COMMENT - Wikileaks shows the cluelessness of Stratfor's understanding of the Zimbabwean situation, as well as De Beers working in Zimbabwe against US policy. They admit sanctioning entire industries and many companies, in order to shape what comes after Mugabe - shape the Zimbabwean political scene. Not very democratic. According to Mark Schroeder of Stratfor:
To me this sanction is not about US businesses there (not much), but about
sanctions on Zimbabwean elite involved in the diamonds there to shape what
succeeds Mugabe.
In other words, they think they are using sanctions to shape the Zimbabwean political scene. - MrK
Re: [Africa] ZIMBABWE/US/MINING - US blacklists Zimbabwean diamond companies
Released on 2013-02-26 00:00 GMT
Email-ID 5042006
Date 2011-12-13 20:49:49
From mark.schroeder@stratfor.com
To africa@stratfor.com
Re: [Africa] ZIMBABWE/US/MINING - US blacklists Zimbabwean diamond
companies
Maranga is good to make cash for some ZANU-PF elite. It is seen as under the control of the securocrats faction that involved the defense minister. The Mujurus, on the other hand, were seen as behind the River Ranch diamond area in the south, close to the border with South Africa.
To me this sanction is not about US businesses there (not much), but about sanctions on Zimbabwean elite involved in the diamonds there to shape what succeeds Mugabe. Mnangagwa and a host of other securocrats are facing this sanction. So the calculation among the securocrats has to be, if they go forward with Mnangagwa as their candidate, he is already under US-led international sanction, and the country will not be normalized. The US is likely to increase their rhetoric if Mnangagwa goes on to succeed Mugabe -- it's one thing to let Mugabe die out (the international community can do little about Mugabe), but they will not work with another securocrat.
Mnangagwa succeeding Mugabe will likely trigger renewed focus on sanctions and ZANU-PF might not have what it takes to withstand another 5 years of that.
So that's why they might need to focus on finding a successor who is not
under sanction but who can provide them security and financial guarantees,
in return for yielding power and not ending up in The Hague.
On 12/13/11 12:14 PM, Adelaide Schwartz wrote:
How important are the Marange/Chiadzwa mines for a ZANU-PF campaign? Is
this the principal operation from which Mugabe and co. receive cash for
political buy offs?
If this is a political move by the US as you raise below then I can't
help but think it is poorly calculated. What US businesses are still
there after repeated sanctions? I agree that Mnangawa seems to be in the
top position for a "passed down win."
imo, real pull is US getting De Beers operators out (I don't think De
Beers has re-entered on their own but I would need to confirm since SA
changed the Kimb Process a few months ago)
On 12/13/11 9:11 AM, Mark Schroeder wrote:
here's an interesting development following the conclusion of the
ZANU-PF congress, though the date of the move is not clear. It would
mean that beneficiaries of Marange diamonds will not get US
cooperation-- and rather, will face sanction. It is believed that the
Mnangagwa faction (the securocrats) benefits from the Marange
diamonds. Back to our conversation on the future Zimbabwean election,
it would thus be very difficult for Mnangagwa to secure the election,
as he will face considerable international sanction/pressure against
him. Remember that the rival ZANU-PF faction led by Joyce Mujuru is
effectively knocked out of the running following the death by
mysterious fire of her husband, Solomon Mujuru.
On the other hand, the MDC is still in a weak position and no way
ZANU-PF will just give up and let them win. It thus opens the door for
some compromise accommodation, though surely with some hard bargaining
to be done.
On 12/12/11 11:48 AM, Marc Lanthemann wrote:
US blacklists Zimbabwean diamond companies
Text of report by South African privately-owned, established daily
newspaper The Star on 12 December
[Report by Peta Thornycroft, Independent Foreign Service: "US
Blacklists Zim Diamonds"]
HARARE: The US has blacklisted several diamond companies that are
extracting rough stones from controversial diamond fields in eastern
Zimbabwe.
The Office of Foreign Assets Control has blacklisted companies owned
by a state mining company and a private limited company which has
been financially backed by a South African investor.
Human rights organizations and investigators were infuriated when
the Kimberley Process Certification Scheme recently cleared the
diamonds for export from Zimbabwe.
But it will now become impossible for any US citizen -and the EU is
likely to follow -to buy any stones from or via any of the
companies, all based in Zimbabwe.
The stones sold in Zimbabwe are mostly bought by buyers in Asia that
don't have any trade restrictions.
Mining licences in the diamond fields have been issued to Mbar
Diamonds (Mbada), a Zimbabwean company backed by a Mauritian company
and funded by South African scrap dealer New Reclamation, in which
Old Mutual has a 5.6 per cent share.
South African David Kassel is the CEO of New Reclamation, and has
been involved closely in helping set up the diamond mine run by
Mbada.
The companies placed on the blacklist are: Marange Resources
(Private) Limited (aka Block Wood Mining, aka Marange Resources, aka
Mmarange Resources Ltd) MMCZ Building, 90 Mutare Road, Harare,
Zimbabwe (Box 4101, Harare); Zimbabwe Mbada Diamonds (Private)
Limited (aka CONDURANGA, aka Mbada, aka Mbada Diamond Mining, aka
Mbada Diamonds), New Office Park, Block C, Sam Levy's Village,
Borrowdale, Harare.
Source: The Star, Johannesburg, in English 12 Dec 11 p 5
BBC Mon AF1 AFEausaf 121211 jo
Labels: DEBEERS, DIAMONDS, KIMBERLEY PROCESS, MARANGE DIAMOND FIELDS, SANCTIONS
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This report shows how De Beers is paying billions to it's international shareholders, money that is taken directly out of the South African economy. In fact, if they ever want to make the 'we bring jobs' argument, the same article also shows that De Beers spends 23 times more on it's international shareholders than on it's South African employees. This is the dispensation that Apartheid was intended to protect, and that is continuing under the ANC.
De Beers's Report To Society 2008 (
cached)
De Beers Payments (billion USD) to:
International Shareholders: $6.2
South African Workers: $0.269
South African Taxman: $1.4
Highlights
De Beers paid US$6.2 billion (2007: US$6.2 billion) to stakeholders around the world
Payments to partners, joint ventures and suppliers amounted to US$4.8 billion (2007: US$4.9 billion).
About US$3.2 billion of this was paid for diamonds and services in Africa (2007: US$3.6 billion)
Payments to employees in Africa amounted to US$269 million (2007: US$332 million)
De Beers paid US$1.4 billion in taxes and royalties to governments; 87.9%
of this (US$1.2 billion) was paid to governments in Africa
A total of US$1.1 billion was allocated to preferential procurement in southern Africa and Canada (2007: US$1.0 billion)
More than US$1.1 billion in rough diamonds was supplied to Sightholders for manufacture in southern Africa (2007: US$1.0 billion)
Economics
If the global economic crisis has underlined the extent to which the diamond industry is key to the prosperity of our producer countries, it has also highlighted the importance of recent efforts to leverage diamond revenues as a catalyst for building strong diversified post-mining economies in these countries.
The deployment of natural resources wealth as a platform for developing diversified economies in Africa requires firstly an effective model for the creation and distribution of natural resource wealth and secondly an effective model for translating this wealth into a robust economic, social and political capital base. The remarkable contribution of diamonds to development in countries like Botswana, Namibia and South Africa owes a great deal to the effectiveness of our partnership model in achieving the former. The year 2008, however, will be remembered across the Family of Companies for the progress made in supporting governments to achieve the latter through beneficiation programmes.
De Beers support for government-led economic diversification efforts in producer countries has focused until recently on local procurement and enterprise development initiatives. Beneficiation by contrast aims to leverage the current pipeline position of producer countries by facilitating the development and promotion of local downstream diamond sorting, cutting and polishing industries that, it is hoped, will endure well beyond the life of existing mines.
While the short-term success of these initiatives will inevitably be impacted by the current economic downturn, the long-term supply and demand fundamentals of the diamond industry bode well for the success of this process.
Labels: APARTHEID, DEBEERS, DIAMONDS, NEOCOLONIALISM
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(IOL SA) Diamond scandal hits De Beers
COMMENT - De Beers and Beny Steinmetz are colluding to steal South African diamonds, through Beny Steinmetz' Ascot Diamonds (Pty) Ltd. This is where the money is going that should be diversifying the South African economy, and eliminate poverty.
Diamond scandal hits De Beers
- Crime & Courts | IOL News
Independent Newspapers Online
Johannesburg - A senior government diamond valuator in Joburg has accused his bosses of blocking his investigation into diamond giant De Beers – and then firing him to shut him up.
Conrad Benn, the country’s first black diamond valuator, has launched an urgent application in the high court in Joburg to challenge the South African Diamond and Precious Metals Regulator’s decision to suspend him in April last year and fire him last month.
Under section 74 of the Diamond Act, De Beers is exempt from getting permission to sell its diamonds overseas – if it can show that for any of its sales exceeding R5 billion, at least 40 percent of it benefited local companies.
Benn said that
instead of a total of 11 local companies benefiting, a single off-shore company received the lion’s share.
He has submitted an affidavit from one of
De Beers’ other sight-holders, Israeli businessman Erez Daleyot, that De Beers and the Swiss-based, Israeli-owned Steinmetz Group “are working in collusion with (Levy) Rapoo (the chief executive of the diamond regulator) and stealing from the nation of South Africa”.
Rapoo asked Benn to verify the claim. Benn found in November 2013 that De Beers was not complying with the act.
“Of the 40 percent of the gross value of the production cycle to beneficiaries in South Africa, 35 percent was sold to one customer, being Ascot Diamonds (Pty) Ltd. Ascot Diamonds is part of a group of companies owned by a major worldwide diamond entrepreneur, Beny Steinmetz.
“I analysed the 35 percent sold to Ascot Diamonds and noted that it consisted of purchases of ordinary usual diamonds as well as a substantial portion of what is known as ‘exceptional stones’.
“These can be described as large diamonds of good colour and clarity and are the best of any production cycle. They are the cream of the crop,” Benn said.
He said his findings made him uncomfortable and he had made countless efforts to raise it with the relevant authorities in De Beers.
He said that instead of resolving the matter, De Beers wrote a letter to Rapoo accusing Benn of leaking confidential corporate information to a third party.
The regulator then made an “Anton Piller” application, using information given to it by De Beers, said Benn, allowing local law firm ENS Forensics to search Benn’s house and seize his laptop.
Benn was suspended before facing a disciplinary hearing chaired by advocate GJ Fourie, who, Benn told the court, had been appointed by ENS Forensics. Fourie fired him last month.
