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Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles
Marange diamonds: ZANU-PF's best friend
Chiketo, Think Africa Press
February 04, 2013
Concern is growing in
Zimbabwe over missing diamond revenues, which many believe to be
lining the pockets of ZANU-PF officials.
Following last week's
admission that the government's public account contains only $217,
Zimbabwe's Finance Minister Tendai Biti has stressed "government
finances are in paralysis". He warned that the "economy
needs every resource it can get".
Yet several sources have
suggested accessing its resources may be more difficult than anticipated.
At Zimbabwe's Diamond Conference in Victoria Falls last November,
former South African president Thabo Mbeki voiced concerns that
Zimbabwe's diamond industry had fallen under the control of
a "predatory elite".
Mbeki was alluding to
a widespread belief that the Marange diamond fields are under the
clandestine control of groups of ZANU-PF officials - using their
access to state power to enrich themselves against the interests
of the people. Presumably acting in collusion with the mining companies,
many fear ZANU-PF could even be using these illicit funds to undermine
democratic processes - particularly concerning with presidential
elections scheduled for later this year.
revenues are staggering. Geologists estimate that the 80,000 hectares
of diamond fields at Marange could hold between two and seven billion
carats of raw diamonds and the fields are currently contributing
as much as 25% of global diamond output.
economist and MP for Movement for Democratic Change (MDC-T), claims
that in 2012 alone more than $4 billion worth in diamonds has been
from Marange. However, his MDC-T colleague and a deputy in the
Ministry of Mines, Gift Chimanikire, told Voice of America that
while he was unsure of the source of Cross's figures they
Nevertheless, the extent
to which this is translating into revenue for Zimbabwe's state
coffers is another matter. A report published last month by Partnership
Africa Canada (PAC) claims Zimbabwe may have already lost up to
$2 billion in diamond mining revenues over the past three years.
Many are suspicious of ZANU-PF officials' expenditure and
surmise it can only be emanating from underhand deals at Marange.
Understandably, the director
of the Centre for Natural Resources Governance (CNRG), Farai Maguwu,
has already expressed fears that errant diamond revenue could be
used by ZANU-PF to subvert the country's democratic processes
in upcoming elections.
Indeed, some fear the
rot is already very deep. Earlier last year, Tendai Biti, Zimbabwe's
Finance Minister and Secretary General of the MDC-T, suggested Marange
revenues may be funding a "parallel government".
Douglas Mwonzora, a spokesperson
for the MDC, blamed the dire state of the budget on diamond revenue
going to ZANU-PF cronies, explaining "the most important thing
is that money from diamonds is not being remitted to government
coffers". Last July Biti drew attention to poor revenue inflows
from the Marange diamond fields. Of the $600 million expected from
diamond sales revenues in 2012, only $41.6 million had been received
by halfway through the year. Consequently, the 2012 national budget
was cut from $4 billion to $3.4 billion.
Some believe that ZANU-PF
officials are being helped by international companies operating
in Marange who are in cahoots with them. The diamond fields belong
to the Zimbabwe Mining Development Corporation (ZMDC), which fully
owns Marange Resources Ltd. However, ZMDC also holds 50-50 joint
ventures with three other mining firms - the Diamond Mining
Corporation (DMC), Mbada Diamonds and Anjin Investments (a joint
venture with a Chinese construction firm).
Each of these companies
has conspicuous connections to the ZANU-PF structure. Mbada Diamonds,
for instance, is chaired by Zimbabwe's former Air Vice-Marshall
Robert Mhlanga - rumoured to have been Mugabe's personal
pilot. Anjin's board includes the Permanent Secretary at the
Ministry of Defence, two commissioners of the Zimbabwe Republic
Police, and current and former officers of the Zimbabwe Defence
Last May, Finance Minister
Biti accused Anjin of having remitted nothing to the Treasury despite
being the largest diamond producer on the Marange diamond fields.
However, the Chinese-owned diamond producer claim they remitted
$30 million and said they were being made a scapegoat for the government's
over-estimation of diamond revenues, denouncing Biti as being "untruthful,
incompetent or illiterate" for allegedly miscalculating what
Cross, Biti: diamond geezers in dispute
Obert Mpofu, Zimbabwe's
Mines Minister, has also joined in the reaction against Biti. At
a Mining, Engineering and Transport conference in Bulawayo last
July, Mpofu maintained that the mining industry was contributing
enough and called Biti "a liar". Yet Mpofu has been
accused of benefiting from the Marange diamond fields himself, and
is famously rumoured to own half of the resort town of Victoria
Falls - expensive property alleged to have been bought with
In fact, Mpofu has been
accused of being a liar himself. MDC-T MP Eddie Cross has accused
Mpofu of misleading parliament when he claimed Zimbabwe had only
realised $200 million from the sale of raw diamonds over the last
five years. During this time, total payments to the Treasury had
been over $174 million. Mpofu's suggestion that the mining
firms had paid out most of the money earned from the sale of diamonds
was, according to Cross, patently false.
Cross also suggests that
ZANU-PF granted the Marange fields to compliant companies to ensure
the party would continue to gain funding after it lost control of
the Treasury and the National Social Security Authority (NSSA) with
the establishment of the unity government.
If these allegations
are correct, there is little hope of transparency around Marange
so long as the current actors retain their licences. This conclusion
forms the basis of the MDC-T's support for the nationalisation
of the fields - something on which Cross has claimed Zimbabwe
"can expect action shortly".
Tendai Biti strongly
advocates legislative action to shift the current status quo. Claiming
that due process was not followed in awarding the concession, Biti
has been pushing a Diamond Control Revenue Bill, introduced in 2011.
The bill seeks to void
all existing claims to concessions at Marange, while nationalising
the fields under the joint supervision of both the mining and finance
Naturally, ZANU-PF denies
the party is lining its own pockets at Marange. Tafadzwa Musarara,
director at Resources Exploitation Watch (an NGO partisan to ZANU-PF),
has condemned accusations of opaqueness in the mining industry.
He insists that mining firms are protected by law and, like any
private company do not have to make public their balance sheets.
He added that the Treasury should be more realistic in its revenue
expectations, arguing that firms were still recuperating their infrastructural
Another ZANU-PF member
- Edward Chininga, former Minister of Mines and current chairman
for the Parliamentary Committee on Mines and Energy - recently
blamed the current international sanctions on Zimbabwe for the limited
revenue flow. Chininga has argued that sanctions are "creating
loopholes for illegal trade and fiscal leakages" - a
muted confirmation, at least, of shadowy diamond deals in the sector.
All four firms operating
at Marange were targeted by US sanctions, with ZMDC a primary target
of the financial restrictions. However, Chininga has called for
the sanctions to be lifted since the four companies are now fully
compliant with the Kimberly Process Certification Scheme (KPCS).
He claims all the sanctions are currently achieving is to "force
companies to circumvent normal export channels", perhaps explaining
why their balance sheets remain so opaque.
Whether or not the accusations
against ZANU-PF's grounded in any truth, many are becoming
concerned by the way in which Zimbabwe appears to be haemorrhaging
revenues from its mining industries. Claims against controversial
figures within ZANU-PF, such as Obert Mpofu, need to be further
investigated, while the entire industry needs more accountability.
Whether MDC-T plans to nationalise the diamond fields are realistic
remains to be seen, but at such a time of empty coffers, Marange's
massive revenues are hardly something the government can afford
to be missing out on.
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