Zimbabwe to continue Dubai diamond sales [!?]

via Zim to continue Dubai diamond sales: Minister – DailyNews Live by John Kachembere  6 MAY 2014

Mines minister Walter Chidhakwa yesterday said Zimbabwe would continue to sell its diamonds in Dubai despite the country failing to redeem $30 million from Global Diamond Tenders, a month after the auction.

“Dubai isn’t the issue but the facilitators. We have been selling our diamonds there since 2007 and we have never had problems before. It’s a lucrative market and we still have an opportunity to sell in that market,” he said.

Zimbabwe exported nearly 400 000 diamond carats in March to the Dubai Diamond Exchange (DDE) under a market-testing exercise. In the process government secured a facilitator, Global Diamond Tenders, to link them with buyers.

The diamonds were then sold at an average price of $76 per carat, marking a 5,4 percent improvement from the second Antwerp sale which attracted $72 per carat.

Of the $30 million realised, $4,39 million was destined for Treasury while the Zimbabwe Revenue Authority (Zimra) and Minerals Marketing Corporation of Zimbabwe (MMCZ) were also entitled to a percentage.

The remainder was to be shared between the Zimbabwe Mining Development Corporation (ZMDC) and the mining firms. In addition, the facilitator was entitled to four percent of total proceeds.

Although the money is yet to be transferred, industry experts say under normal circumstances transactions should not take more than three days.

Finance minister Patrick Chinamasa this week blamed the Dubai Diamond Exchange for the delay and said the exchange had “failed the test”.

“Obviously, the delay 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,” Chinamasa was quoted as saying.

“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.

“Naturally, they (Dubai Diamond Exchange) 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?”

However, Chidhakwa noted that diamond companies,  Diamond Mining Company, Kusena, and DTZ-OZ Geo were paid while Anjin was partly paid.

“There were some logistical problems with Marange Resources, Mbada Diamonds and Jinan. I understand the facilitator was forced to open a new bank account to facilitate the transfer of funds. That has been done and anytime now, they will be transferring the money to the various companies,” he said.

The mines minister noted that although the facilitator had failed to meet expectations, it was a learning curve for Zimbabwe.

“Our team was also in Dubai and they will do a review on the whole process and this will help us in choosing our next facilitator,” said Chidhakwa.

The delay in payment has severely affected government and exporting mining firms which had earmarked the proceeds for key projects and operations.