In his papers, Benn remains adamant that the motive of the regulator was to “get rid of him” instead of probing allegations of wrongdoing by De Beers.
He was the regulator’s senior manager in the valuation department.
Benn worked for De Beers in Kimberley after matriculating at St Patrick’s College in that city. He worked there until 1998 when he joined the regulator, leaving in 2003 to join a private diamond mining company.
He returned to the regulator in 2008 and was later appointed senior manager.
Benn has asked the high court to stop the disciplinary proceedings until his new counsel had familiarised himself with the allegations.
He is adamant that the process has been launched “because I had uncovered the skewed allocation of exceptional stones. The purpose of getting rid of me is to stifle my investigation,” he said.
baldwin.ndaba@inl.co.za
The Star
Labels: ANC, BENY STEINMETZ GROUP RESOURCES, CORRUPTION, DEBEERS, DIAMONDS, LEVY RAPOO
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(HERALD ZW) Latest: Antwerp pins future on Zim gems
January 28,
Sanctions also contributed towards the opaque nature of transactions in the trade of Marange diamonds
Harare – The Antwerp Diamond World Centre (AWDC) said on Tuesday it is pinning its long term survival on Zimbabwe, a key emerging producer in the world.
The Belgium based AWDC, which currently ranks as the largest diamond trading hub, is facing increasing competition from other players such as Dubai, Mumbai (India) and Tel Aviv (Israel).
AWDC said in its 2013 report that its future would be secured through cementing relations with countries such as Zimbabwe.
“This long term strategy is also designed to bear fruit over the next coming years, for example through further intensifying of the trade relationship with Zimbabwe, which will, according to experts, account for at least a quarter of world diamond production over the next decade,” AWDC said.
Zimbabwe successfully sold about 300 000 carats on the Belgium market in December last year for $10.5 million.
The country is targeting to go on the market for a second sale in February.
Selling of the diamonds through Antwerp is expected to enhance transparency in tracing revenue earnings and followed lifting of sanctions on Zimbabwean diamond mining companies by the European Union.
Russian and Canadian firms, AWDC said, would also be keys in securing its future.
To ward off competition, AWDC said it would continue to explore options to make the market the most viable as well as push for a level playing field.
AWDC said it traded goods worth $55 billion last year after recording an eight percent increase in rough diamond trade and four percent increase in polished gem sales.
The 2013 annual figures are in line with the trade analysis of the past decade, once again confirming Antwerp’s leadership as the world’s first and foremost diamond trading hub. New Ziana
Labels: ANTWERP, BELGIUM, DIAMONDS
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(HERALD ZW) Chiadzwa: Only one miner to stay….•Move to improve accountability • Seven companies face audit
January 25, 2014
Lloyd Gumbo Herald Reporter—-
Government wants only one company to mine diamonds in Chiadzwa as it takes practical steps to improve accountability and transparency in the sector. The State is already auditing the seven firms mining diamonds in the Chiadzwa fields as a first step to rationalising operations.
The audits will cover miners’ operations from the time they first set up shop. The seven companies in Chiadzwa are Mbada Diamonds, Marange Resources, Anjin Investments, Diamond Mining Company, Jinan, Kusena and Gye Nyame.
They operate as joint ventures with, or are in one instance wholly-owned by the Government through the Zimbabwe Mining Development Corporation.
Finance Minister Patrick Chinamasa told the National Assembly on Thursday: “Firstly, we will look at a particular company and demand information on how many diamonds have been taken from the country and secondly how much they have been sold for.
“We need to know that as a country. What we want to do is to cut down on these other companies and identify a company which will work in conjunction with the Government so that we do not have these small companies working on our diamonds.
“This will take time. It is not an event, but a process.”
Minister Chinamasa said his Mines and Mining Development counterpart, Walter Chidhakwa, had made it clear that he was looking into the operations of diamond mining companies and would come up with a report on his findings.
President Mugabe has already expressed concern with the below par contributions mining is making to the national economy and he wants the sector rationalised and better controlled to ensure revenues from the sector benefit the entire country more fully.
The Head of State and Government and Commander-In-Chief of the Zimbabwe Defence Forces made the remarks at the 14th Annual National People’s Conference last month in Chinhoyi.
Labels: CHIADZWA, DIAMONDS, PATRICK CHINAMASA
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(NEWZIMBABWE, BUSINESS DAY SA) Govt plans second Antwerp diamond auction
23/12/2013 00:00:00
by Business Day
ZIMBABWE is planning a second auction of its Marange diamonds in February, buoyed by the interest in and sale of more than 279,000 carats of diamonds in Antwerp, Belgium last week which raked in $10.7m.
Mines and mining development permanent secretary, Francis Gudyanga, said on Monday the initial sale of the Marange gemstones last week had "provided insight" and "tangible guidelines" that will allow the Zimbabwe government to fully optimise a second, larger tender of Marange goods.
"The next sale is scheduled for February 12 to 19 2014," Gudyanga said.
The European Union lifted sanctions on Zimbabwean diamonds in September, making way for the first-ever sale of the Marange diamonds in Antwerp, which is regarded as the world’s diamond capital.
Gudyanga pointed out that the auction of the Marange diamonds in Belgium would take place alongside regular sales organised by the State, which have traditionally attracted scores of Indian and Chinese buyers.
"The philosophy of trial tender of Marange goods was to enable government and industry stakeholders to make a thorough assessment of the benefits of selling rough diamonds on the open Antwerp market ... alongside the regular tenders that are organised in Zimbabwe."
An estimated 115 clients showed interest in the Marange diamonds during the sale, compared to the 10 to 15 companies that attend regular auctions in Zimbabwe.
The government is set to pocket $1.6m from the diamond auction in Belgium and will from January 1 seek to reduce the porousness of the diamond industry, of which the contributions to the fiscus have so far been minuscule.
Finance Minister Patrick Chinamasa, in his budget statement presented on Thursday, indicated that Zimbabwe’s treasury would increase mining royalties from 10% to 15% as the cash-strapped government tries to grow its revenue base.
Other measures set to be introduced in the diamond industry include closed-circuit TV surveillance of the entire process of production, sorting and transportation of diamonds.
Diamond production in Zimbabwe has been on the rise to 12 million carats in 2012, from 1,3-million carats recorded in 2009.
Chinamasa has earmarked the economy to grow by 6.1% next year, on strong performance from the mining and agriculture sectors.
Labels: BELGIUM, DIAMONDS, MARANGE DIAMOND FIELDS, ZIMBABWE
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(GLOBALRESEARCH) “Blood Diamonds” and Israel’s Diamond Export Industry
By Sean Clinton
Global Research, December 20, 2013
Self-regulation has failed; civil society must act to end the trade in all blood diamonds. In November, members of the Kimberley Process (KP), meeting in plenary in South Africa, squandered what was probably their last good opportunity to ban the sale of all blood diamonds, including cut and polished blood diamonds which are an important source of funding for the nuclear armed regime in Israel which stands accused of the crime of apartheid, war crimes and crimes against humanity.
The governments with a vested interest in the diamond industry, that set up and control the KP, failed to amend the definition of a “conflict diamond” which is restricted to “rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments”. All other diamonds associated with human rights violations evade the KP regulations.
The failure was well flagged in advance as key stakeholders, including South Africa which chaired the KP in 2013, had voiced opposition to reforms that would broaden the remit of the KP to embargo diamonds associated with human rights violations by government forces.
Some jewellers refuse to sell diamonds sourced in the Marange area of Zimbabwe where government forces are reported to have killed 200 miners. However, most if not all, of the worlds leading jewellers sell diamonds processed in Israel where the industry generates about $1 billion annually for the Israeli military which is guilty of grievous human rights violations in Palestine .
With the KP chair passed to China for 2014, and Angola in line for 2015, no one believes they will implement the changes necessary to ban the trade in all blood diamonds.
Corporate Posturing
Corporate social responsibility statements – the moral beacons of wannabe ethically progressive companies – amount to little more than window-dressing unless they are supported by rigorous enforcement. No amount of charitable support for a company’s favourite worthy causes can mitigate, directly or indirectly, providing a revenue stream for rogue regimes guilty of gross human rights violations.
Anglo American plc owns 85% of De Beers making it one of the worlds leading diamond companies with interests at all stages of the supply pipe from mining to retail. De Beers promote their own “Forevermark” diamonds many of which are crafted in Israel . Their promotional literature claims “Forevermark is committed to upholding the highest business, social and environmental standards and practices across its and its partners businesses”.
Anglo American’s Sustainable Development Policy stipulates that suppliers are expected to uphold “fundamental human rights and fair labour practices, in line with internationally recognised standards”. Suppliers must also
“oppose corruption, bribery, fraud…. and must not tolerate any form of money laundering or participate in other illegal incentives in business”.
Despite this, De Beers continues to sell diamonds crafted in Israel even though the Israeli diamond industry is notorious for discrimination in the workplace against non-Jews – a fact confirmed by data from the Israeli Bureau of Statistics and a recent government-funded initiative to encourage ultra-Orthodox Jews to take up employment in the diamond industry without a similar initiative for non-Jews. Furthermore, although authorities uncovered the “world’s largest illegal bank”, involving fraudulent trading worth billions of shekels, in the Israeli Diamond Exchange in 2012, Anglo American continues trading with Israeli diamond companies.
Anglo American’s failure to abide by their own standards exposes their hypocrisy – a double-standard that permeates the jewellery industry when it comes to blood diamonds from Israel .
The Steinmetz Diamond Group, one of Tiffany’s biggest suppliers and a “unique partner” of Sotheby’s Diamonds, through the Steinmetz Foundation, funds and supports a Unit of the Givati Brigade of the Israeli military. The Givati Brigade is guilty of the massacre of at least 21 members of the Samouni family in Gaza – a war crime documented by the UNHRC and other human rights organisations.
Other world-leading jewellers including Harry Winston, Cartier, Ritani, Blue Nile, Zales, Brilliant Earth, Graff Diamonds, Chow Tai Fook, Chopard and many more, sell diamonds from Israel which are tarnished with Palestinian blood – one of the most recent victim being a 15 year old child, Wajih Wajdi al-Ramahi, shot in the back and killed by the Givati Brigade on 7th December. He was the 26th Palestinian to be killed by the Israeli military this year.
The imperative for all businesses to respect human rights and ensure their business relationships are not contributing to adverse human rights impacts is a well established tenet affirmed in the UN Guiding Principles on Business and Human Rights, the UN Global Compact, and the OECD Guidelines for Multinational Enterprises. The fact that the diamond industry, which accounted for 31.2% of Israel ’s manufacturing exports in 2011, is a very significant source of revenue for the regime in Israel means jewellers that sell diamonds processed in Israel help fund the commission of war crimes and suspected crimes against humanity.
