Summary of Diamond Regulations
The Minerals Marketing Corporation of Zimbabwe (Diamond Sales to Local Diamond Manufacturers) (Amendment) Regulations, 2014 (hereinafter “the Regulations”) came into force on May 9, 2014.
The Regulations have raised the percentage of diamonds to be retained for sale to local diamond manufacturers from a maximum of ten percent to a minimum of ten percent, meaning there will be more rough diamond available within the local diamond pool;
Local diamond manufacturers are now required by law to sort by grading the rough diamonds by shape, clarity, colour and size. This was previously not a statutory requirement;
The Regulations bring about new transportation requirements for purchased rough diamonds, to the effect that a manufacturer shall ensure that the diamonds are transported with full insurance cover from point of purchase to factory;
The definition of “unworkable rough diamonds” in the Regulations is a necessary improvement to the law, as it gives those manufacturers in the trade a clear definition of what is accepted as “unworkable”. In addition, the manufacturer has the obligation to account for the source of the unworkable rough diamonds, which was not previously provided for;
The Regulations allow local diamond manufacturers to not only partake in international diamond sales, but also to export any unworkable rough diamonds- previously the law was silent on this;
The Regulations have reduced the prescribed licence fees from a previously prohibitive $100,000.00 a year, to $20,000.00 for a period of ten years.
The cutting and polishing sector will largely benefit from this amendment, since it regulates aspects such as transportation, licence fees and participation in international diamond sales, which previously were unregulated. The procedures involved in the sale and /or export of rough diamonds however in so far as they are controlled by the MMCZ, Chamber of Mines and Ministry of Mines – remain the same. Overall, local manufacturers can now bid against international manufacturers, which makes the bidding more market oriented than before – whilst in the near future, there will be more international diamond sales taking place in Zimbabwe as a result of the regulation of such.