by Pranay Narvekar, Pharosbeam Consulting at Zimbabwe

Zimbabwe was the proud host to the second Diamond Conference.  The first Diamond Conference held in 2012, was more a coming out statement for the country and the 2014 conference was where Zimbabwe wanted to take its place as an important rough producing nation.

The SADAC nations, who produce over 50% of the global rough supplies, showed a strong presence, reiterating their support for Zimbabwe as well as underlining their solidarity.  Their desire and resolve to play an increasingly proactive role in decisions which shape the future of the diamond industry was evident.  Initiatives, including a coordinated beneficiation policy and steps across the region, were suggested.  Other SADAC nations also offered their experiences and provided pointers as to what pitfalls Zimbabwe could avoid.

The panel on Zimbabwe’s role talked about a more holistic approach to development of the Zimbabwe diamond industry.  The African nation is looking at not just mining diamonds, but also beneficiation through polishing, trading, and jewellery manufacturing.  The government is in the process of establishing a diamond park where all these industries can be housed in close proximity.  Along with this, efforts are also being stepped up in exploration, so as to identify more sources of diamonds within the country.

Another important discussion focussed on the expectations from the beneficiation process. Delegates from other SADAC countries indicated that beneficiation is a gradual process and will take time.  While expectations to add greater value to the diamonds are good, doing things too quickly might lead to setbacks.  It was highlighted that the polishing industry is highly competitive and the process should be a deliberate one, and a country cannot only rely on greater subsidies to beneficiate.  Greater emphasis was suggested in investments in training as well as developing a local entrepreneur base.  The country was also requested to focus on goods which can be economically cut within the country, rather than just focus on run of mine carats or value.

The discussion on the applicability of OECD guidance to diamonds and KP was the most hotly debated panel.  The OECD panellist indicated the guidance applies to companies, who are expected to do their due diligence, akin to an enhanced KYC.  He also indicated that the OECD currently has no mandate to create a specific guidance for precious stones and any OECD process involves all affected entities before developing any specific process.  He also clarified that the due diligence guidance does not require companies to know the source of their goods, as has been portrayed by certain entities within the industry.  The other industry participants echoed the concerns that the guidance was portrayed as a ‘chain of custody’ requirement.  The panel also indicated that there was a concern about how a ‘conflict’ zone is defined, who determines how those areas are identified and that the OECD was being used by certain vested interests.  KP was a mandatory compliance action, while the OECD guidance was voluntary private action and hence the two were not directly comparable.

Speakers also expressed their dismay at the position being taken by the WDC, which was seen as being against the majority of the industry.  It was felt that the WDC was now being controlled by a few large mining and retail companies, who were promoting policies which did not benefit the larger majority of the industry.  The SADAC nations indicated that they would strongly represent the producing countries at the KP.

The atmosphere was that hope and the desire to achieve future growth.  The new minister of Mines, who was also the host of the conference, was repeatedly complimented for the positive steps he had taken for the benefit of the diamond industry, which would go a long way in reviving the local beneficiation efforts and the producing industry.  He has taken steps to amend regulations which were fettering the local industry.  He also mentioned that they were looking at the possibility of removing the VAT on local sales of rough to encourage the local industry as well as a drastic reduction in charges to be paid to become a diamond dealer.