Shareholders of companies that sell diamonds linked to atrocities and bloodshed are exposed to financial and legal hazard. The fraudulent misrepresentation of such diamonds as conflict-free leaves jewellers open to challenge by patrons angered by the fact that diamonds they purchased in good faith are de-facto blood diamonds. Companies complicit in human rights violations may be liable for reparations, which, in the case of victims of Israeli violence in Palestine , could amount to billions of dollars.
Despite Israel ’s record as a serial human rights offender and it’s nuclear weapons stockpile which it refuses to submit to international regulation, the leaders of the global diamond industry continue to give Israel refuge in the KP tent.
Consumer power
If consumers are to have confidence in the ethical credentials of diamonds civil society needs to regain the initiative. This can be done by putting the jewellery industry under the spotlight and demanding that jewellers guarantee the diamonds they sell are not a source of funding for, or in any way associated with, serious human rights violations – i.e. they are not blood diamonds.
As cut and polished blood diamonds from Israel legally enter the diamond market in vast quantities (50% of the US market), diamond buyers should demand to know where a diamond was sourced, cut and polished if they want to avoid buying a blood diamond.
Diamond buyers should not allow jewellers to fob them off with assurances about “conflict diamonds” – the sacrificial offering which only encompasses rough diamonds that fund rebel violence against legitimate governments. This distracts from, and blinds consumers to, the extensive trade in cut and polished blood diamonds which continues unchecked and largely unreported by media.
“Ethically sourced” are some of the buzz words hammered into the conscience of diamond buyers. Rough diamonds at source represent but a small fraction of the value of the cut and polished diamonds sold by jewellers. Ethically sourced diamonds can still be blood diamonds if revenue they generate after sourcing is used to fund human rights violations. “The “ethically sourced” pitch is a scam – it offers zero protection from blood diamonds.
Another example of the duplicity of the jewellery industry is the widespread abuse of the term conflict-free. This is part of a bogus System of Warranties introduced by the World Diamond Council which allows sellers to self-certify diamonds as conflict-free based on the fact that they are in compliance with the discredited Kimberley Process which gives legal cover to blood diamonds that fund government forces.
Sean Clinton is a human rights activists from Ireland with a particular interest in Israel/Palestine and the role diamonds play in funding the Zionist project in Palestine . He has authored several articles about the double-standard in the diamond industry which facilitates the trade in cut and polished blood diamonds.
Labels: ANGLO AMERICAN CORPORATION, DEBEERS, DIAMONDS, ISRAEL
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(ROUGH AND POLISHED) De Beers’ Marange ‘saga’ refuses to die down
12.12.2013
Zimbabwe’s former mines minister Obert Mpofu made a chilling revelation three years ago that the diamond mining giant, De Beers “looted tonnes” of diamonds from the Marange mining fields over a period of “15 years” without notifying the state of the discovery of the gems.
“De Beers looted our diamonds for 15 years and were sending them to South Africa without our knowledge and they had even declared that area a restricted area, as if it was their land when the country belongs to us,” he said at the time.
Mpofu went on to say that the government believed then that De Beers was only prospecting and carrying out tests when in “reality” the company was carrying out covert mining activities.
“Everyone knows that the diamonds at Chiadzwa (Marange) are mined from the surface and De Beers was for the last 15 years alleging that they were doing prospecting and carrying out tests when in actual fact they were looting diamonds from Chiadzwa,” he said.
He said De Beers pulled out of the country when government began a probe into the operations of the company after getting wind that there were diamonds in Marange.
However, De Beers denied the allegations.
In an exclusive interview with Rough & Polished following the accusations, the De Beers group’s head of media relations, Lynette Gould said there was no evidence to support the allegations made against the diamond giant.
“If we had been mining 'tonnes' of diamonds, over a 15 year period, there would be a very large hole indeed left behind in Marange,” she said.
“Industrial mining of this magnitude would have been impossible to disguise, let alone keep secret. In conclusion, not only are the allegations outrageous and incredible, but they also lack any evidence, whatsoever.”
This denial by De Beers never stopped the Zimbabwean government from accusing the group of covert activities in Marange, although no much detail of the group’s corporate sins were given.
However, a non-governmental organisation called Centre for Natural Resource Governance (CNRG) tried to give us an insight into the ‘saga’ last month.
It alleged in a report that in 1994, De Beers successfully applied for an Exclusive Prospecting Order for Marange diamond fields and prospected for the next 12 years (1994 – 2006) not 15 years as alleged by Mpofu.
The diamond giant was required to recruit indigenous black Zimbabwean geologists due to an affirmative action policy enforced in the 1990s.
However, CNRG said that the local geologists employed by De Beers were denied access to Marange and naturally they became suspicious.
De Beers allegedly submitted successive misleading reports to the Zimbabwe government which cast doubts on Marange as a viable investment option, but it nevertheless continued “prospecting”.
Villagers in Marange also became suspicious of De Beers activities at Bezely Bridge where a very small makeshift diamond processing plant was established.
“According to villagers interviewed, the plant at Bezely Bridge operated at night only. Villagers and local geologists began pressurizing government to act on the clandestine operations of De Beers,” CNRG claimed.
“Some ZANU PF officials, tipped by indigenous geologists at De Beers, began to demand an end to De Beers operations in Marange.”
It said one of the most vocal proponent for the cancellation of the De Beers prospecting license was the late retired army general Solomon Mujuru.
Under pressure from a section of ZANU PF politicians, De Beers notified the government that it would not seek to have its EPO extended in March 2006.
CNRG further alleged that De Beers was not without support from some sections of the government of Zimbabwe.
“When pressed by villagers to explain what De Beers was doing in Marange, a senior government official who was also Mines Minister at the time, reportedly said De Beers was doing experimentation for fertilizer manufacturing,” said CNRG.
“This was meant to deliberately mislead villagers into believing De Beers activities would boost agricultural production in the area.”
The unnamed minister was said to be determined to renew the De Beers EPO in 2006 despite serious concerns raised by his colleagues in cabinet and in ZANU PF.
He reportedly said anyone willing to prospect in Marange was free to submit an application, adding that according to the law first preference would be given to the current EPO holder, De Beers.
However, ZANU PF officials, led by Mujuru, threatened the interests of the Openheimer family in Zimbabwe if they did not relinquish their hold on Marange.
Then the Openheimer family had a 40 percent controlling stake in De Beers.
CNRG said De Beers, however, pulled out of Marange abruptly on 29 March 2006.
It further alleged that when De Beers pulled out of Marange, some white South Africans, believed to be De Beers employees instructed locals to start panning for diamonds which they would buy once every fortnight, marking the beginning of illegal panning activities.
“The white South Africans also taught the locals how to identify a diamond and advised them of the exact places where they could find diamonds,” said CNRG.
“Prior to the withdrawal of De Beers in 2006, Marange residents did not know how to identify a diamond. The number of artisanal miners rapidly grew from less than 100 in May 2006 to over 10 000 by December 2006.”
CNRG also claimed that in 2011, when the Zimbabwe government, through Mpofu, initiated an investigation into De Beers activities in Marange from 1994 to 2006 all records pertaining to De Beers vanished from the Mining Promotion and Development Unit (MPDU).
The Zimbabwean government suspected that some employees, possibly with links to De Beers, could have been paid by De Beers to destroy evidence.
“However there is also a possibility that some senior government officials who were involved in De Beers activities feared that the investigations would expose them and therefore destroyed the records,” it said.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
Labels: CORRUPTION, DEBEERS, DIAMONDS, MARANGE DIAMOND FIELDS, ZIMBABWE
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(HERALD ZW) Diamond miners hit hard rock
December 9, 2013
Lloyd Gumbo recently in CHIADZWA
COMMENT - I am so sorry to hear that the diamond miners at Chiadzwa have hit hard rock and 'diamonds are running out'. I am looking forward to them handing back their expensive licenses and getting out of the diamond mining business. Aren't they? Maybe the government should start exploring the Debshan Ranch. - MrK
Mines and Mining Development Minister Walter Chidhakwa being shown Diamond Mining Company (DMC) mining equipment in Chiadzwa by the head of department Ettrene Heyns
Companies mining diamonds in Chiadzwa claim they have hit a hard rock and that alluvial deposits of the precious stone are fast running out, while extracting deep conglomerate gems is not commercially viable.To that end, they say they want further allocations of untapped diamond fields, promising to revert to current claims when they get efficient technology.
Officials at the companies made the claims during a familiarisation tour of the diamond mines by Mines and Mining Development Minister Walter Chidhakwa last week.
There are seven companies licensed to mine diamonds in Chiadzwa – Mbada Diamonds, Marange Resources, Anjin Investments, Diamond Mining Company, Jinan, Kusena and Gye Nyame.
However, they have come under fire from Government officials and analysts who question the business methods in operation and the sincerity of management of some of these firms.
Minister Chidhakwa said miners must balance alluvial and conglomerate operations, and that they should have planned for this from the word go.
Furthermore, Minister Chidhakwa read the riot act to miners who were not paying dividends to Government on time, and further castigated them for not contributing more meaningfully to Zimbabwe’s development.
According to the Diamond Facts website, alluvial diamonds are gems that are mainly found on the surface (eg in sand, gravel and clay) as a result of natural erosive action.
Small scale miners can use basic equipment like sieves, shovels and pans to dig up alluvial diamonds. On the other hand, diamondconsultants.ca defines conglomerate diamonds as a rock consisting of individual stones (larger than sand) that have been cemented together and require highly mechanised machinery to extract.
In short, conglomerate diamonds are embedded in layers of rock, while alluvial gems are surface level and require less specialist equipment to dig up.
An analyst told this paper that the mining houses should have been investing revenues from alluvial mining in equipment to venture into conglomerate mining.
Anjin director Mr Munyaradzi Machacha said, “The challenge we are facing at the moment is that we are operating at below break-even point.
“Our ore is much deeper to depths of about 40 metres and some of the areas we have had to abandon mining because it was no longer commercially viable.”
Mr Machacha said their current challenge was identifying areas they could mine using existing machinery while exploring and re-adjusting their mining plan to find more cost-effective methods to extract conglomerates.
He said they wanted to be immediately allocated new mining claims “with resources” for them to continue operating. In essence, Anjin would like Government to allocate it more – and rich – alluvial concessions with the state hoping that this time around more revenues will be committed to infrastructure and equipment.
