Pruning of diamond miners welcome

By Mathew Nyaungwa

Authorities in Zimbabwe are considering cutting the number of companies mining diamonds in Marange to one from the current seven so as to improve accountability and transparency.

The state media reported recently that Harare is currently auditing the seven companies as a first step to rationalising operations.

The Zimbabwe Mining Development Corporation (ZMDC) wholly owns Marange Resources and it also has stakes in Mbada Diamonds, Anjin Investments, Diamond Mining Company, Jinan, Kusena and Gye Nyame.

“Firstly, we will look at a particular company and demand information on how many diamonds have been taken from the country and secondly how much they have been sold for,” finance minister Patrick Chinamasa was quoted as saying.

“We need to know that as a country. What we want to do is to cut down on these other companies and identify a company which will work in conjunction with the Government so that we do not have these small companies working on our diamonds. This will take time. It is not an event, but a process.”

Mining operations in Marange had been shrouded in secrecy amid concerns that revenue generated from the trading of the gems was being plundered.

Global Witness claimed that about $2 billion in Marange diamond revenues had been unaccounted for since 2008.

Former finance minister Tendai Biti constantly berated miners in Marange for poor remittance to the treasury. He was forced to cut Zimbabwe’s budget in 2012 to $3.4 billion from $4 billion after receiving $41 million from $600 million that he expected from diamond sales.

However, his colleagues from President Robert Mugabe’s ZANU PF party in the then government of national unity (GNU) as well as the miners in Marange denied the effusive ex-minister’s allegations.

“It is either he (Biti) is untruthful, incompetent or illiterate. He made the blunder and miscalculated. He must be man enough and admit that he made a mistake,” said Anjin board member Munyaradzi Machacha in 2012.

“He must tell the nation where the money we gave to Treasury is.”

Interestingly, when the GNU came to an end last year, the new government of President Mugabe, summoned diamond mining companies operating in Marange to explain why revenues had been low.

This was after reports, which cited Chinamasa as saying that the treasury had not received proceeds from diamond revenue in the nine months to September 2013. The government had targeted to receive $40 million from diamond sales during this period.

Zanu-PF also resolved last December to streamline the number of diamond miners in Marange.

“[We resolved] to rationalise the number of players in the diamond mining sector to promote efficiency and transparency,” the party said at the end of its 14th National People’s Conference.

President Mugabe had prior to the conference told his party leaders that the inclusion of several players in the diamond mining sector had resulted in increased incidences of smuggling and government would act decisively on this.

“Diamonds, we would want to centralise that. If you look at Botswana, even in South Africa, Angola, Namibia it’s not free for all. It’s only government and partners who produce diamonds,” he said.

Some reports suggested that President Mugabe wanted only three diamond mining companies to operate in Marange. He also at the time took a swipe at ZMDC for not effectively carrying out its mandate.

Zimbabwe’s new mines minister Walter Chidhakwa has already fired the boards of the Zimbabwe Mining Development Corporation (ZMDC), Minerals Marketing Corporation of Zimbabwe (MMCZ) and Marange Resources.

The dissolution of the boards came just days after Chidhakwa toured diamond mining operations in Marange, where he was told by miners that alluvial deposits had run out.

Unnamed sources cited by NewsDay said the dissolution of the board was linked to the disappearance of 1,3 million carats of diamonds following the disbandment of Canadile Miners, then a joint venture company between Core Mining and Mineral Resources and government through ZMDC.

It also probably had to do with revelations that the former ZMDC board chairperson Godwills Masimirembwa was involved in a $6 million bribery scam.

There is no doubt that as the government of the day, ZANU PF is expected to deliver on the grandiose promises it made to the electorates if it seriously wanted to retain power in 2018.

The reality, for now, is that the government’s purse is somewhat empty and revenue from diamond mining remains truncated, as was the case during the chaotic days of GNU.

There is no Biti in government to attack anymore for ‘lying’ about diamond funds.

One of their own is now in charge of the national purse and he is seeing the blues, hence it is not surprising at all that the whip is all of sudden being cracked on errant miners.

This is all being done to ensure much revenue is gathered from the gems to contribute towards national development, as the signs of renewed economic misery are getting more and more visible.

For example, hundreds of companies have shut down since the time President Mugabe and his party won the elections.

The country is also experiencing a liquidity crunch and local companies are now resorting to importing goods from South Africa and repackage them locally for resale.

However, it is facetious (for now) to say that the ruling party has no clue how to pull the economy from the current mess, the country is in.

Yes, they once presided over a comatose economy but that verdict can only be passed two and half years down the line and indeed at the end of their five year term as information minister Jonathan Moyo argued recently.

Dear reader, the pruning of useless diamond miners is long overdue and the company that will be chosen to setup a joint venture with ZMDC should be one with a sound history of diamond mining not some Mickey Mouse, artisanal miner masquerading as a big timer.

Imagine, what Zimbabwe can do if it partners with a company like ALROSA of Russia, which is said to be the world leader today in diamond exploration and mining. The Russians own a third of Catoca mine in Angola, which is one the largest kimberlite mines in the world.

Last year, ALROSA signed an agreement with the Angolan state-owned diamond miner Endiama to establish a joint venture. They have already submitted applications for license areas, which they identified in the process of thematic works.

After obtaining new licenses the JV mining company will begin the search for primary diamond deposits. The Russians also signed a joint venture agreement in August 2013 with Botswana Diamonds to find new diamond bearing kimberlites in Orapa.

Their technology is being used by several companies in Africa conducting diamond exploration and these have proved to be successful.

So, just like its neighbours, Zimbabwe stands to gain immensely if it engages a reputable ahead of freebooters scavenging for the country’s diamonds to line up their fat but deep pockets much to the chagrin of the majority stuck in muddy waters of poverty.

Therefore, thumbs up to the planned move of thinning players in Marange.

Mathew Nyaungwa can be contacted at [email protected]