In a step aimed at ending corruption and arbitrariness in diamond mining in the country, India has decided to delink mining and exploration rights. Till now, the company which earned the mining rights for a specific piece of land, also had the right to gain profits from exploration of that mine. Now, the government will pay for exploration, and put the findings through an open bidding process. The proceeds from the bidding will go towards the welfare of the poor, Union Minister Piyush Goyal said. He was talking at the International Diamond Conference which was attended by all major diamond companies of the world. India is one of the leading countries in the diamond business. In fact, 15 of every 16 diamonds in the world are cut here, industry experts said. About 70% of the world’s supply of diamonds, in terms of value, originates in India.
Meanwhile, Prime Minister Narendra Modi has appealed to the Indian jewellery industry to increase its share in the global hand-made jewellery market. “India has many famous icons, sculptures and statues dating back over 2,000 years. Many of them are shown wearing jewellery. These works of art have captivated people across the world. Have we documented these? Have we thought of promoting jewellery based on these works of art? Friends, we live in an era where cloth retailers change people’s preferences. Even hair dressers change hair style fashions of their clients. We live in an era where diamonds are used in spectacles, watches and pens. Can’t our jewellers, with their skills, strengths and heritage, create and change global tastes and fashions?” the Prime Minister asked while addressing the gathering of leading diamond industrialists, during a live video conferencing facility.
Lauding the industry, he said this was one of India’s success stories. “From just $28 million in 1966-67, exports reached $1 billion in 1982-83 and $2 billion in 1987-88. It crossed $10 billion in 2003-04, $20 billion in 2007-08 and is now nearly $40 billion.”
PM Modi said that the Special Notified Zone which was started at the Bharat Diamond Bourse in November 2015, has been instrumental in increasing access to global rough diamonds. “Earlier, only 80-90 big merchants used to get access to global rough diamonds by travelling to Belgium, Africa and Israel. Now, about 3,000 small and medium merchants have this privilege through the new Special Notified Zone. My intention is to make India, which is already the cutting and polishing hub, into an International Diamond Trading Hub.”
Union Minister Piyush Goyal addressed the gathering, and said that the government now intended to bring more transparency in the system of diamond mining and exploration. “India plans to change rules of the game through exploration. The moment we give exploration or mining licence, the government gets the ability to choose, to give it to a person of choice. There is possibility of corruption there, because it involves giving rights to a person of interest for quite a few years. Our effort is to eliminate corruption, discretion. Usually, the exploration and mining company then charges a hefty cost for its findings. It asserts that it can charge that premium because of the risk it takes in mining. But the natural wealth should be used for the benefit of the poor,” he said.
“We will now have a separate contract for exploration. The government will pay the cost for it. This will provide an incentive if anything valuable is found. All the data that is extracted from exploration will be put in public domain. We will then have a bidding process for everything that has been found. This way, everybody will have a chance to be a part of it. This will help us exploit the potential of value of each mining exploit. This will then be used for the benefit of the poor,” he said. The minister urged Indian companies to participate in the exploration process, and asked why only a handful of foreign companies should participate in it. He said that India had two operating mines in Madhya Pradesh, and the government expected private companies to participate in exploring them.
Mincing no words about the unethical practices observed by the diamond industry in the country, Goyal said it was time for the industry to take corrective steps to regain the trust they have lost. “There is need to generate more goodwill for the diamond industry. After the demonetisation exercise, I hope you will not be wanting,” he said.
The government has also promised support for setting up a separate Gems and Jewellery University in Maharashtra. Industry leaders said it was a much-needed step for specialised management in the industry.
Russell Mehta, vice chairman of the Gem and Jewellery Export Promotion Council, said that the current challenge faced by the industry was also that of synthetic diamonds. “Volatility is the new normal. Synthetics will share the market with natural diamonds,” he said, adding: “We dominate the world. 15 of the world’s 16 diamonds are cut here. But the challenge now is of Swachh Bharat. There is need for a clean diamond trade. The trade must have basic hygiene. There is negative perception about this trade among people. That has to be wiped off by our own acts. The old ways of doing business will no longer work. We will need swachh diamonds now.”
Walter K Chidakwa, Zimbabwe’s Minsiter of Mines and Mining Development, said: “We can’t stop synthetic diamonds. But let there be fairness in the market. Let the market decide if it wants to buy synthetic diamonds. I refuse to market synthetic diamonds as natural diamonds.”