Business / Economy
Zimbabwe is a threat to Diamond business: Even-Zohar
08 Feb 2011 at 15:04hrs | Views
THE world's diamond industry was expected to continue to recover in 2011 but it could not afford the reputational shock provided by Zimbabwe, said Chaim Even-Zohar, the renowned diamond analyst and president of Tacy Ltd.
"The diamond industry cannot afford the situation in Zimbabwe," said Even-Zohar who added that the politicisation of the industry was damaging. He was referring to suspicions in the industry that Zimbabwe could not control smuggling of diamonds form its Marange diamond fields to Mozambique. As a result, the country has periodically been prevented from exporting diamonds by the Kimberley Process, a near 10 year old organisation created to stop conflict diamonds.
Even-Zohar, who was speaking at the Mining Indaba in Cape Town, said that output from Zimbabwe's Marange diamond fields was being conflated with conflict diamonds even though it was "not a conflict situation by any means".
"Miners can make a lot of money from the diamond business but they need to handle its reputation issues," he said.
The Marange diamond fields, which Even-Zohar said was producing about 1 million carats per year, was capable of generating $2bn in annual revenues, according to reports.
Even-Zohar added that the diamond industry was vulnerable to shocks over which it had no control. For example, a cyclone over the Christmas period could be highly damaging to full year retail sales of diamonds where it's thought each day in the 25 days before Christmas was equal to 1% of total retail sales.
Turning to the market, Even-Zohar said global retail diamond demand was expected to grow 7.9% in 2011 following a 5.1% decline in 2007.
Rough diamond production, meanwhile, was forecast to grow 20% "if not more" to about $15bn in value. This follows $12.5bn in sales last year, a 68% increase over production levels in 2009 when De Beers cut its production by more than half.
"The diamond industry cannot afford the situation in Zimbabwe," said Even-Zohar who added that the politicisation of the industry was damaging. He was referring to suspicions in the industry that Zimbabwe could not control smuggling of diamonds form its Marange diamond fields to Mozambique. As a result, the country has periodically been prevented from exporting diamonds by the Kimberley Process, a near 10 year old organisation created to stop conflict diamonds.
Even-Zohar, who was speaking at the Mining Indaba in Cape Town, said that output from Zimbabwe's Marange diamond fields was being conflated with conflict diamonds even though it was "not a conflict situation by any means".
"Miners can make a lot of money from the diamond business but they need to handle its reputation issues," he said.
The Marange diamond fields, which Even-Zohar said was producing about 1 million carats per year, was capable of generating $2bn in annual revenues, according to reports.
Even-Zohar added that the diamond industry was vulnerable to shocks over which it had no control. For example, a cyclone over the Christmas period could be highly damaging to full year retail sales of diamonds where it's thought each day in the 25 days before Christmas was equal to 1% of total retail sales.
Turning to the market, Even-Zohar said global retail diamond demand was expected to grow 7.9% in 2011 following a 5.1% decline in 2007.
Rough diamond production, meanwhile, was forecast to grow 20% "if not more" to about $15bn in value. This follows $12.5bn in sales last year, a 68% increase over production levels in 2009 when De Beers cut its production by more than half.
Source - Byo24News
