SURAT, INDIA — The small and medium diamond industry in the world’s biggest diamond cutting and polishing centre in Surat, badly hit by a weak rupee and skyrocketing rough diamond prices, is now rejoicing.
The European Union (EU) has lifted sanctions on Zimbabwe Mining Development Corporation (ZMDC), allowing the rough diamond imports into EU.
The flow of cheap Zimbabwe diamonds, according to industry leaders, into Antwerp is set to soften the rough diamond prices of the big diamond mining companies like De Beers, Alrosa, Rio Tinto and BHP Billiton.
Zimbabwe has the potential to supply around $4 billion worth of diamonds per annum.
Small and medium diamantaires in the Rs80 000 crore diamond industry of Surat had stopped purchasing rough diamonds due to 20% increase in their price since January 2013.
The Federal Public Service Economy sent a note to Antwerp World Diamond Centre (AWDC) in Belgium saying that the EU sanctions on ZMDC had been lifted.
Rough diamonds with Kimberley Process Certificates will be permitted into EU beginning September 25.
EU sanctions were originally imposed against President Robert Mugabe and his allies in 2002 over allegations that they were involved in political violence and human rights abuses and had also failed to hold free and fair elections.
Aniruddha Lidbide, a diamond analyst, told TOI: “Until now, companies based in Belgium, including Indian firms, could not buy and import rough diamonds into Antwerp.
“After EU’s decision to lift sanctions on ZMDC, firms in Antwerp can now import rough diamonds and sell them to the manufacturers in India and other centres.”
Lidbide added: “Now, ample rough diamonds will be available for consumption in the market, as Zimbabwe produces around 25% of the world diamonds.
“This would force other diamond mining companies in the world to soften their prices.”
Moreover, only the diamond workers in Surat have the expertise of manufacturing Zimbabwe diamonds due to their size and colour.
Most of the rough that would be imported by Antwerp will come to Surat for cutting and polishing.
India imports rough diamonds to the tune of $11 billion per annum.
Around 80% of the diamonds are imported from big diamond mining companies, while the rest come from Antwerp.
Dinesh Navadia, president of the Surat Diamond Association, told TOI: “The big diamond mining companies would be compelled to reduce their rough diamond prices as the cheap Zimbabwe goods have officially entered the market.
“Tens of thousands of carats of Zimbabwe diamonds would flow into the Surat market. This will end all the problems faced by the small and medium diamantaires.”