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Minister Chidhakwa responded to the request saying: “From an economics point of view, it tells me that when you do that you will be balancing your costs hopefully some of them are being offset by alluvial.
“But even alluvial itself, you can’t keep getting the same grade. There are other spots where you find them in huge deposits and you should use that opportunity to capitalise and support the conglomerate.”
At Jinan, officials said the main resource at their claim was alluvial but that the grade was not commercially viable to extract.
“From 2012, the mined alluvial ore is about 2,4 million tonnes and the remainder is about 1,28 million tonnes. The remaining alluvial deposits cannot last at this mine for a long time,” said Jinan managing director Mr Ni Jun, through an interpreter.
Jinan chief mining operations officer, Mr Liu Jitat, added that conglomerate gems were too expensive to extract.
“We can see that the current mining area of the embedded depth of the conglomerate is already over 30 metres. But unfortunately, the conglomerate thickness is not very good. It is only 0,5 to 0,7 metres. The average grade is about 0,4 to 0,5 carats per tonne.
“So from this side, the grade is decreasing. On the other side which is the boundary with Mbada (Diamonds) the grade is 0,8 to one carat per tonne,” he said.
Minister Chidhakwa said if that was the case, then Jinan should surrender the claim to Government and institute processes to get another one.
Mr Ni said they would first draw a geological report for Government’s perusal before initiating any further processes in that regard.
Mbada Diamonds chief operations officer, Mr Tendai Kadyamusuma, said they were digging for both conglomerate and alluvial stones.
“Currently, we are exploiting low grade material compared to when we started. We have deep-seated conglomerate making it difficult to extract,” he said.
While touring Marange Resources, Minister Chidhakwa was livid that the miner was not declaring expected dividends to Government while under-investing in the country.
“You are 100 percent owned by Government and the expectations on you are much bigger than the expectations on anybody else in which we have 50 percent shares,” he said in reference to other diamond mining operations that are run as public-private partnerships.
“There are specific expectations on Marange Resources. Ko tinombowana dividend here (do we ever get a dividend from you)?
“I meet so many Zimbabweans who say to me why are we not getting what is due to us from Marange Resources where we don’t share with anyone else?”
He said Marange Resources was duty-bound to contribute to Treasury so that Government could meet its commitments, including paying civil servants a decent salary.
Minister Chidhakwa took a swipe at companies that were not investing in Zimbabwe to demonstrate their commitment to doing business in the country.
“We were almost involved in an accident because of the poor state of your roads. It only shows your fly-by night attitude. That ‘we are just coming to take and don’t care what we leave behind’.
“That is not the attitude I want to see from the mining sector. I have told everybody including those that are in the platinum sector. We want someone who can show us that if their reserve says they can stay here for 50 years, demonstrate that to us by giving us a 34-storey building in Harare or Mutare.
“That is how they built Sandton (in Johannesburg, South Africa),” said Minister Chidhakwa.
Last week, it emerged that mining companies banked just three percent of their billion dollar export revenues locally, thereby contributing to the liquidity crunch the country faces.
Last year, mines accounted for US$2 billion of Zimbabwe’s US$3,3 billion worth of exports, meaning much of the money made from exploiting the country’s resources contributed more to other economies as most of the money was not banked here.
Government has also taken a tough stance on minerals beneficiation, saying – in particular – platinum, diamonds and chrome must be processed locally.
This means mining houses must build local capacity and invest in infrastructure instead of exporting raw minerals that are then bought back by Zimbabweans as high value, processed imports.
Labels: CHIADZWA, DIAMONDS, WALTER CHIDHAKWA
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(SUNDAY MAIL ZW) Zim gems up for grabs in Belgium
Sunday, 01 December 2013 00:00
Kuda Bwititi
Zimbabwe is set to commence the sale of Marange diamonds on the Antwerp World Diamond Centre (AWDC) market in Belgium this week, with an initial consignment of 500 000 carats expected to fetch good prices.
The development, which will have a positive impact on the country’s economy, comes at a time when a cocktail of measures have been adopted to increase revenue generation in the mining sector.
AWDC is the diamond capital of the world with more than 1 800 companies and dealers and a capacity to handle 80 percent of the world’s rough diamonds and 50 percent of polished gems, guaranteeing local diamonds a diversified market.
This week’s auction is expected to see the country fetching massive returns on its diamonds unlike in the past when auctions had to be done “clandestinely” as a way of sidestepping the illegal economic sanctions.
The development will certainly come as good news to Finance and Economic Planning Minister Patrick Chinamasa who is desperately looking for revenue sources for the 2014 National Budget which must be announced before the end of next month.
Indicators from the Antwerp market last week showed that Zimbabwe’s gems are likely to attract hordes of buyers, as there is growing demand for rough diamonds.
Mines and Mining Development Minister Walter Chidhakwa last week disclosed that the inaugural sale of local diamonds on the Antwerp market will be held between 4 and11 December. Minister Chidhakwa added that an official from Antwerp, who was in the country last week to access modalities for the sale of the precious stones, had placed a seal of approval on the gems that Zimbabwe will be shipping.
“I am aware that an expert was here to assist us over the past few days and the diamond companies had an opportunity to meet him and prepare the parcels so that they are consistent with the Antwerp exchange.
“They (diamond mining companies) are trying to reach a target of 500 000 carats and I am sure they have already achieved that. This is to test the market. Hopefully, if the market is doing well, we will send more,” he said.
Minister Chidhakwa noted that the sale of diamonds on the auction market will enhance transparency, as all diamonds will be accounted for.
“We hope that the prices arising out of that first auction will encourage our companies to continue to go the auction route.
“I also think that when you compare with the tender systems that we used to have, I think that there is much greater transparency in the auctions system and we hope that system will give us the benefits that we are looking for including the issue of being transparent.
“We want to continue to move towards a transparent diamond mining system and a transparent diamond marketing system that gives Zimbabwe the best benefits available,” he said.
In a recent interview, Zimbabwe Mining Development Corporation (ZMDC) managing director Engineer Jerry Ndlovu projected that the Antwerp sales will increase revenue inflows by at least 20 percent.
“Definitely, we are most likely to see an increase of above 20 percent. Demand for our unique Marange Diamonds will definitely increase pushing prices up.
“On average we used to sell at a lowest price of US$50 per carat and a highest price of US$100 per carat for rough diamonds depending on the market forces but due to our footprint on the Antwerp market, we expect to get higher prices,” he said.
Engineer Ndlovu said the opening of the Antwerp market would see all sales concluded within two days, a major progress from the previous system that resulted in sales taking months to complete.
“Conclusion of diamond sales which was taking up to three months to complete will now take the normal 48 hours. Despite the fear on the global market that Zimbabwe is going to flood the market and lower prices, Zimbabwe will in actual fact be able to access the best market prices for its gems,” he said.
Engineer Ndlovu said the entry into the Antwerp market would help to unlock capital for ZMDC.
“ZMDC will now be able to procure inputs from EU countries. It will also be able to access foreign loans for its operations and lure investors in the diamond industry from European countries. It will also access capital to rehabilitate and re-equip existing mines as well as resuscitate closed mines.
“A vibrant Zimbabwe Mining Development Corporation will cascade into downstream industries and manufacturing services and suppliers. Supportive industry that had been negatively affected will also benefit from the lifting of sanctions” he said.
Resource Exploitation Watch Chairman Mr Tafadzwa Musarara said the Antwerp market will open massive potential benefits for Zimbabwe.
“First of all I think the Minister of Mines has to be commended for the work that he has done in this short space of time in office.
“By going to the Antwerp market, we are now playing with the big boys in the diamond industry. Before this our diamonds used to be bought by middle men who would then sale them to the same Antwerp market that we now have direct access to.
“It’s a gigantic boost to our sector because in terms of prices, we can expect to get about 100 percent more than what we were getting before. More importantly, the direct interaction that we will have with the big boys in the diamond industry means that we can create further synergies with them for the beneficiation of our diamond industry,” he said.
Meanwhile, Minister Chidhakwa disclosed that plans to clean diamonds before their sent to the market are already afoot.
“We agreed that all diamonds from Zimbabwe starting from the 1st of February 2014 will have to be cleaned. There is a deep acid cleaner that is applied to diamonds which ensures that the diamonds are clean and the valuation will then be done and the marketing will be undertaken. We agreed that they will have to bring in equipment and we will work with our companies in bringing in this equipment which is used for the cleaning of diamonds. We hope this will help us increase revenue from diamonds,” he said.
He added that the 24 hour surveillance of all diamond mines will ensure that there is full transparency in the mining of the precious mineral.
“The second thing is that in a bid to strengthen the security systems at Marange, as much for existing diamond mining companies and those that will come in the future, we expect that the entire process at the diamond mining sites as well as the marketing sites must have CCTV and that CCTV becomes available also to Government through ZMDC as a shareholder,” said Cde Chidhakwa.
Minister Chidhakwa said Government has resolved to cut down the 15 percent tax for local diamond cutters and polishers who have failed to kick off operations because of the restrictive taxes.
Other tax reforms in the mining sector are expected to be announced during the budget presentation which is due before January next year.
Zimbabwe got the green light to trade its diamonds on the Antwerp market following the lifting of sanctions on the companies mining diamonds in Marange by the European Union.
Last week, the World Federation of Diamond Bourses President Ernie Blom described Zimbabwe’s entry onto the Antwerp market as a positive step.
“I think it is a positive step and will benefit both Zimbabwe and Belgium.
“They are KP compliant and based on this should be able to trade on the world markets.
Zimbabwean diamonds are being sold in many other markets so why not in the EU (Antwerp)?
“While Zimbabwean diamonds might not always be of the highest quality they make up for this in volume which has helped sustain the demand for rough diamonds when many other mines around the world have seen a drop in production.
“In 2012 Zimbabwe generated 8 million carats and in 2013 they are expected to generate 16.9 million carats,” Mr Blom was quoted as saying by the media.
Labels: BELGIUM, DIAMONDS, MARANGE DIAMOND FIELDS
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(SUNDAY MAIL ZW) Exposé of De Beers’ murky dealings in Chiadzwa
Sunday, 01 December 2013 00:00
As part of a colourful narrative of corporate greed, corruption, intrigue and a conspiracy of silence, the story of how De Beers, a creation of Cecil John Rhodes, raped the diamond fields of Chiadzwa in a 12-year period has not been fully told.
True to history, only dribs and drabs of what truly transpired are beginning to emerge, signifying, on the one hand, how the country and the continent continue to lose out despite being richly endowed with minerals resources, and, on the other hand, how global international conglomerates continue to squander the goodwill offered by African governments.
