#mugabe backed Dubai diamond exchange has failed

via Mugabe backed Dubai has failed, minister 04/05/2014 by NewZimbabwe I Agencies

A CABINET minister has said the Dubai Diamond Exchange (DDE) has failed to be a trustworthy market for Zimbabwean diamonds after delaying to remit proceeds from a March sale.

Early last month President Robert Mugabe, accompanied by his wife Grace, travelled to the United Arab Emirates and visited the Dubai Exchange as the government sought new markets for the country’s diamonds.

Speaking during the visit, Mugabe was full of praise for DDE, saying: “It is encouraging to see how Dubai has developed tailor-made strategies to an industry which was new to them only 12 years ago.

“We have been overwhelmed by the enthusiasm and conviction in which policies have been pursued and businesses successfully attracted.

“We are happy to be part of this success story and look forward to continue a mutual beneficial relationship with Dubai in the future exploration and exploitation of our diamond business.”

But it has emerged Zimbabwe has not received the US$30 million earned from some sold 400,000 carats of diamonds sold in Dubai in March this year.

Finance Minister Patrick Chinamasa was quoted by the Sunday Mail newspaper on Sunday as saying that the DDE had failed the test and hinted that the country might discontinue diamond sales there.

“Naturally, DDE have failed the test. Remember, when we went there we were testing the market. Why would we continue selling our diamonds in Dubai under such conditions?” the minister said.

He added: “Obviously, the delay (in remitting the money) is affecting us. We could have used that money to fund some of the projects awaiting completion. Naturally, the delay is crippling the mining companies that need the money to run operations.

“I am not sure of the reason why it has taken this long for us to receive our money. I haven’t found the time to talk to Minister Chidhakwa to find out what is really happening, but I am eager to engage him so that I know what is happening.

“We are concerned that we have not received that money; we are still waiting. Obviously this has negatively affected our mining operations. Right now, we are refocusing on new areas at the mine. We need inputs such as equipment and diesel,” said Jinan managing director Mack Ncube.

Munyaradzi Machacha, of Anjin Investments similarly moaned: “We also have creditors who need to be paid. So, we are hoping we will receive the money as soon as possible.”

“The Secretary (Professor Francis Gudyanga) is pushing hard for the organiser to transfer the money as soon as possible,” he said.

“What gave us confidence (in the Dubai market) was the price. We cannot condemn anyone at the moment as we are still gathering what is happening. But obviously the delay will raise questions.

“I do not think this has something to do with capacity, but maybe administration issues. We will get to the bottom of the matter, whether the delays were deliberate or not.”

The government had hailed the Dubai auction for offering relatively higher prices than those offered in Antwerp.

A carat in Antwerp fetched US$72 in February’s sale while in Dubai a carat was fetching US$76.