The Sunday Mail
Itai Mazire – Sunday Mail Reporter
Diamond miners spend at least US$100 000 each just to attend international auctions hence the need to urgently start local sales, an industry official has said.
Since December 2013, Zimbabwe has attended five auctions at the Dubai Diamond Exchange (UAE) and Antwerp World Diamond Centre (Belgium); and is planning others in Surat (India) and Shanghai (China).
Diamonds from Chiadzwa earned between US$38 and US$78 per carat at these auctions, against research indications that local sales could fetch between US$40 and U$150.
Diamond Mining Company general manager Mr Ramzi Malik, whose firm operates in Chiadzwa alongside six others, said external auctions attracted multiple levies and hurt local operations because proceeds were transferred late.
Each company pays the facilitator a commission of 1 percent of gross sales, while a further 2 percent goes to exchange rate losses, among other charges.
Conversely, local sales attract a one-off commission to the Minerals Marketing Corporation of Zimbabwe.
Countries like Botswana, the world’s largest diamond producer by value, conduct domestic sales.
Mr Malik said: “We also pay for export permits at a minimum of around US$10 000. We lost US$65 000 in exchange rate losses during the last Dubai auction. The amount got to US$100 000 when we added the (commissions) and that is a huge amount in business.
“We also have to pay security, insurance and accommodation, among other costs related to our stay in the foreign countries.
“In addition, it takes four to five weeks for us to receive our proceeds and this cripples our operations, even making it difficult to pay our workers or buy equipment.”
Mines and Mining Development Minister Walter Chidhakwa told the National Assembly on Wednesday that a local auction was scheduled for November.
He had earlier told The Sunday Mail: “You can never say you are satisfied with the price. The idea is to always want more. But what I can say about the international diamond auctions is that there is transparency when the bidders determine the price.
“The diamonds go to the highest bidder. So, this means at least it is a fair process. We let the market determine the price and we are convinced that these are reputable international auctions.
“What you should understand is that this is an average price. An average price means at one point you can sell a diamond of gem quality for, let’s say, US$10 000; but on the other hand you have a high volume of industrial diamonds that sell for a very low price of only a few dollars and this brings down the average price.”
