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  • Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles

  • New Zimbabwe diamond policy emerges as Biti reads riot act
    Change Zimbabwe
    July 14, 2010

    A rational diamond mining policy entailing nationalising the resource is beginning to emerge from the inclusive government, with Minister of Finance, Tendai Biti, demanding accountability for at least US$30 million which the Treasury should have received from Marange diamonds that have been sold, but which neither the Treasury nor the revenue authority ZIMRA know anything about.

    Chikane's report showed that Marange produced $25 million, MMCZ mopped up $5 million worth and the "Police/MMD" handed over 200 000 worth of diamonds but in stock there was only $155 thousand worth or Marange diamonds, $6 000 worth of MMCZ diamonds. So where did the money go?

    In a section of his 2010 Mid-Year Fiscal Policy Review called Leveraging Mineral Resources and presented to Parliament today, Biti repeated what previous Zanu (PF) governments said, that the extractive industries in Zimbabwe were producing but the revenue was not finding its way to the people.

    Although in previous statements Zanu (PF) ministers and Reserve Bank Governor Gideon Gono referred to "leakages" - meaning that minerals were being exported illegally or smuggled, as far back as 2006, nothing was done about it.

    Gallant efforts by the likes of Farayi Maguwu's ngo to expose the same issues have been criminalised and he is still on bail.

    The Zanu (PF) officials were either overwhelmed by the corruption or were also steeped in it, but Biti has now proposed putting an end to it, with potential to bring billions of dollars a year into the government's coffers which should translate to accelerated development.

    He said communities had not been able to see anything developmental out of the resources extracted from their habitats, and a new "business unusual" approach was required, with more openness and transparency over the exploitation of the country's natural resource endowments.

    There was need for the crafting of an Exploration Registration and Extraction Mining Policy, creating a database and a Register of all known minerals in Zimbabwe and codified in amendments to the Mining Act.

    He also proposed a "use your claim or lose it" policy putting an end to the hoarding of claims and continuous renewal of claims which are not being mined, and a sectoral approach to begin looking at all the available avenues of adding value to the country's mineral production, another issue which successive Zanu (PF) mines ministers have talked about at conferences, but which never took off.

    The current legal structure codified in Zimbabwe's Mining law that the State can only look to corporate tax and royalties from the mining sector is unsustainable and should be revisited, said Biti.

    And, as minerals were finite national resources, he also proposed developing a formula for putting away proceeds for future generations to benefit from - by setting up an Inter-Generational Fund to deposit some proceeds from the mining sector.

    But Biti saved his thunder for the diamonds on which he said the rule of law and constitutionalism must be respected; that Zimbabwe must commit to the Kimberly Process Certification Scheme (KPCS); and the Government's returns on its shareholding in the Zimbabwe Mining Development Corporation (ZMDC)'s operations (dividends from its joint ventures in Marange) should be transferred immediately to the Treasury following any diamond sales.

    He also said there was broad consensus in Government that there should be a new Diamond Act that requires that all alluvial diamond mining be conducted by and through the State.

    "This will be in recognition that it will not be "business as usual" at Marange and that the State will not allow issuance of multiple mining licences that facilitate proliferation of small diamond mining operations.

    "The proposed Diamond Act will also deal with the issue of compensation and relocation of displaced communities in Marange, including provision of the necessary social infrastructure.

    IFurthermore, this Act will provide for the establishment of a Diamond Fund, which will be part of the overall National Mining Fund."

    Zimbabwe Congress of Trade Unions chairman Lovemore Matombo has previously said no single individual or company should be allowed to exploit the diamonds, estimated to be the largest deposits found this century.

    "If this diamond saga is to bring peace to the people of Zimbabwe, then let the mine be nationalised," Matombo said and proposed that if there is any one entity going to be a private owner, it must be prepared to pay half of the proceeds to the state.

    The successful Botswana model is a 50/51 percent partnership between the state and the giant De Beers company - with the state bringing in the mining rights as its equity and De Beers bringing in the technology and management, together forming a private company, Debswana, which provides more than 50 percent of the government's revenue as we proposed back in 2006!

    On past diamond sales of which he has previously said the government has not received the revenue, Biti said Zimbabwe had sold at least US$30 million worth of diamonds from Marange, which Treasury and ZIMRA have no record or knowledge of.

