US$300m feared lost in diamonds scam

Dumisani Muleya



A MASSIVE diamond racket involving millions of hard currency is feared after gemstones bought from Marange by the government-run Minerals Marketing Corpo

ration of Zimbabwe (MMCZ) could not be fully accounted for.


Mining sources said yesterday there were investigations instituted by the government, which involved the central bank, to find out the truth about diamonds bought and sold by the MMCZ, the sole selling and marketing agent for minerals produced in Zimbabwe.


The country has 44 types of minerals which include gold, platinum, emeralds and diamonds.


Zimbabwe is said to have lost US$300 million due to looting of diamonds in Marange.


The MMCZ is a parastatal under the Ministry of Mines.


Sources said the MMCZ recently bought and sold for US$1,7 million, a parcel of 36 146 carats of diamonds from Marange. The parcel contained 32 314 carats of industrial and near-gem rough stones and 3 833 carats of gem quality diamonds.


The gem quality diamonds fetched US$1 523 502,10 near-gem stones, which were 1 192,86 carats got US$23 857,20 and industrial diamonds, which were 31 128,14 carats, cost US$155 640,70.


This means the diamonds were sold at an average of US$47 per carat, a value too low compared to current market trends since about 10 years ago. In 1997 a parcel of 50 carats of diamonds cost US$27 230 yielding US$544,60 per carat. A parcel of four carats was selling for US$1 569,68 a carat.


The current market value for a rough diamond of 9,75 carats is US$3 000 per carat. The value for a cut diamond of 3,65 carats is US$9 000 a carat. The value of diamonds depends on carat, colour, clarity and cuttability.


Sources said diamond experts consulted by government on the issue had queried the deal, saying the diamonds were “grossly undervalued”.


It is said Reserve Bank authorities were worried the country could have lost millions in foreign currency in the process.


An independent diamond expert said yesterday the MMCZ transaction raised more questions than answers. He said government should intensify inquiries into the issue to ascertain if there was fraud involved in the diamond sales.


“The above figures and values show anyone who has an idea of how diamonds are produced and sold that there was gross undervaluation of the parcels,” the source said. “This means a deal involving millions of US dollars could have been at stake during the buying and selling of these diamonds. Surely how can more than 36 000 carats of diamonds, which include nearly 4 000 carats of gem quality, cost a mere US$1,7 million?”


Fears of a diamond scam came as it emerged Zimbabwe could have lost nearly US$300 million to dealers and smugglers since the state-sponsored invasion of British-listed Africa Consolidated Resources (ACR) plc’s Marange diamond claims. The diamond rush and subsequent looting has attracted thousands of panners from all corners of the country, including dealers from the region.


Repeated efforts to get comments from MMCZ CEO Onesimo Moyo and public relations manager Pretty Murwisi were unsuccessful. The MMCZ telephones went unanswered.


ACR is locked in a legal battle with the MMCZ over the diamond claims in Marange. The British firm, which has local shareholders, has written to President Robert Mugabe asking him to intervene to stop the pillaging of the diamonds.


Mugabe has since appointed a cabinet committee to deal with the issue.


ACR has also written to Mines minister Amos Midzi, Moyo and also alerted the Kimberly Process Certification System, which regulates the diamond trade, about the Marange diamonds situation.


Midzi was also not available for comment yesterday.


The Marange diamond claims initially belonged to Kimberlitic Searches, a subsidiary of global diamond giant, the De Beers Group of South Africa, whose EPO expired in March.


However, the MMCZ recently seized the claims through a special grant, which ACR argues violates the Precious Stones Trade Act that prohibits any licensed dealers like the MMCZ from engaging in mining activities.

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