Diamond polishing workers in the Southern African state of Zimbabwe. The country is a large repository of gems., a photo by Pan-African News Wire File Photos on Flickr.
Gems body seeks US$50m for value addition
December 19, 2013
Business Reporter
Zimbabwe Herald
The Diamond Beneficiation Association of Zimbabwe says modalities are currently underway to set up of a funding vehicle for its members worth between US$30 million and US$50 million to allow full-scale operations in diamond cutting and polishing.
DBAZ chairman Mr Richard Mvududu told Herald Business that the association was optimistic that whatever funding model they were going to come up with after negotiations with potential financiers, the fund would go a long way in enhancing capacity utilisation.
“We realise that once we manage to establish a fund whether through issuance of bonds or assistance from the Treasury or any other model that we would have agreed on with financiers we are currently engaged with, members would benefit through accessing loan facilities.
“Currently, our members are sitting on capacity to process 75 000 carats of rough diamonds monthly which they intend to increase by 100 percent in the next one years. As such, funding remains critical in order to achieve this goal,” said Mr Mvududu.
He added that the actual value to be realised from the processing varied with different prices that the various companies access the gems at, but the association projects gross turnover to be around US$22 million per month.
Mr Mvududu said that once cutting and polishing capacity was enhanced, this also places Government in a position to widen it revenue collection base that is currently narrow.
The DBAZ chairman also said they would establish a diamond grading laboratory which would eliminate under-valuation of the gems.
“Value addition goes beyond cutting and polishing rough diamonds, but instead the value chain consists of about six stages, and as such our model as an association is to capacitate ourselves to get involved at all the stages.
“As such we also want to channel part of the funds that we are seeking to mobilise in the establishment of a diamond grading laboratory that will enable our rough diamonds to increase in their value,” he added.
The diamond value addition chain involves selling, cutting and polishing, cleaning and sorting, laboratory grading, jewellery making and retail of the finished product.
By participating in all these stages, Zimbabwe could fetch five times more in terms of monetary value.
Mr Mvududu expressed satisfaction at Government’s willingness to see the value addition and beneficiation agenda bear fruit, saying that they had already started the process of reviewing beneficiation licences and tax laws on diamonds as a way of creating an enabling operating environment for players within the processing value chain of diamonds.
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