RSS 2.0 FeedJuly 2010 Vol 18, Featured Articles, Mining and Industry Indaba
US$30 million diamond cash missing
HARARE – Zimbabwe cannot account for US$30 million earned from exports of its controversial Marange diamonds, Finance Minister Tendai Biti said on Wednesday, adding that future alluvial diamond mining would have to be done by or through the government to curb leakages.
HARARE – Zimbabwe cannot account for US$30 million earned from exports of its controversial Marange diamonds, Finance Minister Tendai Biti said on Wednesday, adding that future alluvial diamond mining would have to be done by or through the government to curb leakages.
Presenting his mid-term budget statement to Parliament, Biti said a monitor sent by world diamond industry regulator, the Kimberley Process, to probe operations at the notorious Marange mines unearthed the diamond exports which neither Treasury nor the Zimbabwe Revenue Authority (ZIMRA) were aware of.
“(The monitor said) Zimbabwe has sold at least US$30 million worth of diamonds from Marange, which Treasury and ZIMRA have no record or knowledge of," Biti told Parliament.
Biti said there was broad consensus within the Harare coalition government that there should be a new Diamond Act requiring that mining of alluvial deposits such as those found at Marange should be done by and through the state.
The proposed new law will also require that all net income from diamond mining is immediately transferred to Treasury and should not be treated as normal revenue as is currently the case.
To enhance transparency the planned new Act will also ban issuance of multiple mining licences that facilitate proliferation of small diamond mining operations running obscure operations.
"There is broad consensus in government that there should be a new Diamond Act that requires that all alluvial diamond mining be conducted by and through the state,” Biti said.
He added: "It is important that any revenue from Marange is accounted for transparently in terms of the law, with the Consolidated Revenue Fund receiving its dues in full under parliamentary oversight in terms of the Constitution.”
Unable to win significant financial support from rich Western countries and multi-lateral institutions, cash-strapped Zimbabwe is pinning hopes on revenue from the vast Marange deposits to drive economic recovery after a decade of acute recession.
Biti said the economy will grow by 5.4 percent this year, repeating projections made by President Robert Mugabe 24 hours earlier when he opened Parliament on Tuesday.
The new figure is lower than the 7.7 percent the government had initially predicted GDP (Gross Domestic Product) to grow by in 2010, although it remains higher than the 2.2 percent expansion predicted for the southern African economy this year by the International Monetary Fund (IMF).
The Finance Minister said inflation that showed signs of resurgence to hit 6.1 percent on an annualised basis in May, up from 4.8 percent the previous month, was projected to drop to 4.5 percent by year-end.
"Our original (inflation) target was 5.1 percent. Despite the resurgence of inflation in June 2010, we still hope that we will achieve an annualised inflation of 4.5 percent by the end of the year," Biti said.
Regarded as the second most powerful man in Prime Minister Morgan Tsvangirai’s MDC party, Biti urged the fractious coalition to show unity of purpose or the fragile economic recovery would stall.
Zimbabwe’s economy registered its first growth in a decade last year after the coalition government implemented measures, including the adoption of multiple currencies that doused hyperinflation.
However the IMF maintains that economic recovery remains fragile because of the government’s heavy dependence on imports at a time the country does not have access to balance-of-payments support.
The fund and other multi-lateral lenders have refused to provide fresh loans until Harare clears outstanding debts, while rich Western nations are also reluctant to fund the administration, insisting it first steps up the pace of democratic reforms, do more to uphold human rights and the rule of law.
Income from the country’s huge diamond deposits at Marange and other mines could go a long way to help government programmes to rebuild the economy.
But Zimbabwe has failed to tap into the riches after the KP blocked sale of the Marange stones following reports of gross human rights violations and smuggling by soldiers and police sent to guard the deposits.
The KP is meeting today in St Petersburg, Russia to discuss the Marange diamonds after it failed last month to reach consensus on recommendations by its Zimbabwe monitor, Abbey Chikane, to lift the ban on the gemstones
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