Venezuelan state heavy industry holding company CVG, the Israeli government, Venezuela's Bolívar state government and the Venezuelan-Israeli chamber of commerce (CEVI) have signed a letter of intent to create a diamond exchange.
The exchange, which will operate in Bolívar state, is due to generate annual revenues of some US$200mn.
Meanwhile Venezuela's tax and customs authority (Seniat) is working to create the exchange's duty-free zone, CEVI president Carlos Sequera Yépez told BNamericas.
The project will require US$20mn in investment, which will come from Israeli investors promoting the project along with the Israeli government, Sequera said.
The exchange site has been already purchased and is right behind the Ciudad Bolívar airport. Studies on security systems, construction and earth movement work is complete, he said.
The exchange will allow merchants to buy and sell diamonds and includes workshops to shape and place diamonds.
Work to develop the exchange entails holding roundtable sessions to invite miners, diamond cutting schools and the region's authorities to participate. Seniat and the government will also participate to develop an operation scheme.
The world's largest diamond exchange is in the Israeli city of Ramat-Gan city, which in 2004 handled turnover of nearly US$9.9bn, according to CEVI. Turnover at the New York exchange reaches US$2bn/y while Antwerp in Belgium hits US$1bn/y.
Apart from financing, Israel could contribute with project expertise, consulting and training, CEVI said.
A diamond exchange in Venezuela would add value to stones and develop the diamond industry. The exchange would also help regulate activity in the region, avoid the siphoning of diamonds from the region, establish competitive prices and create jobs, according to CVG.
Venezuela officially produces from 100,000-200,000 carats a year of diamonds, but could turn out 800,000 to 1 million carats if the sector were regulated, a CVG executive told BNamericas previously.