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Zimbabwe to auction 500 000 carats

by Staff reporter
25 Sep 2019 at 06:45hrs | Views
THE Minerals Marketing Corporation of Zimbabwe (MMCZ) says it will conduct another diamond auction before the end of the year targeting to sell between 400 000 and 500 000 carats.

A fortnight ago, MMCZ conducted its third auction this year, which saw 316 000 carats being auctioned. The value of the diamonds sold under the third auction is yet to be established as reconciliation is still in progress.

In an interview yesterday, MMCZ general manager, Mr Tongai Muzenda, said they anticipate better returns in the short-term on account of the level of pricing systems that would prevail in the markets.

"We are looking forward to conducting another diamond auction where we are targeting to sell between 400 000 and 500 000 carats by the end of November," he said.

The country expects to produce 4,1 million carats of diamonds this year up from 2,8 carats last year. At the peak of production  in 2012, Zimbabwe's output was 12 million carats.

Presently, Zimbabwe only has two diamond producers namely Murowa and the State-owned Zimbabwe Consolidated Diamond Company (ZCDC), which was formed in March 2016 after Government evicted all diamond mining firms in the Chiadzwa fields following the expiry of their licences.

In June this year, the country invited seven international diamond buyers to participate in a private sale of nearly two million carats. Under a private sale arrangement, selected buyers are invited for valuations of diamond parcels available for sale.

The price the buyer offers will then be compared with the valuations that would have been done by the producer.  And if there is a variance in what the producer is asking for and what the buyer is prepared to pay, the parties will negotiate.  If the parties fail to reach consensus on price, the parcel will be rolled over and other buyers will be invited. Private sales are a new model since consolidation of the diamond industry.

In the past, the marketing of diamonds was only done through scheduled auctions where buyers were publicly invited.  Zimbabwe, which has in the past not realised expected earnings since the formalisation of diamond mining operations in Manicaland, is ramping up output and negotiations are ongoing with some global investors.

In July this year, the Government signed a joint venture agreement with one of the world's top diamond producer by volumes, Alrosa Overseas, for the exploration, extraction and marketing of Zimbabwe's diamonds.

The move was an endorsement of President Mnangagwa's robust drive to attract investment into the country in a bid to turnaround the economy.  The agreement with Alrosa is expected to see an increase in Zimbabwe's diamond output, and thrust the sector on the path to attaining the 10 million carats by 2023.

Source - chronicle