Zimbabwe’s largest diamond buyer, India, has announced it is putting brakes on the import of diamonds from the country until Harare resolves its differences with the global diamond watchdog, the Kimberley Process (KP).
According to MineWeb, an international mining reports website, the Indian government’s Union Ministry of Commerce had also asked the country’s gems and jewellery exporters and traders to put on hold trading in Zimbabwe’s diamonds until the dispute was resolved.
The move is a major setback to the Indian diamond company, Surat Rough Diamond Sourcing India Limited (SRSDIL), which had inked a deal amounting to $1,2 billion per year, to import gems from Zimbabwe.
The decision by the Indian government has sent shock waves with players warning the move could result in a huge shortage of gems and this would lead to large-scale smuggling of the stones.
“We will have to follow the decision, though the ban will ensure a huge shortage of roughs and will unwittingly lead to large-scale smuggling of diamonds,” Manikbhai Suratwala, a gem exporter based in Mumbai, was quoted by the international media as saying.
Suratwala said Zimbabwe’s earnings from mineral exports had increased by 25% to $807,2 million during the nine months to September.
“If there was no ban on the roughs, earnings from mineral exports could top $1 billion this year,” Suratwala said.
However, the Gems and Jewellery Export Promotion Council (GJEPC) has welcomed the move.
The GJEPC has 6 500 members spread all over India and is primarily involved in introducing Indian gem and jewellery products to the international market and promotes their export.
“We will adhere to the timeline until a mutual settlement is reached between the member countries. We do not want to antagonise other importing countries and interested parties,” said a council member.
Sanjay Kothari, vice-chairman of the council said that a decision in this regard was taken by the council since the United States, UK and Australia continued to have reservations over the export of diamonds from Zimbabwe.
Mines and Mining Development secretary Thankful Musukutwa was on Wednesday uncooperative saying: “I am in a meeting and I can only comment after that.”
Mukesh Kumar, second secretary at the Indian embassy in Harare, said they were not yet aware of such developments.
“We do not know anything,” Kumar told NewsDay.
“I cannot authenticate this unless I receive information from the government of India. We should be the first people to get such information.”
But international reports yesterday said the Indian government had placed on ice the importation of Zimbabwe’s diamonds.
India is emerging as a big consumer market for diamond-studded jewellery, in addition to being a major exporter.
The last two auctions of KP certified diamonds reflected a healthy participation by Indian diamantaires, especially those from Surat.
Zimbabwe has vowed to continue selling its diamonds arguing the country was in compliance with all the requirements of the KP. The Zimbabwean government has accused the KP of engaging in “politics”.
During a KP meeting held in Jerusalem, Israel, last month representatives of the government and the council called for the lifting of the suspension on the export of diamonds from Chiadzwa.
However, no concrete decision was reached.
International traders have said that banning of the diamonds would not help resolve the issue, since gems from Zimbabwe would enter the trade channel through nefarious means.