HARARE, May 6 — Zimbabwe will continue sending its diamonds at auction on the Dubai Diamond Exchange despite delays in the transfer of revenue generated from the last sale, says Mines and Mining Development Minister Walter Chidhakwa.

Zimbabwe held its inaugural diamond auction in Dubai in March when almost 400,000 carats were sold after it roped in a facilitator, Global Diamond Tenders, to organize the sale. The firm has yet to remit the full amount realized from the auction.

The diamonds were sold at an average price of 76 US dollars per carat, or a 5.4 per cent improvement from prices realised at the second Antwerp sale which attracted 72 USD per carat.

Finance and Economic Development Minister Patrick Chinamasa was quoted by a local weekly as suggesting that the government might stop marketing diamonds in Dubai. “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?” he was quoted saying at the weekend.

However, Chidhakwa said problems experienced from the last sale were not necessarily because Dubai was not a well-organized marketplace.

“Certainly the issue of Dubai is not the issue, the issue is that of the facilitator and we need to make a distinction because I think it is a lucrative market and that we had a facilitator who did not do according to expectation does not take away the fact that we still have an opportunity to continue to sell diamonds in Dubai,” he said.

“The expectation was that payments were supposed to be made within the first week of April and some of the payments were done within the first week of April and I can confirm that DMC got paid, DTZ-OZGEO got paid and the small consignment due to Kusena was also paid, Anjin was partly paid for,” he said in reference to some of the companies which had put up the diamonds for auction.

Chidhakwa said some of the problems arose from logistical challenges resulting in the facilitating company opening alternative accounts to transfer the funds.

“There were issues logistical in respect of Marange, Mbada and Jinan and one would not have expected these problems because we have used Dubai since 2007 and we have not had any payment problems to any one of our companies but I understand that somewhere along the line in respect of Marange and perhaps Mbada the facilitating company was forced to open alternative bank accounts in order to facilitate the movement of the funds. That was subsequently done and I understand that they will now be transferring the amounts to various companies,” he said.

Chidhakwa said the government was already in the process of ensuring that the same problems would not recur on subsequent sales.

He said the government was also considering various options to ensure that the mining companies did not experience operational challenges from the period they export diamonds to the time they receive their sales revenue.

“I cannot say that now that no, we are not going to use them (the previous facilitator). I think the team that was in Dubai will do their assessment and advise if we can use the same facilitator again but in the event that the we use another facilitator we want to make sure that the entire process right up to the transfer of money to Zimbabwe is made as efficient as possible and in the shortest possible time so that we don’t create the same problems we had in the last sale.

“Secondly, we think we need to create some bridge finance, we need to perhaps sit with a financial institution or financial institutions and encourage them to put bridging finance between when you move your production. There must be import, export financing that takes care of your issues in between and then that enables the companies to continue producing without hassles,” said Chidhakwa.

Zimbabwe has also held two auctions in Antwerp, Belgium, since the removal of the Zimbabwe Mining Development Corporation (ZMDC) from EU sanctions.

The first sale conducted last December totaled 279,723 carats and grossed 10.7 million USD while the second auction done in February grossed 70 million USD.

However, industry experts contend that Zimbabwe stood to benefit more if it auctioned the diamonds locally.