De Beers, a company formed by Cecil John Rhodes in 1888 and subsequently taken over by the Oppeinheimer family, is described as a cartel of companies whose sphere of influence spans the whole diamond value chain from mining, trading and marketing.
A recent report released by the Centre of National Resource Governance (CNRG) indicates that suspicions that De Beers, whose first footprint in Zimbabwe’s Marange field was first registered in 1994 when it successfully applied for an Exclusive Prospecting Order (EPO), was secretly siphoning diamonds from Marange under the guise of prospecting first came to light in the 1990s after Government actively began pursuing its affirmative action policies.
Young black geologists, as a consequence, found their way into the employ of De Beers, but suspiciously they were denied access to Marange.
All the while, the company continued to compile dossiers of adverse reports of the fields as a viable investment option, but nevertheless continued prospecting.
It is not clear how the company’s exclusive prospecting order (EPO) was extended three times against the standing provisions of the Mines and Minerals Act.
Some groups believe that there was active collusion by local officials who abetted plans by the conglomerate to prejudice the Zimbabwean Government.
“Section 94 of Zimbabwe’s Mines and Minerals Act states that ‘no order shall be granted for a period in excess of three years but an order may be extended by the Minister, on the recommendation of the Board, for a further period or periods not exceeding three years in all.’
“This means government extended De Beers EPO three times since the initial expiration of its EPO in 1997,” observes the report.
But the scale and extent of De Beers’ greed didn’t escape the eyes of the locals.
It is believed that villagers became curious when the company set up what was believed to be a “makeshift diamond processing plant” at Bezely Bridge.
The plant operated only at night.
Armed with tips from local geologists and villagers, some Government officials began to confront the company, while others steadfastly stood in its defence.
Some of the officials that were compromised even lamely claimed that De Beers was doing “experimentation for fertiliser manufacturing.”
Some incensed officials (names withheld) even threatened the interests of the Oppeinheimer family, which controlled a 40 percent in the company then, if they did not exit from Marange.
When De Beers’ licence abruptly expired on 29 March 2006, they hastily withdrew.
It is alleged that after the withdrawal of De Beers, white South Africans - employees of De Beers - invaded the area and contracted villagers, whom they taught to identify the precious stones, to start panning for diamonds, which they bought once every fortnight.
But as word spread, artisanal miners grew initially from less than 100 in May 2006 to 10 000 in seven months time.
African Consolidated Resources, which had hastily been awarded an EPO after De Beers’ departure, also waded into the picture but Government withdrew its licence over the manner the EPO was granted.
Former Minister of Mines Dr Obert Mpofu tried to seek legal recourse by suing De Beers for fraud, but in a typical Hollywood espionage script, all the records vanished from Mining Promotion and Development Unit of the Government. And the case seems to have died a natural death.
To this day, De Beers professes innocence, claiming that the company prospected Marange for a little under 10 years.
It also claims that it divested from Marange because it does not mine alluvial diamonds.
Labels: CHIADZWA, CORRUPTION, DEBEERS, DIAMONDS
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(NEWZIMBABWE, IOL SA, SUNDAY INDEPENDENT SA) KP report shows Biti got diamond cash
24/11/2013 00:00:00
by
Iol.co.za
SUBSTANTIAL revenue from Marange diamond fields have evidently been going into state coffers, despite claims to the contrary by former finance minister Tendai Biti of the opposition MDC-T party.
This is according to classified documents from the Kimberley Process Certification Scheme (KPCS or just KP) which was set up to filter conflict diamonds (also known as blood diamonds) out of world markets.
They show that the four mines at Marange exported over $717 million worth of diamonds between November 2011 and October last year and paid 15 percent of that – just over $107m – in royalties into state coffers.
The KP research was part of the process of clearing Zimbabwe after its suspension from the KP due to reports that its forces had violently evicted informal miners from Marange.
The KP Monitoring Team comprised Abbey Chikane and Mark van Bockstael, chairman of the Working Group of Diamond Experts at the World Diamond Council in Antwerp.
The documents are not public but they are on the KP’s restricted website which is available to any of the many government, industry or civil society members of the KP. This has raised some questions about why they have not been cited before to counter the claims made by Biti.
The top MDC-T official frequently said he never saw any Marange revenues while he was finance minister in Zimbabwe’s coalition government from 2009 until this year’s elections, which Zanu PF won.
His party and many observers have often suggested that all income from Marange due to the state went directly into Zanu PF’s coffers.
In their report for the quarter February to April last year, the authors say statements by ministers about the lack of transparency in the “chain of custody” of Marange diamond production and export “have caused serious confusion regarding compliance to KP standards and minimum requirements.”
They refer to contradictory statements by Zimbabwe’s ministry of mines – then controlled by Zanu PF – and the finance ministry and agencies then controlled by Biti’s MDC.
Chikane and Van Bockstael found that both the Reserve Bank of Zimbabwe and the Zimbabwe Revenue Authority (Zimra), which is part of the treasury, were both directly involved in authorising diamond exports so they could be KP certified.
Zimra was involved in several steps of the process, including receiving copies of customs forms which showed that the amount paid to the producer, as noted on the KP certificate, had been received in the producer’s bank account in Zimbabwe.
Zimra also had to give clearance for the shipment of the rough diamonds near the end of the process by issuing “Release Form 21”.
Zimra “thus holds the key to all rough diamond exports from Zimbabwe,” the report says.
“Statements that Zimra is completely unaware of the exports of rough diamonds are therefore alarming as these could indicate that the KPCS-compliant export process for rough diamonds is no longer applied or not applicable in case of rough diamond shipments from Marange.”
However, Chikane and Van Bockstael’s report says further investigation showed that proper process was still being implemented for all rough diamond exports, including Marange, and that Zimra need only check its records to identify how much revenue through royalties had been generated by rough diamond exports.
Last week at the annual KP Plenary in Johannesburg, campaigners failed to persuade the KP to block rough diamond exports by rebel movements and exports by governments which exploited diamonds to fuel violence.
Labels: DIAMONDS, KIMBERLEY PROCESS, MDC CORRUPTION, TENDAI BITI
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(NEWZIMBABWE, 'AGENCIES') South Africa urges US to lift sanctions
19/11/2013 00:00:00
by Agencies
AN international meeting to discuss rules curbing the sale of conflict diamonds has begun in Johannesburg, South Africa with a call for the United States to lift sanctions on Zimbabwean mines.
Representatives of 81 countries taking part in the Kimberley Process heard a plea from the South African chairman that the US follow the European Union's lead and allow Zimbabwe's return to fully fledged international trade.
South Africa's Welile Nhlapo, who currently chairs the rotating presidency of the diamond watchdog, congratulated the European Union for "its decision to lift sanctions on Zimbabwe" after the July 31 elections won by President Robert Mugabe.
"We hope that those who continue to maintain such sanctions will also be able to lift them because the lifting of these sanctions would assist Zimbabwe to bring stability and prosperity once again," he said at the start of the regulator's four-day talks in Johannesburg.
The EU in September lifted restrictions against the Zimbabwe Mining Development Corporation (ZMDC), the firm that controls Marange, one of the world's largest diamond fields.
Zimbabwe's Mines Minister Walter Chidakwa threw his weight behind the recommendations of the UN-backed Kimberley Process.
"Since the EU has removed sanctions on our diamonds, we are calling on the United States to remove sanctions so that we can be able to do as much business as possible," Chidakwa said.
The move by the EU allows the country to go back to trading at Antwerp, one of the world's largest diamond centres, in Belgium.
"I hope that in December we will be able to make a full comeback into Antwerp," Chidakwa said on the side-lines of the annual assembly.
However, Shamiso Mtisi, a representative of the civil society coalition at the KPCS criticised the organization for certifying Zimbabwe's compliance with its diamond sale benchmarks while ignoring the lack of transparency and accountability in the extraction and sale of diamonds in Zimbabwe.
ZMDC had been blacklisted in 2004 for allegedly channelling funds to Mugabe's Zanu PF party.
Labels: DIAMONDS, SANCTIONS
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(HERALD ZW) ‘Lifting of sanctions was long overdue’
November 15, 2013 Obert Chifamba Top Stories
Lovemore Chikova in ANTWERP, Belgium
The removal of illegal sanctions imposed on Zimbabwe’s diamond mining companies was long overdue and will now spur the development of the country’s natural resources, especially as it trades in its Marange gems at Antwerp, a Belgium official has said.
Speaking during a dinner hosted for the Zimbabwean delegation touring Antwerp, the world’s biggest diamond trading hub, on Wednesday, Antwerp’s vice mayor Mr Ludo Van Campenhout said it was good that the country was now part of the world diamond trading centre.
“We are happy that the embargo has been cancelled by the European Union,” he said. “That is a good thing and it gives us an opportunity to develop trade. The lifting of the sanctions was overdue. The diamond industry is part of the city and today you are now also part of the city.”
Mr Van Campenhout said Antwerp had a tradition of being open and friendly, with people from almost 170 nationalities living in the city in harmony. The trading of diamonds from Zimbabwe on the world market had been stalled by the illegal sanctions regime imposed on the Zimbabwe Mining Development Corporation and its subsidiaries by the European Union.
ZMDC is a State enterprise in partnerships with five diamond mining companies in Marange, whose operations have all been certified by the Kimberley Process Certification Scheme.
Speaking at the same occasion, secretary for Mines and Mining Development Professor Francis Gudyanga said it was important that Antwerp played a role in ensuring that the sanctions were lifted.
“We know you have done a lot to have the sanctions lifted,” he said. “Our view is to try and learn how the business (of diamond trading) goes.
“There is so much expectation back home that the selling of our diamonds will translate into the building of roads and schools. We call on you to mentor us so that we have an efficient system in handling our diamonds.”
Speaking in an interview yesterday, Prof Gudyanga said the visit to Antwerp which started on Tuesday and ends on Monday next week had been so far productive.
He said the delegation had learnt a lot within the few days, especially on the technical issues required to successfully auction diamonds.
“We have been taken through various processes to do with finances, economic arrangements and we have also gone through the logistics on how the system works for bringing up the diamonds,” he said.
“But the most important thing we have come to understand is that we add value to our minerals. We are improving the system. We have to have integrity into the system that we operate.
“Whether it is the system of sorting our diamonds, the system of grading them, the system of purchasing, the system has to be really not tampered with. This is where we get maximum value of our diamonds.”
Prof Gudyanga said it was important to have Zimbabweans trained for them to operate the diamond system efficiently.
