Zimbabwe Polishing Firms Close Due to Expensive Licensing Policy

(IDEX Online News) – Nearly 70 of the diamond cutting and polishing firms that opened in Zimbabwe when diamond production started in the Marange area have closed due to what is seen as a prohibitively expensive licensing policy, according to a report.

The diamond cutting and polishing licensing policy includes a $100,000 fee that is renewed annually and an additional 15 percent sales tax which is levied on any company that buys diamonds from the producing companies.

Concerns have also been raised by the diamond cutting and polishing companies over failure to access the gems, The Zimbabwe Mail reported.

Mines Minister Walter Chidhakwa described the situation as a "tragedy" for the diamond sector, and hinted that the government will soon be reviewing its licensing policy.

“There are a number of companies that have brought in equipment for cutting and polishing of diamonds but are not operational and it’s a tragedy for us," Chidhakwa said. "If they were operating, they would have been creating jobs and earning income for the country.

“When we met with some of the companies, they disclosed that they had not been given access to diamonds that are cuttable by the producers in spite of the fact that we have got a Statutory Instrument that says 10 percent of our rough diamonds must be available for cutting and polishing by local companies,” he said.

The chairman of the Zimbabwe Diamond Technology Centre, Lovemore Kurotwi, said that a number of local businesses had invested heavily in acquiring the requisite facilities to cut and polish the diamonds but “received a raw deal from government.”

“There are several local companies that have imported technology to cut and polish diamonds but they have put this equipment in their backyards because the industry is prohibitive.

“It is sad for us to read that Zimbabwe’s diamonds have created 60,000 new jobs in India’s Surat diamond market that specializes in cutting and polishing when our companies are shutting down. If we look at the jobs that have been created in Dubai and other markets, the figures are shocking.

“We have therefore exported tens of thousands of jobs when our country is plunged in an unemployment crisis,” he said.