Zimbabwe to Use Diamonds to Secure Loan: Letter to Miners

via Zimbabwe to Use Diamonds to Secure Loan: Letter to Miners – Bloomberg By Godfrey Marawanyika May 22, 2014

Diamond miners in Zimbabwe have been told to sell their gems through the central bank, which will use the stones to secure a government loan, according to a letter written to them by the country’s mines secretary.

In the letter to miners, the secretary Francis Gudyanga, instructs that producers “prepare parcels of all your currently produced diamonds which must be sorted and evaluated with the involvement of the Minerals Marketing Corp. of Zimbabwe,” a state company, and payment will be made soon after.

The stones will be kept by the central bank and used to “securitize a government loan,” Gudyanga said in the letter. The letter, obtained by Bloomberg, was sent to miners April 28 and came into effect April 30. Calls to Gudyanga’s phone today did not connect.

Zimbabwe’s economic growth is slowing as consumer spending slumps and the government struggles to secure adequate funds to meet costs such as paying state workers. The World Bank in April forecast growth at 3 percent this year compared with an initial government estimate of 6.1 percent.

The southern African nation’s deputy mines minister Fred Moyo said May 7 that Zimbabwe may use mineral exports, including gold and diamonds, to underwrite loans from China.

Zimbabwe’s diamond mining companies include Rio Tinto Group (RIO), which operates the Murowa mine, Econendra, a Russian miner, digs the gems in the eastern Chimanimani district while Mbada Diamonds (Pvt) Ltd., Anjin Investments Ltd., the Diamond Mining Co. and Jinan Mining (Pvt) Ltd. work the eastern Marange diamond fields in ventures with the MMCZ.

Munyaradzi Machacha, a director at Anjin, declined to comment and said his company is still to be paid the $5 million it’s owed after a gem sale in Dubai run by the Zimbabwean government.

Zebra Kasete, managing director at Rio’s Murowa and George Manyaya, a spokesman for Mbada, were said to be in a meeting when Bloomberg sought comment.

To contact the reporter on this story: Godfrey Marawanyika in Harare at gmarawanyika@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net; Nasreen Seria at nseria@bloomberg.net Dylan Griffiths

 

COMMENTS

WORDPRESS: 15
  • comment-avatar
    Roving Ambassador 7 years ago

    Its Gonomics part two. Will this instill confidence? A big no, ZANU is shooting its self in the foot again.
    They are so much under pressure they do not know which way to turn.
    So this is what the stupid polit something meeting was all about.
    Brace yourself for some more stupid ideas .
    I am just waiting to see how they are going to reign in the mining companies. Remember the Junta has been syphoning the mining bounty.
    Talk about closing the gate when the horse has bolted.

  • comment-avatar

    Anyone who thinks that they will get paid from the reserve bank needs to see a doctor,

  • comment-avatar
    Chaka 7 years ago

    They will never be paid that’s for sure

  • comment-avatar
    John Thomas 7 years ago

    Now the thieves are stealing from each other

  • comment-avatar

    If you are still waiting to be paid $5M how can you expect payment soon after surrendering “parcels of diamonds”

    I foresee more clandestine planes hovering above the mines airlifting diamonds God knows where to.

  • comment-avatar

    The last option is to put zim on advert for sale

  • comment-avatar

    Diamonds – tiny volume, very high value. Not easily controlled by a letter from Ministry of Mines. Especially in a country where corruption has been approved at the highest levels.

  • comment-avatar

    The circus goes on!

  • comment-avatar
    Mike Nyathi 7 years ago

    If they had money to pay for the diamonds they wouldn’t need the loan. Well, at least they are stealing from their fellow crooks in Marange – but it won’t be long before they are printing money and looting the foreign currency accounts of the few functioning businesses that remain. Welcome back to 2008.

  • comment-avatar
    Mukanya 7 years ago

    ZIMBABWE FOR SALE- ANY TAKERS please contact The Minerals Marketing Corp. Zim. with your bids. Closing date (indefinite)

  • comment-avatar
    ivor payne 7 years ago

    After the Reserve Bank directed every bank to hand all foreign currency to them, the courts ruled that these banks could not recover their money because there was no law authorising the Reserve Bank to issue that directive. So what law authorises this directive from the Reserve Bank…or is the RBZ a law unto itself?

  • comment-avatar
    Petal 7 years ago

    why not serve a letter on those who have Looted? just remembered its one of them doing this

  • comment-avatar
    Straight Shooter 7 years ago

    How are they going to securitise the loans with diamond parcels when they dont even know how many carats are produced from those mines?

    They have too many players in that industry, that is why they can not control what is happening. Get rid of all those blood suckers, hire De Beers as the only player and follow the Botswana formulae!!

  • comment-avatar
    Petal 7 years ago

    wishful thinking. Remember Diamonds are a girls best friend – Diamonds must be Disgraces’ best friend!!