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ZIMBABWE can expect a surge in the value of its diamonds following the country’s re-engagement with the Antwerp World Diamond Council in Belgium. This is welcome news indeed as the country desperately needs huge cash injections to offset the current liquidity crunch.
The development also comes against the backdrop of the European Union lifting sanctions on the Zimbabwe Mining Development Corporation (ZMDC) and the Minerals Marketing Corporation of Zimbabwe (MMCZ) in September paving the way for the diamonds from Marange to be traded openly on the world stage.
Zimbabwean gems are fetching far less than they deserve on the market considering their quality.
Since the discovery of the gems in the Chiadzwa area of Manicaland, Zimbabwe had adopted sanctions-busting methods to trade its diamonds and was not realising the full value of its gems.
Some revenue accruing from the sale of diamonds was even seized by the United States as parts of its sanctions regime since Washington is at the centre of world financial systems.
So far, the US has taken more than $30 million destined for Zimbabwe through its Office of Foreign Assets Control. But an avenue has opened for Zimbabwe after the resumption of trade with AWDC which has about 2 000 traders of the gems.
Last month, a delegation of the AWDC leadership visited Zimbabwe and held high level talks with three Government ministers and senior officials from the ZMDC and Minerals Marketing Corporation of Zimbabwe to concretise the resumption of trade between the country and the organisation.
Both the AWDC leadership and the Zimbabwean authorities were agreed that the lifting of sanctions against the ZMDC would boost the value of diamonds extracted in Zimbabwe spawning a boon for the country’s economy.
The boon is underpinned by the fact that Zimbabwe’s diamonds would now be exposed to about 2 000 buyers under the Antwerp network.
A high powered Zimbabwean delegation is in Antwerp this week where it is expected to hold discussions with AWDC officials on the marketing of the gems.
The trip will also enable Zimbabwe to look into modalities of establishing the biggest diamond trading hub on the back of a high demand for Marange gems.
According to Afrasia Kingdom, the Marange diamond fields will become the largest diamond producer in the world based on the 16,9 million carats the project is expected to produce this year.
This means that the envisaged trading hub in Zimbabwe would have enough back up, considering that the country’s diamonds constitute nearly 30 percent of those found in the whole world.
Mines and Mineral Development Permanent Secretary Professor Francis Gudyanga, who is leading the Zimbabwean delegation in Belgium, told our Harare Correspondent on Tuesday that concerned Government ministries were already looking into the modalities of setting up the diamond trading market.
“We want to engage AWDC to be mentored so that we have our own diamond trade centre in Zimbabwe that will attract buyers from all over the world,” he said.
“It is a matter that is on the planning stage and it’s being discussed at the ministerial levels.
“We want them (AWDC) to impart skills in us on the cleaning, polishing and marketing of the diamonds. We believe that with the partnership, we will have a vibrant diamond centre in Zimbabwe with many jobs being created out of that”.
If the diamond trade centre is eventually established, it would compete with major centres like Antwerp, New York, Mumbai in India and Dubai in the United Arab Emirates.
Other diamond trading centres, although bringing low business, are found in Israel, Japan, China and Russia.
With Zimbabwe’s diamonds already being sought after on the world market, the diamond trading centre in the country would not be short of traders.
However, while we welcome the thawing of relations between Zimbabwe and the EU and the subsequent lifting of sanctions on the ZMDC and MMCZ, we remain concerned with the stance adopted by the US which maintains that it will seize funds accruing from the sale of Marange diamonds at the AWDC.
With most transactions in the global economy being conducted via New York, the US Government has said it would enforce its Office of Foreign Assets Control (OFAC) law that facilitates the confiscation of money belonging to entities covered by sanctions under the Zimbabwe Democracy and Economic Recovery Act (ZDERA).
Responding to questions from our Harare Bureau last week, US Ambassador to Zimbabwe Mr Bruce Wharton said the OFAC law would be applied on Zimbabwe’s diamond trade in Europe.
“If European entities seek to transact business via the US banking system, US laws will apply,” he said. The imminent trade in diamonds between Zimbabwe and the EU leaves the Americans in an invidious position if they seize funds Zimbabwe realises because tampering with the money would threaten European stakes in the Marange diamond trade.
We therefore urge the US to reconsider its sanctions position on Zimbabwe and follow in the footsteps of its European colleagues in lifting the embargo on diamonds from Zimbabwe.
Online Reporter