Surat diamantaires happy over KPCS decision

SURAT: Diamantaires in the world's biggest diamond cutting and polishing centre in Surat have heaved a sigh of relief following an announcement by Namibia's mines minister Bernhard Esau, currently chairing the Kimberley Process Certification Scheme (KPCS), that Zimbabwe will not be suspended from the international diamond regulatory body.
If the small, medium and big diamond polishing units have been able to withstand the dwindling profit margins then it is mainly due to imports of rough diamonds from Zimbabwe, which are cheaper by 25 per cent than other parts of the world.Most diamond units have been using roughs imported from Zimbabwe, industry say experts.
Most of the major diamond mining companies including De Beers, Alrosa, BHPBilliton, etc. had reduced their diamond production following the credit crisis in the market. In May 2009 with some liquidity in the market, rough prices started to show signs of improvement and increased by almost 30 per cent.
Surat imports an estimated Rs 35,000 crore worth of rough diamonds per annum. While the Diamond Trading Company (DTC) sightholders have direct access to the roughs, the non-sightholders import rough diamonds from Dubai and Antwerp.
Sources said the KPCS delegation that was in Zimbabwe a few months ago had recommended that the country be suspended from the KP following widespread abuse and killings in Chiadzwa diamond field. However, in an effort to convince the KPCS to issue a fresh report, absolving the country of any wrongdoings, the regulatory body's head was allowed to tour the still militarised diamond fields in Zimbabwe last week and he was convinced that there was no need to ban Zimbabwe from the KP.
A leading diamond manufacturer, who caters to the domestic market, said, "We are happy that Zimbabwe will not be suspended from the KP. We have been able to sustain ourselves in the market only due to the Zimbabwe diamonds."
In a recent development, the Surat Diamond Association (SDA) approached the Russian consulate in India for easy availability of rough diamonds. The SDA urged the Russian consulate to arrange for direct supply of roughs so that the manufacturers do not have to pay extra premiums to diamond dealers in Antwerp and Dubai.