HARARE, Feb 20– The Zimbabwe government has announced plans to set up a diamond exchange and reduced the licence fees for diamond cutters and polishers operating in the country from 100,000 US dollars a year to 20,000 USD for 10 years.

Mines and Mining Development Minister Walter Chidhakwa told journalists here Tuesday that the reduction in fees was aimed at promoting the growth of the local beneficiation industry.

More than 20 diamond polishers had closed their operations here in the past two years because of the high licensing fees while some failed to commence operations. Reports indicate that only one cutting and polishing company has remained open.

“Our position is that we want to build an industry. We are not in the business of selling licences, we are in the business of creating industries and that industry then gives everybody jobs, income by way of taxes and profits. We agreed with them that we would reduce the licence fees from 100,000 to 20,000 (USD),” said Chidhakwa.

He said the cutting and polishing companies would create employment as well as contribute to government’s revenue streams.

Chidhakwa said the proposed diamond exchange was part of efforts to encourage local value addition and beneficiation as well as to ensure the country derived maximum value from its natural resources.

“The intention is to build a diamond exchange where you will market your diamonds but also build little factories which people can rent and operate their businesses there,” he added.

The exchange will allow the country to invite international buyers to come and purchase diamonds in the country as opposed to the gems being sold at other foreign diamond hubs. A sale of Zimbabwean diamonds is taking place in Antwerp, Belgium and ends on Saturday.

Chidhakwa reiterated sentiments already expressed by Finance Minister Patrick Chinamasa that the country should explore selling its gems at other diamond hubs such as Dubai and Shanghai to try and maximise earnings.

He said the next Zimbabwe diamond sale would be in Dubai while the local one would, at best be held by mid-year as modalities were still being worked out. “The same buyers going to the Dubai Diamond Exchange can be invited to come to a makeshift Zimbabwe diamond exchange if we can put it together, so we are working on that,” he said.

Chidhakwa said the Diamond Beneficiation Association of Zimbabwe (DBAZ) had been asked to come up with a proposal on how the companies would operate in a diamond exchange, as well as provide for movement of the gems in a secure way.

He said his Ministry was against polishing and cutting firms operating in scattered localities. “I am unhappy about them operating in all sorts of places and we hope we can put them together in a secure zone,” he added.

Zimbabwe has vast diamond deposits and is expected to contribute up to a quarter of world demand in the next decade. Meanwhile, the government in conjunction with the private sector will host a beneficiation conference in the resort town of Victorian Falls at the end of this month.

The Feb 27-28 conference will run under the theme: “Maximising value from the mining sector in Zimbabwe”.