Harare: Zimbabwe’s ruling party Zanu-PF is reportedly planning to set up a diamond cutting and polishing centre in the eastern town of Mutare.

The Daily News quoted the party’s Manicaland acting provincial chairperson Samuel Undenge as saying that a holding company was in the process of being registered. “As a party, we have decided to have a diamond cutting and polishing centre,” Undenge said.

“As Zanu PF, we are forming a company which we are in the process of registering…I believe as Zanu PF, we should generate our own income. We are already in the process of identifying suitable sites for the two projects with the help of our town clerk.”

This development follows reports earlier this month that demand of rough diamonds by local cutters was still very low despite efforts by government to promote the sector.

It was reported early last year that about 70 of the diamond cutting and polishing firms that opened when diamond production started in the Marange area had been closed due to a prohibitively expensive licensing policy.

Zimbabwe demanded a $100 000 diamond cutting and polishing licensing fee, which was renewed annually. An additional 15 percent sales tax was also levied on any company that buys diamonds from the producing companies.

However, Harare, cancelled royalties on locally cut gems last year to encourage diamond cutters and polishers to operate in Zimbabwe. President Robert Mugabe revealed in November 2012 that the country only beneficiated 0.1 percent of diamonds produced in 2011.