State clears up diamond mess

Source: State clears up diamond mess | The Sunday Mail May 22, 2016

Lincoln Towindo
Zimbabwe consolidated diamond mining operations in Chiadzwa procedurally and will not dump this model as it has worked effectively in other countries, a Cabinet minister has said.
Authorities are now fine-tuning the arrangement, while also ensuring no further leakages take place after firms that used to mine at the fields failed to account for billions of US dollars in a decade of operations.
An independent auditor will soon be appointed to investigate the alleged losses.
Government’s moves to improve diamond mining come as Kimberley Process Certification Scheme intercessional meetings open in the United Arab Emirates tomorrow, with the West angling to place Zimbabwe on the agenda for “consolidating operations unprocedurally”.
Western government’s preferred outcome would see diamonds from Chiadzwa subjected to sanctions, something the anti-Zimbabwe establishment elements have been pushing for years. The KPCS comprises governments, industry and civil society, and pedominantly aims to stem the flow of conflict diamonds.
Mines and Mining Development Minister Walter Chidhakwa told The Sunday Mail that his presentation in Dubai would focus on the legality of Zimbabwe’s mining consolidation.
He said Botswana’s Debswana — a joint venture between the government and De Beers — had worked profitably for years.
Minister Chidhakwa said: “It is really a straightforward issue. We intend to explain to plenary that the structure in Zimbabwe has changed and that the companies no longer had valid licences. Naturally, in terms of the law, they could not operate without special grants.
“We will explain that we wanted only one company to operate mainly for the sake of transparency and accountability. Further, we will assure them that we have the mining field under control through the Zimbabwe Consolidated Diamond Company, which will operate in line with KP standards.”
He also said: “If, indeed, we are put on the agenda, we will simply explain our position and its legality in terms of local laws. Some people do not seem to understand the situation we were in and the one we are trying to create.
“But it should be understood that no one can dictate to us a system that is ultra vires our laws. We have an operational legal framework in Zimbabwe and no other country can force us to work outside that system.”
For years, Mbada Diamonds, Anjin, Marange Resources, Diamond Mining Company, Kusena Diamonds, Jinan and Gye Nyame operated in Chiadzwa under 50-50 joint ventures with the State’s Zimbabwe Mining Development Corporation.
However, Government says it did not get much from the ventures and to set up the Zimbabwe Consolidated Diamond Company to rectify this.
Zimbabwe is primed for rich pickings through the ZCDC in which Government is the majority shareholder, with the country expected to sell at least 500 000 carats monthly at an average value of US$25 million.
This will be a significant increase from the US$157,2 million that Chiadzwa miners remitted to Treasury in 2015.
Government projects earnings of between US$25 billion and US$30 billion over the next 10 years.
KPCS figures show that companies at the Chiadzwa diamond fields managed US$2,5 billion since 2006, and Minister Chidhakwa said this would be investigated.
“I have discussed (the matter) with Finance Minister Patrick Chinamasa, and we agreed that he would authorise the Comptroller and Auditor-General to carry out the audit in terms of the law. Since the Comptroller and Auditor-General’s Office does not have capacity to carry out an audit of that nature, the department will engage independent auditors.”