Enter into joint ventures – Chidhakwa

via Enter into joint ventures – Chidhakwa – NewsDay Zimbabwe March 14, 2015 by Veneranda Langa

MINES and Mining Development Minister Walter Chidhakwa has called on diamond mining companies to enter into joint ventures with diamond cutting and polishing firms to ensure Zimbabwe’s diamonds are not exported as raw materials.

Chidhakwa appeared before the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Development on Thursday. He told the committee that even after reducing the licence fees for diamond cutters and polishers from $100 000 per year to $20 000 for 10 years, diamond cutting and polishing companies failed to get capital to purchase the diamonds for their businesses to run.

He was asked by Chegutu East legislator Webster Shamu to explain progress made on cutting and polishing of diamonds locally and beneficiation of platinum which was being sent to South Africa for smelting.

“I was not seeing action on the part of diamond cutters and polishers, and when I asked them why they said they invested a lot over the past six years and were still paying rentals for their machinery, and they did not have money to buy the diamonds.” Chidhakwa said.

“I said the diamond cutting and polishing companies should set up joint ventures with mining companies so that they cut, polish and export diamonds at high amounts and then they can share the proceeds.”

Chidhakwa said he had discussed the issue with the Reserve Bank Governor John Mangudya to find money to capitalise some of these companies.

“We said if diamonds are destined for domestic cutting and polishing, we will not make companies pay the 15% royalties and value added tax (VAT),” the minister said.

He said Finance Minister Patrick Chinamasa in his budget statement introduced 15% tax on exports of raw platinum to encourage companies to establish smelters for local beneficiation of platinum.

“Bindura Nickel raised $20 million two weeks ago to resuscitate its smelters. We said we wanted to configure it in such a way that it does not only take nickel, but also platinum. The Bindura Nickel smelter will be operational in the next six months. What is going out of the country at the moment is the concentrate. What we must do is to develop smelter capacity for 500 000 ounces because at the moment the country produces 400 000 ounces,” Chidhakwa said.

He said at the moment 30% of platinum was smelted while the rest was exported as concentrates without doing any value addition.