He said all stakeholders in the diamond industry, including producers, should be aware of all the various aspects so that the system becomes flawless.
“This involves various arms of Government, the producers, the security as well as the financiers, so it’s really a very integrated system which we hope we can introduce in Zimbabwe,” said Prof Gudyanga.
“The people here in Antwerp are very keen to assist us with all the various aspects. We are having various dialogues with various people so that every aspect of it is done according to well tested systems so that we have the best practices we will be bringing to Zimbabwe.”
Prof Gudyanga said if all the proper channels were followed, the country would get value from its gems.
The delegation, which is being led by Prof Gudyanga and made up of officials from the Minerals Marketing Corporation of Zimbabwe, the ZMDC and embassy officials, has so far toured a number of establishments associated with the marketing and auctioning of diamonds.
On Wednesday, the delegation was upraised by Belgian government officials on the procedures to be followed for the export of diamonds to Antwerp, before visiting the Diamond Office to observe the process.
The delegation yesterday visited Malca Amit, a company that provides security for diamonds in transit and those already at Antwerp, and also had sight of procedures at the diamond trading hub’s laboratory.
Labels: ANTWERP, BELGIUM, DIAMONDS, SANCTIONS
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(HERALD ZW) ‘Diamond sanctions removal to spur development’
November 14, 2013
Lovemore Chikova in ANTWERP, Belgium
The removal of illegal sanctions imposed on Zimbabwe’s diamond mining companies was long overdue and will now spur the development of the country’s natural resources, especially as it trades in its Marange gems at Antwerp, a Belgium official has said.
Speaking during a dinner hosted for the Zimbabwean delegation touring Antwerp, the world’s biggest diamond trading hub on Wednesday, Antwerp’s vice mayor Mr Ludo Van Campenhout said it was good that the country was now part of the world diamond trading centre.
“We are happy that the embargo has been cancelled by the European Union,” he said. “That is a good thing and it gives us an opportunity to develop trade.
“The lifting of the sanctions was overdue. The diamond industry is part of the city and today you are now also part of the city.”
Mr Van Campenhout said Antwerp had a tradition of being open and friendly, with people from almost 170 nationalities living in the city in harmony.
The trading of diamonds from Zimbabwe on the world market had been stalled by the illegal sanctions regime imposed on the Zimbabwe Mining Development Corporation and its subsidiaries by the European Union.
ZMDC is a state enterprise in partnerships with five diamond mining companies in Marange, whose operations have all been certified by the Kimberley Process Certification Scheme.
Speaking at the same occasion, Secretary for Mines and Mining Development Professor Francis Gudyanga said it was important that Antwerp played a role in ensuring that the sanctions were lifted.
“We know you have done a lot to have the sanctions lifted,” he said. “Our view is to try and learn how the business (of diamond trading) goes.
“There is so much expectation back home that the selling of our diamonds will translate into the building of roads, schools. We call on you to mentor us so that we have an efficient system in handling our diamonds.”
In an interview yesterday, Prof Gudyanga said the visit to Antwerp which started on Tuesday and ends on Monday next week had been so far productive.
He said the delegation had learnt a lot within the few days, especially on the technical issues required to successfully auction diamonds.
“We have been taken through various processes to do with finances, economic arrangements and we have also gone through the logistics on how the system works for bringing up the diamonds,” he said.
“But the most important thing we have come to understand is that we add value to our minerals. We are improving the system. We have to have integrity into the system that we operate.
“Whether it is the system of sorting our diamonds, the system of grading them, the system of purchasing, the system has to be really not tampered with. This is where we get maximum value of our diamonds.”
Prof Gudyanga said it was important to have Zimbabweans trained for them to operate the diamond system efficiently.
He said all stakeholders in the diamond industry, including producers, should be aware of all the various aspects so that the system becomes flawless.
“This involves various arms of Government, the producers, the security as well as the financiers, so it’s really a very integrated system which we hope we can introduce in Zimbabwe,” said Prof Gudyanga.
“The people here in Antwerp are very keen to assist us with all the various aspects. We are having various dialogues with various people so that every aspect of it is done according to well tested systems so that we have the best practices we will be bringing to Zimbabwe.”
Prof Gudyanga said if all the proper channels were followed, the country would get value from its gems.
The delegation,which is being led by Prof Gudyanga and made up of officials from the Minerals Marketing Corporation of Zimbabwe, the ZMDC and embassy officials, has so far toured a number of establishments associated with the marketing and auctioning of diamonds.
On Wednesday, the delegation was upraised by Belgian government officials on the procedures to be followed for the export of diamonds to Antwerp, before visiting the Diamond Office to observe the process.
The delegation yesterday visited Malca Amit, a company that provides security for diamonds on transit and those already at Antwerp and also has a site of procedures at the diamond trading hub’s laboratory.
Labels: ANTWERP, BELGIUM, DIAMONDS, FRANCIS GUDYANGA, SANCTIONS, ZDERA
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(NEWZIMBABWE, 'THE SOURCE') Zimbabwe, EU set for Antwerp diamond talks
12/11/2013 00:00:00
by The Source
GOVERNMENT and diamond mining officials left the country on Monday for Antwerp, Belgium to tie up agreements on Zimbabwe exports, two months after the European Union lifted sanctions on the state-owned mine Zimbabwe Mining Development Corporation, the mines minister said.
The EU lifted sanctions on the ZMDC in September which allowed Zimbabwe to negotiate better prices after relying on middlemen to undercut the EU sanctions for several years.
“It is important for (Zimbabwe) to familiarise itself with the marketing systems, regulatory frameworks and logistical issues because, we want all systems to be in place ready to market our diamonds,” Mines minister Walter Chidhakwa told The Source.
He said diamonds exports should start soon after the delegation’s return.
Last month, officials from the Antwerp World Diamond Council (AWDC), the world’s leading diamond trading hub visited the country and toured diamond mines in Chiadzwa area in eastern Zimbabwe.
The Zimbabwe government has said it will use extra cash generated from diamond sales to finance its ambitious Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) which it says will grow the economy by up to 10 percent by 2018.
ZMDC is the primary holder of mining concessions in the country and owns diamond miner Marange Resources.
It also partners five other diamond mining companies - Mbada Diamonds, Diamond Mining Corporation, Anjin Investments, Gye Nyame Diamonds and Kusena Diamonds which are also exploiting the gems.
Labels: BELGIUM, DIAMONDS, EU, SANCTIONS
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(HERALD ZW) Surge in value of Zim diamonds forecast
October 26, 2013
Zvamaida Murwira Senior Reporter
THE value of Zimbabwe’s diamonds is expected to rise significantly owing to the re-engagement between Harare and the Antwerp World Diamond Council. Resumption of trade with AWDC — which has about 2 000 traders of the gems — should see demand for diamonds surge and consequently, the value as there would be more buyers on the market.
The visiting AWDC top leadership held a series of meetings with three Government ministers yesterday to concretise resumption of trade in diamonds between Zimbabwe and the Belgium-based organisation.
They held meetings with Mines and Mining Development Minister Walter Chidhakwa, Finance Minister Patrick Chinamasa, Industry and Commerce Minister Mike Bimha and officials from the Zimbabwe Mining Development Corporation and Minerals Marketing Corporation of Zimbabwe.
Both the AWDC leadership and Zimbabwean authorities were agreed that the lifting of illegal sanctions against ZMDC would boost the value of diamonds extracted in Zimbabwe, spawning economic boom.
The boom is underpinned by the fact that Zimbabwe’s diamonds would now be exposed to about 2 000 buyers under the Antwerp network.
Zimbabwean authorities are now expected to leave for Brussels soon to concretise the deals and interact with some of the diamond traders under the AWDC diamond network that boasts of 550 years of experience in the precious stones.
Speaking at a business lunch yesterday, AWDC chief executive officer, Mr Ari Epstein acknowledged that sanctions had the effect of undervaluing Zimbabwe’s diamonds, thereby prejudicing the country of revenue.
“We are truly convinced that the Zimbabwean diamonds are today sold significantly below their market value. Backed by more than 550 years of expertise and a critical mass of buyers and sellers, we can guarantee an optimal and transparent pricing mechanism,” said Mr Epstein.
He pledged to have a mutually beneficial trading arrangement with Zimbabwe.
“Honourable ministers, it is for all of us a new beginning. You represent the new team governing Zimbabwe, and from our part a renewed engagement. We look forward to trade within a new dynamic, by ensuring long term and mutually beneficial relationship between Antwerp and Zimbabwe, a relationship in which our experience, standards and knowledge are shared and put to the benefit of an optimal value for Zimbabwe,” he said.
Speaking at the same occasion, Minister Chidhakwa said the new partnership that had been conceived, would trigger higher value of Zimbabwe’s diamonds.
“I agree that the pricing, the valuation of our diamonds, for one reason or the other is really not what the world expects of us and we also do not expect that of ourselves. We hope that we can improve our valuation and certainly the fact that we have been removed from sanctions, now give us a wider group of buyers, business people who will not hesitate to come to us because they know that they are dealing with Zimbabwean people who are not under sanctions,” he said.
Minister Chidhakwa said he hoped that the EU, with the assistance of World Diamond Council would remove all the remaining sanctions on Zimbabwe so that it trades freely in every sector.
He commended AWDC for showing confidence in Zimbabwe, saying its decision was premised on the full compliance of Kimberly Process Certificate Scheme by Zimbabwean firms and the free, fair and credible July 31 2013 election.
Minister Chidhakwa also paid tribute on AWDC for putting up a fight on behalf of Zimbabwe to have sanctions removed on ZMDC.
“We want to ensure that beyond meeting the KPCS requirement, to secure the sector, to ensure that the process by which our diamonds are mined, marketed and logistically moved to other countries has the same level of transparency as those marketed elsewhere in the world,” he said.
Minister Chidhakwa told the AWDC that Zimbabwe had indeed held free, fair and credible election, so much that all political players were agreed that the polls were peaceful.
He said with the lifting of sanctions on the trade of diamonds, the sale of the precious commodity would be done in a mutually beneficial way.
“We recognise the importance of our partners, the people we do business with. They are not here just to be friends with us, they are here to make business, make money for themselves, to run profitable businesses and therefore we want them to benefit from the ventures,” he said.
“But we also, as representatives of the Zimbabwean people, as a Government, we want the Zimbabwean people to begin to say, yes this country is endowed with diamonds and we are feeling the positive benefits of the diamonds.”
MMCZ chairperson, Mrs Juliet Machoba said the lifting of sanctions would now open them up to 1800 diamond traders.
