted that global rough diamond sales rake in anything between US$15 billion and US$18 billion annually.
"This is the global revenue value at the first stage of the diamond value chain. Polished diamonds, which feature at the second stage of the diamond value chain, and involving diamond cutting and polishing, globally fetch anything between US$20 billion and US$24 billion," he said.
"The global diamond jewellery retail market, which stands at the apex of the diamond value chain, calls forth revenues of between US$70 billion and US$72 billion. This is a huge, five-fold jump from the initial US$15 billion."
He said it was therefore critical that Zimbabwe moved as close as possible to where the real value of the diamond mineral was situated, which is value addition through beneficiation.
"Clearly the greatest value does not reside with the miner at Chiadzwa. Rather, it resides with the diamond trader somewhere in Antwerp, Surat, Tel Aviv or New York who dresses the customer's finger! This means Zimbabwe must move and stay as close as possible to where real value is," he said.
"This is the import of our diamond policy, which incorporates a valuation centre, a school of gem training, and a whole special economic zone for jewellery manufacturing and retailing. The diamond mining sub-sector will go beyond the three million carats we managed this year. There are vast deposits covering most of our provinces which await exploitation," the President said.
President Mnangagwa said he was set to officially launch the Anglo-Platinum smelter at Unki soon.
"Secondly, last week Anglo-Platinum announced the completion of its smelter at Unki. I am set to officially launch this much-awaited investment next week, thus enabling our mining industry to move one more step further up the platinum value chain. As I write, palladium, which is part of the platinum group metals, is now fetching more than gold on international markets. We thus stand to gain immensely from the firming price," he said.
"In mid-January next year, I am scheduled to visit Russia at the invitation of President Putin. The Russians are players in our platinum mining industry."
Under the new diamond policy, Government will -- through Zimbabwe Consolidated Diamond Company -- own 46 percent of all diamond operations in the country. Five percent will be reserved for local communities while the remaining 49 percent is open to any investor.
Only ZCDC, Murowa Diamonds and two other mining companies, still to be announced, will conduct diamond mining business.
Any other interested parties would have to partner any of the four entities.
Under the policy, ZCDC will establish a diamond value management centre with support from technical partners and its mandate will be to clean, sort and value add the precious stones before they are released to MMCZ for marketing.
Valuation has previously been an area of weakness for Zimbabwean diamonds, with some going under the hammer for as little as US$54 per carat due to lack of proper cleaning and poor marketing.