Mpofu defiant on diamond revenues

The ZMRT is a government initiative towards consolidating the provisions of the Medium Term Plan (MTP), which state that Zimbabwe must by 2015 adopt the Extractive Industry Transparency Initiative (EITI).

The EITI is an international best practice system in the extractive as well as other industries, aimed at improving transparency, accountability and responsibility in the exploitation of natural resources. It requires full and public disclosure of mining sector revenues and receipts by government.

Mpofu, who was speaking at  a conference on transparency in the mining sector organised by Centre for Public Accountability, said his ministry would not subscribe to such an initiative  while  the  country was   still  under sanctions.

He said full disclosure, especially on diamond mining activities, would be detrimental to the sector, particularly given that there were countries which had Zimbabwe under sanctions.

“We   cannot   speak of   full disclosure while we have these sanctions. If we  were  doing   that we could have been getting  nothing   from the  mining  sector, which  is  literally running  this economy, as  those who  slapped us with sanctions have made it clear to include on their sanctions  list those who trade with us in diamonds,” Mpofu said. 

Mpofu’s remarks come after Finance Minister Tendai Biti’s statement that the deficit in revenue collection was because of poor contribution from diamond firms. Diamond revenue’s contribution to the fiscus in the  first  quarter of this year amounted to  US$30,5 million against  a target of US$122,5 million.

Biti last month blasted Chinese company, Anjin Investments, for not contributing anything to the fiscus and questioned the firm’s shareholding structure. Anjin is the biggest diamond mining   company in the country but its contribution to government revenue raises questions on transparency.

Mpofu however came to the defence of the mining companies, insisting they were remitting their contributions as obliged, hence the problem was with treasury. “I am Minister of Mines and Mining Development and my responsibility has nothing to do with revenue collection,” he said.

“The responsibility of the line ministry is not to complain, but to do the work.”  Zimbabwe’s mineral exports for 2011 surged to US$2,45 billion from US$1,6 billion in 2010, driven by  platinum, gold and diamond production.

Mpofu said diamond production would rise this year beyond the Medium-Term Plan target of 12,1 million carats, following the green light from the Kimberley Process Certification System.

Commenting on mining fees, Mpofu said the hike in the fees was a positive development as treasury was getting US$10 million a month. He said complaints by big mining companies on the fees were unjustified as these companies had the capacity of paying even more.

Mpofu however said his ministry was in dialogue with the Chamber of Mines to review mining fees for small scale  miners.

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