Thursday, August 12, 2010

(HERALD) Chiadzwa diamonds sold

Chiadzwa diamonds sold
By Farirai Machivenyika and Martin Kadzere

Zimbabwe yesterday sold the first batch of 900 000 carats of diamonds from Chiadzwa, realising US$72 million after meeting minimum requirements under the Kimberley Process Certification Scheme. Buyers at the auction on Tuesday came from India, Lebanon, the US, Israel and Russia.

However, Zimbabwe still requires KP certification for more than three million carats extracted by Canadile Miners and Mbada Diamonds. The companies are in joint ventures with the Zim-babwe Mining Development Corporation at the diamond fields.

Zimbabwe was granted the right to export the mineral from Chiadzwa at the World Diamond Council summit held last month in St Petersburg, Russia.

The auction, however, covered the gems produced between May 28, 2010 and September 1 this year. Speaking at the certification ceremony in Harare yesterday, Acting President John Nkomo said the Government, as a founding member, remained committed to the KP.

"Since the middle of last year, the country went through several stages in its quest to satisfy the KP minimum requirements. As Government, we remai-ned committed to the scheme as a founding participant to the KP.

"Government clearly understands the purpose of the institution and embraces its ideals. However, it is critical that a non-partisan approach is followed in the execution of these ideals to ensure efficiency, effectiveness and fairness in the KP," he said.

The Acting President said Zimbabwe supported transparency in diamond trade.

"The Government further demonstrated this thrust by constituting an inter-Ministerial Taskforce on Marange to spearhead development of the area and to champion compliance with KP minimum standards.

"Today’s ceremony is a symbol of our great resolve as a nation to succeed. Although it took us long to be where we are today, we will not tire to do the right things in the eyes of our people and the international community."

The mining sector, the Acting President said, was poised to play a pivotal role in Zimbabwe’s economic turnaround.

"The sector is forecast to enjoy rapid growth this year, which should see it surpass last year’s achievements.

"Anticipated increases in platinum and gold production and the other sub-sectors of chrome, nickel and coal are expected to spur growth in the mining sector.

"Such growth requires an injection of new investment, particularly foreign direct investment for working capital and long-term capital for exploration and mining development."

He said Government had taken measures to create an enabling environment for investors in the mining sector and urged Zimbabweans to enter into partnerships with foreign investors that were mutually beneficial.

"Diamonds are our heritage, a heritage, which we should bequeath to our children and future generations. These diamonds should benefit the people of Zimbabwe and it is our shared and collective responsibility as Zimbabweans to guard this resource jealously," said Acting President Nkomo.

Speaking at the same occasion, Prime Minister Morgan Tsvangirai said Government was working on modalities to ensure that Zimbabweans benefited from diamond trade.

"I am pleased to note that the Minister of Finance, in consultation with the Minister of Mines and Mining Development and other stakeholders, is working on a framework of determining how the revenues from this supervised sale are applied for the benefit of the generality of the people of Zimbabwe through the fiscus," he said.

PM Tsvangirai called on mining companies to plough back into the development of local communities.

Mines and Mining Development Minister Obert Mpofu castigated countries and organisations that opposed Zimbabwe’s right to export its diamonds from Marange.

"When there was chaos (in Marange) Zimbabwe was not an issue (at KP) . . . Some of the people making noise benefited from that chaos.

"We have heard noises from people calling themselves NGOs in the US and Canada and some of them are here not to witness certification, but faults. We welcome them because we have nothing to hide," he said.

Head of delegation of the visiting Association of Diamond Producer Countries and South African Mineral Resources Minister Susan Shabangu welcomed the diamond certification.

KP Monitor Mr Abbey Chikane said he had strived to ensure that Zimbabwe qualified for certification.

"Throughout my visits, I have spent a lot of time on how Zimbabwe can qualify in the KPCS.

"I am pleased to announce that Zimbabwe as a country and Canadile and Mbada as companies have met full KPCS minimum requirements," he said.

According to sources, Government would get 10 percent from the sales as royalties, the Minerals Marketing Corporation of Zimbabwe gets 0,875 percent while ZMDC gets 2,5 percent proceeds from the sales for future explorations.

ZMDC and the joint venture partners would get 2,5 and 5 percent each in management fees.

The remaining 79,125 percent would cover production costs based on an agreed formula while the balance would go to Government through the ZMDC and its investment partners.

Zimbabwe was granted the right to sale diamonds from Marange despite intense opposition from Western countries especially the US, Canada and Australia.

The countries that have been on a crusade against Zimbabwe and have imposed illegal sanctions on the country wanted diamonds from Marange classified under "conflict diamonds" despite lack of evidence to that effect.

However, diamond officials from leading countries in the industry like India and Russia opposed these moves.

Several cabinet ministers and senior officials from local diamond-producing companies and various captains of industry attended the ceremony.

l See comment on Page 6.

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