    It is important that the revenue be accounted for transparently in terms of the law to avoid the current opaqueness and suspicions over the quality and actual value of resources being generated from the current diamond mining operations in Marange, he said.

    According to the KPCS Monitor, Abbey Chikane's report, which the Zimbabwean government is relying on to claim that it diamonds are clean, Chikane give the following details of the sales:

    In the short to medium term, the "revival and regeneration" can be underpinned by income generated from the extractive industries, said Biti, adding that, up to now the government's approach has been lackadaisical and indifferent.

    "Clearly, if we see through the framework advocated in this Review, we will be somewhere towards attaining the Developmental State called for in STERP."

    Gallant efforts by the media and non-governmental organisations to bring attention to these issues, which have now been acknowledged by the Finance Minister, have been denounced by Zanu (PF) as determined efforts to "personalize, criminalize and tribalize the mining of diamonds at Chiadzwa."

    A gallant activist who brought these issues to the fore, Farai Maguwu, has been criminalised and ill- treated in custody over unnecessary charges of passing on false information, just because Zanu (PF) operators in the diamond fields were being exposed. He is still on bail.

    Edward Chindori-Chininga - his committee with constitution oversight powers on the mining sector was denied permission to visit Chiadzwa

    Zanu (PF) spokesman, Rugare Gumbo issued a statement to the Zimbabwean Reporter in which he said the role of the Minister of Mines and Mining Development Obert Mpofu's laudable efforts to represent Zimbabwe's strategic and economic interests in diamonds had been portrayed in a most negative manner.

    "Any right thinking person would know that a Cabinet Minister represents the national interest within terms of reference provided by Cabinet. Even Cabinet deliberations on Chiadzwa diamonds have been consistently misrepresented in an effort to sustain this hopeless and disgraceful vilification of a patriotic son of the soil..." he said of Mpofu.

    This is despite that Mpofu has been responsible for barring a Parliamentary Committee which has constitutional oversight on mining from investigating what is going on at Chiadzwa and how claims were allocated and re-allocated, and are continuing to be mined in contravention of a High Court order.

    He also said Zanu (PF) considers the Chiadzwa diamonds as a strategic national asset and "one of the achievements of our national land reclamation programme" (sic). "As a Party we also reject the disgraceful efforts to shift goal posts in the case of Zimbabwe alone when it comes to the licencing and marketing of its diamonds.

    "First, the capacity of this country to provide security and management skills is known all over the world. Murowa and River Ranch diamond mines have already been licenced, while Chiadzwa diamonds and others not in the hands of Anglo-Saxon companies are being denied a licence as they are labeled blood diamonds.

    "How can the same country be so good at providing security and good management in one region and fail completely to do the same in another corner?

    "Second, efforts are also being made to redefine the meaning of blood diamonds in order to criminalize only those Zimbabwean diamonds which are not in Anglo-Saxon hands.

    "Third, for the first time in the history of the KPC, the view of sponsored conference observers such as Global Witness and Partnership Africa-Canada have been elevated to a level above those of substantive market players," said Gumbo.

    In truth however Mpofu had no policy and was feigning a lack of capacity to rationalise the diamond production. His statement to Parliament revealed his lack of capacity when he said that it was impossible to find a clean diamond dealer to partner with.

    In reality he was trying to hide the true nature of his relationship with the mining companies, the quantity of the diamonds being mined, and the extent of diamonds deposits from the public gaze in a effort to confine it to the two companies that he had illegally appointed.

    Gumbo tried to reduce the issue to one of capacity to provide security, yet the issues are wider, including the need to ensure that the country's people as a whole benefit from such a valuable resource, in such abundance and needing to be nurtured sustainably.

    Gumbo's statement was also factually inaccurate as Global Witness and Partnership Africa-Canada are not sponsored conference observers of the Kimberly Process, but integral members forming the ngo contingent of KP which looks after the rights that the his so called "substantive players" tend to ignore when they are chasing after profits.

    We applaud Honorable Biti's stance on the mining of diamonds and we pray that he does not tire in implementing this obviously onerous and honourable programme that he has set for himself, and which should result in great benefits to the present and future generations of Zimbabweans.

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