Diamonds production figures and revenues reportedly earned from gems exploited in Marange – Manicaland, might have been grossly exaggerated as it emerged there was no accountability and transparency in the handling of the precious mineral while record keeping was shambolic, Business Weekly can reveal.
During the height of alluvial rough diamond mining in Marange, authorities in the old dispensation are on record that Zimbabwe was producing over 25 percent of the world diamond production, while former and late President Mugabe revealed the country could have lost over US$15 billion through some shade deals.
However, despite reports that Zimbabwe could have produced such quantum of diamonds in this close to US$100 billion industry, it still has nothing to show as it is dogged by acute foreign currency shortage to oil industrial operations, generate electricity, import fuel and other essential consumables.
Government then booted out Anjin Investments, Mbada Diamonds, Marange Resources, Diamond Mining Company, Kusena, Gye Nyame and DTZ Ozgeo about four years ago on strong allegations they were prejudicing the State of millions in potential revenue through understating earnings and not declaring dividends.
All mining concessions, except those held by Anjin Investments, were then merged and a mining arm, Zimbabwe Consolidated Diamond Company (ZCDC), was created to start exploiting the resources on behalf of the State.
However, a visit to Chiadzwa Diamonds Fields in Marange last week under a ZCDC sponsored tour, revealed that Anjin, whose shareholders are Anhui Foreign Economic Construction Company Ltd of China (Afecc) and Matt Bronze, were back on the ground doing some exploratory work.
Government is, however, methodically reorganising diamond mining in Zimbabwe under a Diamond Policy that now allows four companies to effectively mine diamonds and these are: ZCDC, Anjin Investment, Alrosa of Russia and Murowa Diamonds. Any other firm wishing to mine diamonds in Zimbabwe has to come through either of the four under partnership arrangements.
Mining Lacked Accountability and Transparency
In an exclusive interview with Business Weekly at ZCDC’s crushing and recovery factory (formerly Mbada complex), the company’s acting chief executing officer Roberto De Pretto, revealed that shambolic records keeping resulted in the country failing to demand what was due to it.
He said most of the figures that were being made public on diamond output were not backed by empirical facts from the major companies in the diamond mining business. I think it is a beat of an exaggeration; the diamonds during that time were never quantified.
“We do not know where that was coming from (the figures) since we have not seen evidence to that. So you compare our production with Botswana, which is one of the biggest producers outside Russia, they produced about 32 million carats.
“So I really dispute those numbers and the way they were calculated because there was no accountability during that time anywhere. Diamonds were mined and there were no clear records and accountability to what was recovered and submitted for sale to MMCZ. There were a lot of unrecorded transactions,” said Pretto.
The Missing US$15 billion
The reportedly missing US$15 billion caused much hype in Government, with authorities calling for the launch of a forensic audit of the seven firms that operated in the Chiadzwa diamond fields.
Government said it did not receive meaningful returns from Chiadzwa diamond fields and that private companies mining could have robbed the State as evidence revealed less than $2 billion was remitted from diamond proceeds and those seconded by Government to work with private miners had failed to account for the gems.
However, Pretto revealed this week that the nature of operations in Marange and the quality of the gems extracted during that time could not have seen Zimbabwe earning such figures way ahead of mining giants in Southern Africa that have more advanced operations such as Botswana.
“Absolutely the US$15 billion figure is an exaggeration … until you get the facts from the grades we are mining, you cannot see those figures being accurate. I was not around in 2005 and 2006, but I do not know where they got those numbers from,” said Pretto.
The future of Diamond Mining
Given the sensitivity of diamond mining operations and in some parts of the world the minerals having caused wars and serious conflicts, Pretto said the future of diamond mining in Zimbabwe hinged on strong legislative structures and enforcement processes. He, however, said the diamond policy had potential to close many holes that have seen diamonds not benefitting Zimbabwe, but lining individuals’ pockets.
“The diamond policy is now in place and all companies mining diamonds have to comply with the legislation. All diamonds recovered have to be monitored by the ministry (of mines and mining development), we have to have accounting systems in place. All diamond companies wishing to start sales have to work with the ministry and ourselves.
“There should be systems in place to ensure the diamonds are accounted for, systems are in place to control the movement of diamonds and also in terms of the Kimberly process we are fully compliant so that diamonds are known where they are coming from and where they are going and that accountability will ensure that what happened in the past will not happen again,” Pretto said.