“We will have a much bigger exposure of markets as opposed to the situation we had,” she said.
Labels: DIAMONDS
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(HERALD ZW) Tsvangirai de-campaigns Chiadzwa diamonds
October 26, 2013 Shingirai Huni Local News
Herald Reporter
MDC-T leader Mr Morgan Tsvangirai was yesterday dragged by his handlers to a seminar at Oxford University where he cast aspersions on diamond mining at Chiadzwa in a bid to counter the visit by the Antwerp World Diamond Council delegation that arrived in Zimbabwe on Thursday to explore modalities of trading the gems on the international market.
Mr Tsvangirai was accompanied to the seminar titled “Making Extractive Industries in Africa Work for African People” that was jointly convened by Oxford University and
the international NGO Oxfam, by his political advisor Dr Alex Magaisa.
Contrary to media reports, Mr Tsvangirai was not billed for a special lecture on the aforementioned subject as he was part of a three-member panel along with Mr Sam Kutesa, Uganda’s foreign affairs minister and Professor Mthuli Ncube, chief economist with the African Development Bank.
In his presentation, which focused entirely on Zimbabwe, Mr Tsvangirai claimed a “new dangerous culture emerged when diamonds were discovered in Zimbabwe” that he claimed was manifest in:
* the powerful role of the military that he claimed had taken over and militarised operations in Chiadzwa.
* lack of transparency in diamond mining and revenue.
* elite capture of national diamond resources; and
* emergence of a parallel government during the inclusive Government that he claimed was bankrolled by diamond revenue.
He claimed Zanu-PF “stole” the harmonised elections using diamond money that he claimed was used to create a Zanu-PF “war chest”. And in the clearest indication that he would ignore the dominant sentiment in his party that he was past his sell by date, Mr Tsvangirai said “democratisation was not an event” but a process that would take him to the 2018 elections.
Analysts yesterday described the seminar as an attempt to secure the door when the horses had already bolted as the Antwerp World Diamond Council was in Zimbabwe exploring modalities of getting the Chiadzwa diamonds on the international market.
Labels: ALEX MAGAISA, DIAMONDS, MORGAN TSVANGIRAI, OXFAM, SANCTIONS, ZDERA
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Continued...
(NEWZIMBABWE) Tsvangirai: how diamonds shaped our politics
26/10/2013 00:00:00by Morgan Tsvangirai
I have impeccable information of how 30,000 carats were clandestinely spirited out of the country in April and May this year by named senior Zanu PF officials and military generals and sold through an intermediary in Angola for the sole purpose of funding electoral theft. God gave Zimbabwe these natural resources as a blessing and not a curse.
As the MDC, we pray that they benefit the majority of the people of Zimbabwe. We will use all the platforms we currently occupy, especially Parliament, to articulate and protect the interests of the ordinary citizen of our country on such matters where the innocent citizen is being short-changed. I thank you
Labels: DEBEERS, DIAMONDS, MDC, MORGAN TSVANGIRAI
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(NEWZIMBAWE) Tsvangirai: how diamonds shaped our politics
26/10/2013 00:00:00
by Morgan Tsvangirai
“The Zimbabwean experience of diamonds and how they have shaped our politics.” - MDC President Morgan Tsvangirai’s Speech at Oxford University (Thursday, 24thOctober 2013)
IT is always inspiring and a great honour to be invited to an august forum of such a prestigious and famous institution of higher learning and research. I sincerely acknowledge the invitation to Oxford University and the Centre for African Studies, one of the highest centres of learning in the world. For centuries, some of the world’s greatest minds have walked the cobbled streets of Oxford and graced its platforms and I am humbled to have been chosen to be in your company today.
This is my first international engagement after the disputed elections in Zimbabwe and to do so at this world-renowned centre of learning is both an honour and a privilege. That you have invited me here represents a re-affirmation of the importance of our cause and the seriousness with which it is regarded by the academic world, especially the Centre for African Studies which has over the years provided a forum for discussion and debate on the critical issues affecting our continent, a continent toward which some of us have invested so much time, effort and love to ensure that it provides a safe and happy environment for its inhabitants.
Politics has always stood to benefit from intellectual capital. Developmental and democratic processes in Zimbabwe and Africa generally can benefit more from greater input by intellectuals. Research is critical – it informs politicians and politics and as the MDC, we place high value on the contributions made by intellectuals even as we appreciate that politics is an arena for participation by everyone.
We regularly draw on the expertise of intellectuals and do not hesitate to invite them to work with us and we have been privileged to have some joining our ranks over the years. We take your work seriously and encourage you to do more research on Zimbabwe including on issues that form the core of today’s discussion. Left to ourselves and our egos, we politicians can easily become our own worst enemies and so we need intellectuals to play their critical role, pointing to our errors and checking our excesses. It is for this reason that we in the MDC fought hard to ensure the inclusion of the right to academic freedom in Zimbabwe’s new Constitution.
I have been asked to talk about the extractive industry, in particular, the diamond industry in Zimbabwe and its impact on the politics obtaining in the country. This topic is most appropriate and poignant, given the background of the most recent elections in Zimbabwe, whose process and outcome have been marked by serious controversy leaving serious credibility and legitimacy questions.
While it is tempting, the purpose of the paper is not to discuss the process and outcome of those elections, which is a matter for another forum. The paper will however, make reference to the elections to the extent that it is necessary and unavoidable in discussing the interplay between the diamond industry and politics in Zimbabwe – which forms the core of this paper.
Diamond curse
While Zimbabwe could have learned from previous experience in other African countries, such as Sierra Leone and the DRC, the discovery of diamonds has indeed followed the all-too-familiar script and turned out to be a curse rather than a blessing for the country. There were serious human rights abuses that took place following the discovery of the precious stones – as reported and authenticated by civil society organisations and the initial disbarment of Zimbabwean diamonds from the Kimberly Process until not so long ago, when they received certification.
The military occupation of the diamond fields, the beatings and killings of those who came for the “Diamond Rush”, the forced displacement of the local people in Marange in Manicaland province and the problems they continue to face following their displacement remains a cause for concern. The poverty endemic in this area is not consistent with the value of the diamonds extracted from their land. It is displeasing how a people can continue to wallow in poverty in the midst of a treasure benefitting the well-heeled and the well-connected in government.
The mining industry has replaced the once-thriving agricultural sector as the biggest export and foreign currency earner for the country. The sector has seen a lot of companies entering the fray, particularly in diamond mining. The companies include: River Ranch, Murowa Diamonds, Mbada Diamonds, Anjin, Marange Resources and Diamond Mining Company (DMC). Government, through the state-owned company, ZMDC entered into joint venture agreements with a 50/50 shareholding in the following companies: Mbada, Anjin and DMC. Marange Resources is owned 100% by ZMDC.
The diamond mining sector was generally small until the huge discovery of alluvial deposits in Marange in 2006. It is estimated that the country now has the capacity to supply 25% of the global diamond market.
As a party, the MDC’s aims to promote a “social democratic developmental state”, and sees the mining industry as a critical sector through which to promote both development and strengthen democratisation in the country. Unfortunately, the experience so far under Zanu PF in control of natural resources and the mining sector is that the diamond industry has neither helped in promoting development or democratisation in the country.
Instead, it has increased the gap between the minority that are extremely rich and the majority who remain poor while at the same time fuelling the undermining of democratic processes. I will endeavour to demonstrate this in more detail below by showing the major challenges affecting the diamond mining industry and how they have impacted on the politics in the country.
Lack of transparency
The secrecy and lack of transparency in the diamond mining industry has resulted in serious leakages and failure to remit satisfactory revenues to the State. While the Minister of Finance expected $600 million from the proceeds of diamond exports in 2012, the State only received about $41 million. This is against reported sales of diamonds running into billions of dollars every year. According to international NGO Global Witness, about $2bn in diamond revenues have been unaccounted for since 2008.
In 2012, our Minister of Finance was forced to revise his $4 billion National Budget to $3,4 billion after the $600 million expected from diamond sales did not materialise. Our own Parliamentary Portfolio Committee on Mines and Energy presented a report in Parliament in June 2013 which states the following:
“The Committee observed with concern that from the time that the country was allowed to trade its diamonds on the world market, government has not realized any meaningful contributions from the sector. This is despite the fact that production levels and the revenue generated from exports has been on the increase. There are serious discrepancies between what government receives from the sector and what the diamond mining companies claim to have remitted to Treasury”.
The parliamentary committee's report said powerful officials, politicians and police and army commanders repeatedly tried to thwart the probe into diamond dealings. The chair of the 22-member panel, Edward Chindori-Chininga, a former Mugabe Mines minister, died in a car crash just days after he signed off the report in June. Police said Chindori-Chininga's death was accidental and that his car had veered off the highway and slammed into trees. However, observers found the circumstances of his demise suspicious.
Certainly, car wrecks or mysterious accidents are not uncommon in our part of the world and as a local press report indicated recently, they have taken the lives of 12 senior politicians, all of whom were believed to have bucked official policy, in the past two decades. The parliamentary committee's report said several officials lied while giving evidence under subpoena and that diamond earnings are not only shielded from scrutiny but are not channelled into the state coffers.
The one notable discrepancy is that while Treasury received $41 million only in 2012, one of the diamond mining companies which responded to the Parliamentary Committee (Mbada) stated that it had remitted $117 million to government as dividends for its shareholding. The difference between $117 million supposedly received from Mbada and the $41 million actually received by treasury remains unaccounted for. This is even before one considers remittances in dividends from other diamond mining companies in which the state is a shareholder, let alone the royalty fees and other payments due to the state.
Under-reporting
The lack of transparency means that nobody appears to know exactly how much the country has earned from diamonds and whether the reported figures are accurate. It is clear that there is serious under-reporting of the proceeds from diamond mining and trade. The effect of the low remittances to government simply means the State has been thin on resources and it has not been able to finance the developmental projects that had been budgeted for. With the State receiving little revenues than expected, its developmental role has been seriously hamstrung.
It is hoped that the lifting of restrictive measures on ZMDC and the use of the Kimberly Process will promote greater transparency. The measures had the effect of giving rent-seekers an opportunity to conduct their dealings in the parallel market, thereby promoting shady deals, leakages, non-accountability and corrupt activities. They no longer have that excuse and it is expected that there will be added transparency and therefore accountability in the mining and trade of diamonds. If the State receives what is due to it from the diamond companies, the hope is that the Government will channel those resources to developmental projects. We had comprehensive plans, as an MDC Government to make diamonds work for the people of Zimbabwe – using the proceeds to support infrastructural projects and promoting social services for local communities.
