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This article participates on the following special index pages:
Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles
Diamonds are whose best friends
Movement
for Democratic Change (MDC)
July
20, 2012
The MDC welcomes the long overdue action taken by the Minister of
Finance to force greater transparency and accountability in the
operations of those companies mining diamonds
in the Marange area of Zimbabwe.
Diamonds were
first discovered there in 2006 and the State immediately took steps
to wrest control of the find from the company African Consolidated
Resources Limited. In the chaos that ensued up to 40 000 informal
miners' extracted diamonds and in the subsequent rush, buyers
from the whole world descended on the City of Mutare to buy diamonds.
In 2008, recognizing
the size and value of the discovery, the State moved to take control
and in the process hundreds of miners were killed and maimed by
the security forces in an exercise they called "No Return".
Since then a number of secretive, politically aligned companies
have taken up claims on the site and now assert that they are the
largest diamond mines in the world.
Despite assertions
by the Minister of Mines that production could reach $2 billion
dollars in 2012 and agreements that they would contribute $600 million
towards the revenues of the State, the actual flow of funds to the
Treasury has been miniscule and as a direct result the budget revenue
targets are not being achieved and a harsh revision of the budget
has had to be introduced by the Minister of Finance.
The facts are
that the companies now operating at Chiadzwa are operating 9 crushing
and sorting plants and are capable to processing 6 million tonnes
of diamond bearing aggregates a year. Experts estimate that the
companies are retrieving between 1 and 7 carats per tonne and that
gross revenues to the companies are between $2 and $5 billion a
year.
Signed agreements
with the State make provision for at least half of this revenue
to be paid to the State. This compares to the Botswana joint venture
with de Beers Limited which pays to the Botswana government an average
of 73 per cent of gross revenue from raw diamond sales.
To correct this
state of affairs, the Minister of Finance has now stated that he
will force the companies concerned to accept full State supervision
and control of all raw diamond production, grading and sales. The
Zimbabwe Revenue Authority will then ensure that payments are made
to the Treasury before the balance of proceeds is paid to the mine
operators.
The MDC welcomes
this move and believes that this single measure has the potential
to transform the State finances and make urgent expenditure a possibility.
However, the question will remain, where are the billions of dollars
that have been extracted from the Marange diamond fields since the
State assumed control in 2008?
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