RBZ takes over diamond operations

Source: RBZ takes over diamond operations – DailyNews Live

BUSINESS WRITER      23 May 2017

HARARE – The Reserve Bank of Zimbabwe (RBZ) has taken over the production
of diamonds in the country in an effort to promote transparency in the
sector.

This comes as the Zimbabwe Consolidated Diamond Company (ZCDC), which was
formed last year after government expelled all diamond miners in Marange,
has failed to deliver.

Official government data shows that ZCDC is only producing 95 000 to 100
000 carats a month against a target of approximately of between 300 000 to
350 000 carats.

All else being equal, the country should be getting about $30 million per
month from diamonds but this is not the case.

Finance minister Patrick Chinamasa said the State-owned diamond firm is
now compelled to remit all proceedings to fiscus.

“We have capitalised ZCDC to the tune of $80 million and we are getting
weekly reports of production and it has new management.

“We have also agreed on a new arrangement, we have told them, ZCDC, that
since we are now capitalising you, the diamonds are ours,” he told
delegates at the Chamber of Mines conference in Victoria Falls last week.

“So the new arrangement is that every output of diamond will come to the
fiscus through the Reserve Bank and this will ensure that we get maximum
benefit from the proceeds of the diamonds,” Chinamasa added.

This was after the central bank seconded its former exchange control
director, Morris Mpofu, to lead ZCDC.

According to Mpofu, who began his tenure as ZCDC chief executive in March
2017, the mining company is also receiving technical assistance from the
apex bank.

“Since last year when ZCDC was formed, we have been selling diamonds on
rushed basis to raise working capital, but this was stopped in March 2017
but RBZ has provided us with a working capital facility which allows us to
continue producing diamonds

“ZCDC has also adopted a stock accumulation policy from RBZ and government
which allows us to build and accumulate diamond stocks which we will
tender at the right time, to the right bidder and the right price,” Mpofu
said recently.

Diamond revenue has remained a national  headache with very little being
realised from the auction of Zimbabwe’s gems. President Robert Mugabe last
year claimed the country had lost an estimated $15 billion to leakages in
the sector.