Zim urged to auction diamonds locally to cut costs

Published: 10 March 2014

Zimbabwe should consider auctioning its diamonds in the country to reduce costs that it incurs through logistical arrangements to sell the gems in Antwerp, Belgium, an expert said on Friday.

Sale of Marange diamonds in Belgium followed the removal of sanctions by the European Union on the Zimbabwe Mining Development Corporation and a culmination of high-level meetings between Government officials and the Antwerp World Diamond Centre (AWDC) both in Harare and Antwerp.

Diamonds being sent for sale in Antwerp are from the Diamond Mining Company, Jinan Investments, Anjin Investments, Marange Resources, DTZ and Mbada Diamonds, all companies operating in the Chiadzwa area. The first sale conducted last December totaled 279 723 carats and grossed of $10, 7 million while the second auction grossed $70 million.

Mbada Diamonds board chairman Robert Mhlanga told the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment that Zimbabwe had the capacity to conduct diamond auctions in the capital and does not need to send gems to Antwerp.

Mhlanga said Harare should not trust Belgium with its diamonds since it also belongs to the European Union bloc which slapped the country with sanctions.

"I strongly have reservations to Antwerp because they are our yesteryear enemies. We have actually reeled under sanctions, thanks to Brussels and for us now because they have claimed to have lifted sanctions and we run to Brussels, I have my reservations.

"I don't think that is good," he said.

He said besides having capacity to conduct diamond sales, Zimbabwe was losing money through commissions paid to handlers and dealers and transport fees whenever diamonds were sold in Antwerp.

"I strongly believe that Zimbabwe as a country we have the capacity, we have done auctions in this country where tens of companies attended and there are a multiplicity of benefits when you invite people to do tender in your own country.

"There are a host of other challenges associated with trading in Antwerp.

"It has been proven that we actually evaluate our diamonds better than what takes place there. There are a lot of logistical challenges, there are people who have to be paid commissions, here we don't pay any commission," he said.

Mhlanga said some buyers who bought local diamonds in Antwerp were reneging in paying up, a development that was hampering their operations.

"Now we have done that auction, other people are reneging on paying and it affects our day-to-day running of the business. So there are challenges in that whole arrangement. "I don't believe in appeasing a fool and I think we have suffered too much as a people and I don't think it's proper to go to Antwerp, I strongly believe that internally," said Mhlanga.

Zimbabwe extracts diamonds from Marange in Manicaland and Murowa in the Midlands. The country is believed to have the capacity to supply up to 25 percent of gems traded on global markets annually.

- New Ziana

Tags: diamonds,