(TALKZIMBABWE) Greater priority for local diamond companies

Greater priority for local diamond companies
By: TSM
Posted: Saturday, October 2, 2010 11:31 pm

LOCAL diamond manufacturers will now get greater priority in the marketing of the gems after Government resolved to reserve 10 percent of locally-produced precious stones for purchase by Zimbabwean companies. Firms involved in diamond cutting and processing cried foul after failing to make purchases at the recent auctions of Chiadzwa gems.

However, new regulations published in last Friday’s Government Gazette mean they will no longer have to rely on importing diamonds as they will be able to buy them locally.

In terms of the regulations, which took effect on Friday, the Minerals Marketing Corporation of Zimbabwe (MMCZ) will retain 10 percent of the total volume of diamonds that will have been availed for marketing by local producers every month.

Local diamond manufacturers will get the 10 percent retention for each of the three diamond categories, which are gem quality diamonds, near-gem diamonds and industrial diamonds.

Beneficiaries of the “local Government pool” are required to submit quarterly applications to the MMCZ and to undergo inspection to ensure conformity to Kimberley Process Certification Scheme (KPSC) standards.“

A local diamond manufacturer who wishes to purchase gem quality or industrial diamonds from the local diamond pool for the purpose of cutting, polishing, crushing or otherwise processing them shall, not later than seven working days after the beginning of each quarter, make an application in the prescribed form to the general manager (of the MMCZ),” reads part of the enabling Statutory Instrument.

“The Inspectors of the Corporation ... shall have the power to enter and inspect the premises of any applicant local diamond manufacturer or local diamond manufacturer who has obtained rough diamonds from the local diamond pool and to inspect any relevant records or documents.”

The MMCZ, the Statutory Instrument said, will ensure applicants acquire the gems from the local Government pool within 30 days of application.

“The general manager shall, after expeditiously considering every application, sell the diamonds in the local Government pool to applicant local diamond manufacturers at the most competitive prices no later than the end of the calendar month in which the applications thereof were received,” reads the Statutory Instrument.

The MMCZ would also impose penalties on diamond producers who make false claims or fail to execute recommendations made in their applications.

“The general manager may ... prohibit him or her from making any further application (and) reduce the volume of rough diamonds that are still remaining at the end of the reporting quarter.”

Jail terms and exorbitant fines will be imposed for bogus manufacturers that may dupe the MMCZ.

The regulations come as analysts highlighted that selling diamonds to local players produced multiple benefits.

They said value addition of gems results in increased profits, growth of the diamond sector and promoted employment creation.