Corruption
Diamond mining in our country is riddled with corruption as confirmed by the Parliamentary Committee report and President Mugabe’s recent speech at the official opening of Parliament when he cited the former ZMDC chairperson as having accepted bribes from prospective investors. Many of us believe the naming and shaming of a few individuals is only a tip of the iceberg. The corruption is mainly due to the lack of transparency and unbridled greed on the part of those entrusted with overseeing the diamond mining industry. It is to be noted that the former Minister of Mines who has previously been fingered in corrupt deals is now an owner of a bank that had fallen on hard times. Many of the people in and around the diamond mining industry are known for their conspicuous consumption in the middle of a sea of poverty around the country. Corruption has also impacted on investment as the costs invariably are higher because of rent-seekers using corrupt means to secure benefits for themselves.
Militarisation
There is an unusual involvement of the military and the police in the diamond mining industry, when mining is a civilian exercise. The army, police and other security services have formed trusts through which they own shareholdings in diamond mining companies. No other arms or agencies of the state have the same facilities. Indeed, there are no known investments by the army, police and other security services in businesses beyond the diamond mining industry. This goes to demonstrate the critical place occupied by the diamond mining industry in the political dynamics of the country.
With heavy interest invested in the industry by the military courtesy of Zanu PF, this has strengthened the bond between the party and the military, resulting in the latter having a greater incentive to ensure the former retains power at all costs. Not surprisingly, the military played a critical role in the election process, mainly propping up Zanu PF and mobilising support, including their role in electoral institutions and processes.
Military personnel were deployed in provinces to mobilise support for Zanu PF in what were referred to as political re-education campaigns, long before the election started. Zanu PF was actively aided by the security services sector in their political campaign, thereby giving them an unfair advantage over fellow contestants. While there was less of the violence that was seen in previous elections, the mere presence of soldiers and security personnel especially in rural areas during the election campaigns helped to intimidate voters, reminded them of the scourge of state-sponsored violence of 2008 and generally assisted Zanu PF to benefit from the “harvest of fear” in the 2013 election. The participation of the security services in support of Zanu PF was incentivised by the benefits accruing from the diamond mining industry.
Refusal to account
It is expected in a normal democracy that the Executive is accountable to Parliament and that when Parliament seeks answers, it should be able to summon the executive and make the necessary enquiries. The experience of Parliament generally and the Portfolio Committee showed that when it came to the diamond industry, the Executive was actively refusing to account.
According to the Portfolio Committee Report, “During the four year period of the enquiry, the Committee observed with concern that the Executive and its officers were generally not willing to be held accountable by Parliament. This was evidenced through the Committee’s experiences as it conducted this enquiry. This goes against the basic universal principles of Ministerial Accountability to the Legislature as enshrined in national or international law”.
This goes to demonstrate how the curse of diamonds has actually worked to undermine the normal democratic process and therefore contaminate the democratic culture in the country.
China and the industry
There is a heavy involvement of the Chinese in our diamond industry. They are probably the only foreign investor with significant control of the diamond industry but their investment and activities are also shrouded in secrecy and controversy. From the prevalence of unfair labour practices in Chinese-run companies to corruption and serious leakages, there have been many complaints regarding Chinese role in the diamond mining industry. Zanu PF has always regarded the Chinese as their all-weather friends. It is probably by no coincidence that in return, China has been one of the biggest backers of ZANU PF - at the international level (UN). We note that the Communist Party of China played an important to support Zanu PF in the recent election.
Zanu PF has used diamonds to strengthen its relationship with China, particularly in order to safeguard its own interests at the international stage, e.g. the UN Security Council. China’s approach in Africa is generally to turn a blind eye to human rights abuses or acts that undermine democracy as long as its own interests are being served. While some might acknowledge their refusal to get involved in the internal affairs of countries in which they operate, dictatorial regimes tend to take comfort in the cushion they receive.
In Zimbabwe, for example, Zanu PF regards China as a useful counter-weight to the West, which has generally been calling for human rights protection and promotion of democratic processes in the country. The diamond mining industry has been useful in oiling the relationship between Zanu PF and China with the latter providing political support needed by Zanu PF.
No value addition
Along with many other countries in Africa, diamonds and other minerals are generally produced and exported in their raw and cheaper forms. This does not aid Africa’s development as it ends up importing value added products at much higher prices. There are reports of tonnes of soil and rubble being shipped to China and other countries representing serious leakages in the system that could help in the country’s development efforts if they were plugged.
The overall impact of the diamond industry so far has been to derail the democratisation process through the overt involvement of the military, corruption and the emergence of a parallel economy that has fuelled illegal and underhand dealings impacting on the electoral processes.
Through this parallel economy, Zanu PF has large amounts of cash giving it the ability to manipulate the electoral process and subvert the will of the people through payment of shady consultancies to perform election-related work, the refusal to support the Treasury in its developmental work simply because it was MDC-controlled and the deliberate porosity and leakages in this sector.
All these factors have created a compromised State in which the ruling party was closely wedded to the military and other agencies benefitting from the diamond industry. I have reliable information that all these factors have converged to ensure a ZPF victory at all costs. Everything was done to make sure ZPF remained in power in order to protect the new found spaces to accumulate wealth. The lack of vision and proper plans in this industry have meant that apart from derailing the democratic processes, diamond mining is still is not geared towards development in the country.
What’s to be done?
Diamond mining has to benefit the communities in which mining is taking place and the people of Zimbabwe as a whole. Article 13 of our new Constitution provides that the State must ensure that local communities benefit from the resources in their areas. From a gender perspective, the new Constitution also provides that the State must ensure that women have access to resources on the basis of equality with men. I am certain that an analysis of the diamond mining industry and trade in Zimbabwe will demonstrate that it is skewed heavily against women. The militarisation, violence and power dynamics associated with the diamond industry are generally against any measures that are likely to promote women’s participation and their interests.
Overall, all activities in the diamond mining industry must be consistent with the spirit of constitutionalism. This implies safeguarding and promoting the fundamental rights and freedoms of the people as well as generally upholding the Rule of Law. Above all, there must be respect for property rights. To this extent, one tends to agree with the recommendations of the parliamentary portfolio committee which investigated the diamond mining industry of Zimbabwe.
Value addition
There is need for beneficiation and value addition for our diamonds in order to create more revenue, build industry and create jobs in Zimbabwe. This would assist in reducing the high unemployment levels currently pegged at almost 90 per cent. It will also enhance the country’s revenues by promoting the export of higher-value goods than the current practice where emphasis is on cheap raw materials.
Local communities
Our new Constitution enjoins us to ensure that local communities benefit from resources in their local areas. Ideally, from a development and upliftment perspective, investors should be encouraged to employ locally, i.e. from the local areas, thereby benefitting local communities but also other measures such as requiring minimum procurement of goods and services from local sources would also assist in the industries that are linked to the diamond mining industry. The province of Manicaland for example, should by now be the diamond hub of the country, hosting industries that form the supply chain to and from the diamond mining in Marange. Instead, we have diamond cutting companies establishing far away in Harare.
Environmental protection
Our mining has to be friendly to the environment. Environmental protection is now an important ecological aspect of mining as part of a strategy for sustainable development.
Geological surveys
One glaring fact is that there is lack of knowledge of the mineral deposits across the country and that is a result of lack of research and geological surveys. The government itself has acknowledged that the last geological survey was conducted way back in the colonial era and that the discovery of diamonds was accidental rather than a result of proper exploration.
The dearth of research and seriousness on the part of government is demonstrated by the fact that the Geology Department at the University of Zimbabwe, the country premier centre of learning, was at some point closed for lack of funds and staff. Many of our geologists are working in other countries like Sierra Leone, South Africa, etc. There is need therefore for a comprehensive geological survey to ascertain the extent, distribution and estimate value of the country’s mineral deposits. Current talk of the Sovereign Wealth Fund and other instruments is not backed by proper knowledge of what the country actually has.
Transparency and accountability
There is absolute need for accountability so that our diamond deposits benefit the ordinary people. In this respect, I agree with the parliamentary portfolio committee on the need for parliamentary oversight to protect the interests of the ordinary Zimbabwe who should derive abundant direct benefits from this natural resource.
Development and Democratisation
The country’s mineral wealth should not be a curse but a blessing for its people. There is a critical link between the mining industry and development in that revenues gained from the industry should fuel development projects and support social services provision in local communities and across the country. The people must see development and growth in their areas not the wealth manifesting in private accumulation by the elite. Further, transparency and accountability should plug the holes through which a parallel economy has manifested over the years, funding and supporting anti-democratic practices. We believe diamond money played a critical role in the last election particularly with the militarisation of the industry and the underhand dealings that supported actors who manipulated the voters’ roll and electoral processes.
Demilitarisation
The militarisation of the diamond mining industry has created an unhealthy state of affairs politically. It has cemented the relationship between the ruling Zanu PF and the military who now have vested interests in the industry and therefore the continued rule of Zanu PF. It is clear that the investments by the military in the diamond industry have created a strong interest in ensuring the continuation of the status quo. It is also for that reason that the military and security services generally have veered towards Zanu PF politically and they played a critical role in ensuring a Zanu PF “victory” in the July 31 elections. I would encourage you, as intellectuals and researchers to pursue further research into the role of the military in Zimbabwean politics and the extent to which the diamond discoveries in the country have influenced this role.
Conclusion
The new Constitution now acknowledges the equitable sharing of natural resources, which is a good starting point for a new dispensation, especially in the diamond industry where a few people have benefitted at the expense of millions of people in the country. Chapter 14 of the Constitution speaks to the objectives of devolution and that the powers of the provincial, metropolitan and local authorities, key of which is to ensure the equitable sharing of natural resources.
This Constitution now empowers and gives more rights to local communities, particularly in areas such as those where our large diamond deposits are found, to demand their share of the cake. We need to measure our natural capital so as to better protect our social and ecological heritage which may entail temporarily leaving our resources in the soil and increasing regulation to ensure that broader objectives are respected.
The MDC’s policy position is that we must have a Diamond Act whose objective is to give ownership of diamond concessions to the State, the creation of a diamond agency, a diamond regulator and to define down-stream beneficiation and compensation for communities, among other things.
It would be remiss of me to leave this podium without talking about the urgent need to de-toxicate mining from politics. This will enable Zimbabwe to avert the very real danger of using national mineral deposits to prejudice or promote the interests of political parties as we saw in the last election where Zanu PF abused the country’s diamonds to steal an election in broad daylight.
Labels: DEBEERS, DIAMONDS, MDC, MORGAN TSVANGIRAI
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