ZANU PF faces ‘test’ over fate of diamond profits

via ZANU PF faces ‘test’ over fate of diamond profits | SW Radio Africa  by Alex Bell on Wednesday, February 26, 2014

The ZANU PF government is facing a major test over the fate of diamond sale profits, with millions of dollars being realised from recent sales.

A second auction of diamonds from the controversial Chiadzwa alluvial fields that got underway this month in Antwerp, Belgium, saw almost a million carats of diamonds being sold for US$70 million. Six mining companies from the Marange mines contributed to the diamonds that were sold in Belgium over a 10 day period.

In a statement ZANU PF Minister of Mines Walter Chidhakwa said US$10.5 million of this revenue goes to the Treasury from royalties.

The auction follows the decision by the European Union (EU) to remove the Zimbabwe Mining Development Corporation (ZMDC) from its list of targeted restrictive measures. This decision was made last year, soon after the disputed elections that saw ZANU PF resume power, and has received serious criticism for giving those polls credibility.

The decision was followed shortly afterwards by an initial auction of Zim diamonds, which saw about US$10 million being earned. US$1.3 million of that sale was reportedly received by the Treasury.

But there are no signs yet of where and how these diamond profits will be used. A lack of transparency is a key issue that civil society organisations have emphasised is preventing diamond sales from making a difference to the lives of ordinary Zimbabweans.

Top ZANU PF officials have for years been the major beneficiaries of the murky nature of the Chiadzwa diamond fields, where millions of dollars in potential government revenue has been ‘lost’. Watchdog groups have estimated that as much as US$2 billion in diamond profits have gone ‘missing’ since 2008.The top mining firms in the area have also remitted little or nothing to the state coffers, despite the government being a major shareholder in the companies.

Jeffrey Smith, the Africa advocacy officer at the Robert F. Kennedy Center for Justice and Human Rights, said diamonds could help turn Zimbabwe around, but there is a “lack of political will.”

“It is a clear cut case of a tragic failure of leadership. There’s massive potential for the revenue from the diamond fields to do a lot of good. But a lack of transparency has compounded the massive corruption scandal that has already rocked the mining industry and speaks a lot of the wider corruption problem in Zimbabwe,” Smith told SW Radio Africa.

Smith agreed that the ZANU PF government now faces a serious test over the fate of the diamond profits, especially now that the gems are being sold on the international market. He urged the government to embrace the World Bank’s principles on ‘best-practice’ in the extractive sector, which aims to improve transparency and accountability in natural resource governance.

“The principles will allow the mining companies and the government to do a number of things, like disclose revenue, and also allow Zimbabweans to know how much the government is generating from the sector,” Smith said.

Meanwhile, there continues to be condemnation of the European sales, with ongoing reports of abuses suffered by diamond panners at the Chiadzwa mines, and the poverty faced by Marange villages relocated as a result of the mining activities.

A recent report by the Centre for Research and Development (CRD) details incidents of assaults, dog attacks and prolonged detentions by security officials working for the mining firms, against people accused of illegal diamond panning. 13 pages of the report details these attacks, which all happened over the last year, with accompanying pictures showing the extent of the injuries people have sustained.