Parly demands return of diamond miners

Source: Parly demands return of diamond miners – DailyNews Live

BUSINESS WRITER      5 May 2017

HARARE – Zimbabwe’s Parliament has asked President Robert Mugabe’s
government to open up the diamond sector to private players, a development
which might give hope to gem miners who were forcibly kicked out by Mines
ministry last year.

This comes as the government, which shut down private diamond mining firms
early last year to “plug leakages and enforce transparency” in the sector,
has come under massive pressure from various stakeholders for driving out
foreign investment due to bad policies.

Zimbabwe was the eighth largest diamond producer in the world with 4,7
million carats in 2014, according to industry group Kimberly Process.

However, production plummeted to 924 388 carats last year.

Parliamentary portfolio committee on Mines and Energy chairperson Daniel
Shumba said the State-owned Zimbabwe Consolidated Diamond Company (ZCDC)
has failed in its mandate to deliver at least six million diamond carats
per month, hence the need for more players.

“The ministry of Mines should allow independent players to participate in
diamond production in various parts of the country, including the Marange
concessions, by December 2017,” he said in a report tabled in Parliament
on Tuesday.

Shumba said this decision was reached after realising that ZCDC will
struggle to scout for investors due to low investor confidence, after the
ouster of the joint venture partners.

The Zanu PF legislator also indicated that a policy should be developed,
before year end, to integrate artisanal and small-scale diamond miners who
are operate illegally in Marange.

“The ministry of Mines needs to copy best international practices,
especially from countries in West Africa and come up with a policy
position in order to integrate artisanal and small-scale miners in the
mining of alluvial diamonds,” he added.

The latest report also criticised Mines minister Walter Chidakwa for
stifling growth in the diamond industry through his haste decision to
order diamond mining firms to stop operations and seizing their equipment
and claims in February last year.

“Section 72 (2) of the Constitution states that “every person has the
right, …to acquire, hold, occupy, use, transfer, hypothecate, lease or
disposes of all forms of property, either individually or in association
with others.

“The grounds for dispossessing the mining companies of their concessions
are weak and indefensible,” he said.

“These were joint venture agreements and if the lease had expired, surely
Zimbabwe Mining Development Corporation (ZMDC) could have easily reacted
to rectify the anomaly.

“It appears this was just a weak excuse to get rid of the joint venture
partners. It cannot be denied that the consolidation process put a dent on
investor confidence into the mining sector,” he added.

Shumba noted that it was important that property rights are respected so
that it does not affect investment opportunities for the entire mining
industry.

“When the Committee visited Marange it saw immovable property such as
offices, airstrip, employee houses, watch towers, machinery which was lost
inadvertently by the joint partners and will now be inherited by ZCDC
without paying any compensation,” he said.

The latest development comes as analysts have blamed the closure of
diamond mining companies for the current cash shortages.

“Between 2008 and 2013, formal and informal diamond mining allowed a boost
in money supply and the shutting down of operations in the recent months
due to the depletion of alluvial diamonds has negatively affected
liquidity,” Politician and economic commentator Energy Mutodi said.

The famed academic also indicated that there were no reserves that
government kept from the diamond proceeds that the country can rely on.

“Under normal circumstances, a patriotic government could have created a
sovereign wealth fund to cater for our current cash-strapped situation.

However, much of the diamond money was looted, prejudicing the country of
more than $15 billion dollars,” he said.

Zimbabwe’s diamond industry has been tainted by reports of rights abuses
including the killing and torture of unauthorised miners in Marange.

Reports of abuses led to a ban of gem exports from Marange between 2009
and 2011.

In recent years, the government has pinned its hopes on the diamond
industry to shore up the moribund economy but was forced to revise its
projections downwards as earnings fell short.

Diamonds were discovered in Marange in 2006, drawing in thousands of
small-time miners hoping to get rich quickly.

The army cleared the area in late 2008, when Human Rights Watch says more
than 200 people were killed.