GOVERNMENT’S consolidation of diamond mines operating in Marange and President Robert Robert Mugabe’s shock claim that Treasury could have lost US$15 billion in diamond proceeds will come under the spotlight when the world’s top producers of the precious stones meet in Dubai later this month, informed sources have said.
The Kimberley Process (KP), a joint governments, industry and civil society initiative to stem the flow of conflict diamonds — rough diamonds used by rebel movements to finance wars against legitimate governments — will convene intercessional meetings in Dubai between May 23 and 26 where Zimbabwe will be on the agenda.
“A lot of developments have happened in the sector which include consolidation which was opposed by players, and leakages. The Dubai meeting is expected to explore some of these issues affecting the local diamond industry,” a senior official at a diamond mine said.
In February Mines minister Walter Chidhakwa ordered all diamond mines to cease operations after announcing that their operating licences had lapsed, paving way for the merger of the diamond companies.
Chidhakwa’s directive followed the diamond miners’ rejection of the initial amalgamation plan, which gave birth to Zimbabwe Consolidated Diamond Company (ZCDC) and left government owning a non-dilutable 50% stake, with the balance shared among the existing miners. Chidhakwa on Monday said the new company was now a wholly government-owned entity mandated to explore, mine, recover and sell diamonds in Zimbabwe.
Following concerns over the opaqueness of the industry and possible revenue leakages, Finance minister Patrick Chinamasa and Reserve Bank of Zimbabwe governor John Mangudya promised the International Monetary Fund to embark on far-reaching reforms in the capital-intensive sector.
Government authorities say the consolidation of mining operations will increase transparency and accountability in the diamond sector, as well as its contribution to fiscal resources.
“The message that authorities want to send to the KP is that government intends to fully account for production, sales, turnover, exports and profits, thus ensuring transparency and accountability in the sector and that proceeds from diamond mining are accrued to the budget. To demonstrate this commitment to transparency, they will regularly publish the audited accounts of ZCDC,” the official added.