Indian Diamond Consortium Signs Agreement

As per reports from various quarters of the media, there has been a breakthrough for both the diamond industry of Gujarat, India and the Zimbabwean suppliers related to the highly controversial Marange field. The agreement for the deal was signed between the Surat Rough Diamond Sourcing India Limited and the Zimbabwe Diamond consortium in the capital city of Zimbabwe i.e. Harare. The agreement between the two heavyweights involves the Indian consortium committing to a guaranteed purchase of rough diamonds worth a minimum of USD 100 million per month. In addition to this, the deal also involves the Indians promising training for around a thousand Zimbabwean youngsters in a bid to kick start the Zimbabwean domestic industry of cutting and polishing diamonds.

The diamond industry of Surat, Gujarat is said to be one of the most important diamond cutting and polishing hubs in the world owing to the unbelievable number of diamond cutting and polishing artisans that it holds. In fact, the sheer volume of diamonds that go through the city and its diamond cutting and polishing professionals roughly amounts to around 90 percent of all the diamonds in the world. The industry thrives on importing rough diamonds from abroad, cutting and polishing them and then exporting them to different parts of the world.

The working principle behind the Indian consortium signing the deal, as per industry experts, is primarily based around two things which are Gujarat’s diamond industry having major issues in sourcing rough diamonds and increasing competition and pressure from the Chinese diamond industry. On the other hand, the driving force behind the Zimbabwean Diamond Consortium is related to its difficulty in achieving international approval for selling diamonds from the controversial Marange Fields of the Eastern Manicaland province. It is also believed that the Indian consortium’s offer of training one thousand Zimbabwean rookies in the art of cutting and polishing diamonds was a significant sweetener for the Zimbabweans.

Furthermore, many experts and analysts have also stated that the Zimbabwean diamond industry should now show a sudden spurt at the back of this Indian injection of significant funds and transfer of skills. However, the true impact of the deal is still murky because of the shadow of the Kimberley Process which is yet to be affirmed to entirely by the Marange Field’s operators. Additionally, the deal itself is under threat because the Deputy Minister of Mines, Gift Chimanikire categorically specified that the deal does not reflect the Zimbabwean government’s policy towards the diamond industry. He also said that the current government policy is the same as the older one. This means that the government of Zimbabwe will continue on with its system of auctioning diamonds and selling them to the highest bidders.

The Indian consortium of diamond barons known as the Surat Rough Diamond Sourcing India Limited, itself, is a very young company that was only established earlier in the current year. Moreover, the Indian company also had teething troubles in its inception in the form of name registration difficulties. Reportedly, the initial name of Surat Diamond Sourcing India Limited faced problems because it clashed with some of the names of members of the Surat Diamond Jewelry, which is a group of smaller companies. Consequently, the founders of the Indian consortium decided to add the word ‘rough’ to the name of their company to sidestep the problem of a No Objection Certificate.

As mentioned above, despite the deal being signed in the presence of the Zimbabwean government officials, the fate of this agreement still hangs in the balance because of the Kimberley Process still not being on board.