Business / Companies
70 diamond firms close shops
05 Jan 2014 at 05:33hrs | Views
Nearly 70 of the diamond cutting and polishing firms that flooded into the country when the Marange diamond fields became operational have closed shop over the past three years amid concerns over the country's licensing policy that does not promote value addition in the diamond mining industry.
The country's diamond cutting licensing policy which includes a US$100 000 licensing 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 for purposes of cutting and polishing on the domestic market has been described by industry experts as restrictive.
Concerns have also been raised by the diamond cutting and polishing companies over failure to access the gems.
The Sunday Mail reports that nearly 70 of the companies that were initially registered by the Ministry of Mines and Mining Development to cut and polish diamonds have closed shop citing viability challenges.
Mines Minister Walter Chidhakwa described the situation as a tragedy for the diamond sector hinting that Government will soon be reviewing its licensing regime.
"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. 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, Mr 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 specialises 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
The country's diamond cutting licensing policy which includes a US$100 000 licensing 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 for purposes of cutting and polishing on the domestic market has been described by industry experts as restrictive.
Concerns have also been raised by the diamond cutting and polishing companies over failure to access the gems.
The Sunday Mail reports that nearly 70 of the companies that were initially registered by the Ministry of Mines and Mining Development to cut and polish diamonds have closed shop citing viability challenges.
Mines Minister Walter Chidhakwa described the situation as a tragedy for the diamond sector hinting that Government will soon be reviewing its licensing regime.
"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, Mr 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 specialises 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
Source - Sunday Mail
