Zim’s diamond sector learns from region
By Southern Times Writer
Harare – Zimbabwe has started to implement lessons from other countries in the region to market its diamonds effectively following years of anguish that have seen the country failing to get maximum profits from the diamond sector.
This year, Zimbabwe plans to stock two million carats of the precious stones and sell the stones at more than US$100 per carat by employing valuation and marketing strategies from other countries in the region, particularly Botswana and Namibia. Previous sales of diamonds from Zimbabwe have averaged US$50 per carat, which is far less than the price per carat for diamond producers’ countries in Southern Africa, which is the world’s diamond hub.
As a relative rookie in the diamond sector, Zimbabwe has not fared as well as its regional colleagues whose economies rely heavily on the diamond industry. Since the start of the year, Zimbabwe suspended the sale of its diamonds as it explored new strategies from its regional colleagues to bring more revenue from the precious stones. In 2016, Zimbabwe commenced its overhaul of the diamond industry by jettisoning all companies that mined in the gemrich Marange area to allow a newly created government firm, the Zimbabwe Diamond Consolidated Company (ZCDC), to steer the new trajectory.
ZCDC chief executive Dr Morris Mpofu told The Southern Times from Harare that as a new player in the lucrative industry, Zimbabwe will engage with its regional colleagues and copy lessons to revitalise its diamond sector. “As a new kid on block there are a lot of success stories from other countries especially Namibia and Botswana.
They exhibit best practices in their mining and diamond recovery processes. Their diamond value management models creates opportunities for ZCDC to ensure continuous improvement of its processes and achieve operational efficiency and production effectiveness.” Dr Mpofu revealed officials from ZCDC will visit Gaborone this month to get practical lessons from Botswana’s diamond industry.
“In the design of our business model we have bench-marked from desktop studies with the best practices from these countries. Mid September we are scheduled for a benchmarking visit to Botswana to have an on-the-ground study of their best practices and success stories.”
The diamond sector has been a conundrum for Zimbabwe’s government as the precious stones have failed to live up to their billing and the country’s Finance and Economic Development Minister Patrick Chinamasa constantly expressed his frustration that treasury was getting trifling amounts from the diamonds. In what was a classic case of the paradox of the plenty, Zimbabwe was rated one of the leading producers of rough diamonds in the world, but the country has little to show-owing to lack of accountability and poor marketing, among other factors.
A sweeping decision by the Ministry of Mines and Mining Development in February 2016 to throw out all companies and pave way for takeover by a newly created government firm, the Zimbabwe Diamond Consolidated Company (ZCDC) led to a period of soul-searching as well as court fights by the evicted companies.
But with the dust now settled, hope is on the horizon that Zimbabwe can emulate its regional colleagues such as Botswana, Namibia, Lesotho and South Africa whose economies have been significantly boosted by diamonds. Namibia and Botswana employ a similar strategy in the valuation of diamonds as the stones are sorted and valued through a 50:50 joint venture between the government of both countries and De Beers. The joint venture companies have effective strategies in the sorting and valuation of diamonds, which Zimbabwe is seeking to employ.
Plagued by lack of transparency, Zimbabwe’s President Robert Mugabe once remarked that up to US$15 billion of diamond revenue could have been siphoned out of the country due to illicit deals.