HomeBusiness DigestDiamond revenues tumble

Diamond revenues tumble

CONSOLIDATION of Zimbabwe’s diamond producers has proved to be a costly blunder amid indications government is getting as little as US$900 000 in gross revenues from the sale of the precious stones from a peak of US$50 million a month when the seven companies that operated in Marange were independent.

Staff Writer.

This has seen government getting as little as US$200 000 in taxes and royalties, making it difficult for the state to fund its unsustainable monthly wage bill which averages about US$200 million and gobbles in excess of 85% of the annual cash budget.

Figures from the Zimbabwe National Statistics Agency (Zimstat) show that Zimbabwe exported diamonds worth US$1,6 billion in the four years between 2010 and 2013, averaging about US$33,3 million per month before plummeting to a measly US$900 000 in June 2016 after Mines minister Walter Chidhakwa consolidated all diamond companies in a move that is widely contested in the courts.

Another diamond tender held this week is expected to see about 80 000 carats going under the hammer. Efforts to get official information from the Minerals Marketing Corporation of Zimbabwe (MMCZ) and government’s partner in the Zimbabwe Diamond Tender Facility, First Element Diamond Services (First Element), were fruitless at the time of going to print.

Low diamond revenues have raised eyebrows and come as First Element’s exit from Botswana is shrouded in secrecy amid allegations the company was booted out of the southern African country for undervaluing and smuggling diamonds.

Controversy around First Element puts into sharp focus Zimbabwe’s due diligence processes as well as its commitment towards a transparent and accountable diamond mining and marketing system after President Robert Mugabe earlier this year claimed as much as US$15 billion could have been lost through diamond leakages.

First Element recently offered to hand over its deep boiling plant to the Ministry of Mines free of charge amid growing scrutiny into the company’s operations in the country.

Insiders view the move to relinquish the facility, previously valued at US$1 million, as a desperate attempt by First Element to offer a sweetener and thaw relations with government while silencing criticism on the company’s alleged conflict of interest and other irregularities. The value of the facility has come down to US$500 000.

First Element is also a major diamond buyer and is involved in cutting and polishing of the precious stones.

Documents seen by businessdigest show First Element offered to sell the deep boiling plant, located at the ZDTF on the first floor of the Minerals Marketing Corporation of Zimbabwe (MMCZ), to the government’s minerals marketing arm for US$500 000 early 2015.

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