Zimbabwe is probably the world’s top producer of diamonds, at least in volume, but it would be hard to see this status in terms of the three critical factors: significantly stronger exports, more revenue in the annual budget and more jobs for Zimbabweans.
There are a number of things that still have to be done for the country to get full value of this resource, but the most important is to have the value added processes, the cutting and polishing, done in Zimbabwe.
Our major diamond producing neighbours, Namibia and Botswana, have already been moving away from the old industrial system of mining diamonds in the Third World and doing the cutting and polishing in Europe and Israel.
Now Zimbabwe is doing the same, buying state-of-the-art equipment from India, which itself is not just the first country in the world to find diamonds but has now built up a modern cutting industry, developing technology that combines with the lower wages in that country compared to traditional processors to take a serious share of the world’s cutting business.
Indeed, the Indians have managed to figure out how to cut and polish stones smaller than those usually used in jewellery, so getting more value from a higher percentage of mined stones.
Processing stones in Zimbabwe offers a number of pluses. First all the revenue and the profits from mining to supply of cut stones will be made in Zimbabwe. This boosts the value of the exports, allows the Minister of Finance to collect more revenue and have a far better idea of just how much is being mined and processed in the first place, and creates jobs.
We assume that the arrival of the equipment in the next few months is the start. Skills have to be built up, and these are more than just knowing how to use the equipment. Zimbabwean cutters have to be taught where to cut and what sort of cut stones to create.
This is one main reason why cutting and polishing was a near monopoly of a few centres for so long, and why Israel was among the first to break the old closed system as skilled people decided to escape anti-semitism in Europe.
So we hope that the deal over the technology is matched with deals on training, not just to use the machines but also how to use those machines to cut the stones to create the highest value.
We imagine we might have to have imported master cutters directing the process and doing the training for several years while we create our own master cutters. There is nothing wrong with this; a few salaries will be a trivial cost against the extra revenue the country and its diamond industry can earn.
The move towards processing locally also means that Zimbabwe is finally moving away from the somewhat haphazard way the diamond industry has grown. No one really expected that this country could be the number one producer; it has been rather sudden, less than a decade since the first indications came through that this was possible.
We have, to a certain extent, been muddling through with the authorities battling to get a grip on the industry and ensuring that it develops in ways that benefit all of us. Even now fresh allegations of possible corrupt practices are being investigated.
The one thing that we have been lacking are “diamond people”, experts in all facets of the business. We can contrast this with say tobacco, where if you are a Zimbabwean expert you are also an international expert.
If a particular customer wants tobacco of a particular type, quality and colour, processed in a particular way then Zimbabwean farmers, processors and merchants know how to fill that order. We now need the same for diamonds.
It will take time to grow a group of top diamond experts. On the mining side we must by now be well on our way to creating this group; this needs to be matched with those who know what markets want, who can contribute in international campaigns to create markets, and who know how to turn what the miners produce into what the markets desire.
At one time this was all done, for a price, by De Beers. That near monopoly has ended and all producers have the opportunity to do it themselves, although some co-operation in marketing and training by the big Southern African producers could well be important.
Southern Africa, with its ancient rocks, is easily the largest source of diamonds in the world and between us we can be like the Middle East is in oil.
We are at the beginning of an exciting journey. We now need to plan where we want to go and ensure that we go that way. The delivery of this new technology is a big step, but it is a first step.