HomeNewsTreasury calls for quantification of diamond deposits

Treasury calls for quantification of diamond deposits

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Finance minister Tendai Biti has called for the “monetary quantification” of Zimbabwe’s diamond deposits, particularly in Chiadzwa, an alluvial-diamond-rich area of Marange in eastern Zimbabwe, which is seen driving the country’s diamond industry in the outlook.

Zimbabwe’s head of Treasury implored responsible authorities to “finalise” the issue with urgency given Chaidzwa’s “huge potential” and diamonds’ potential contribution to both export and fiscal revenue.

Although experts project that Chiadzwa may generate $2 billion a year, technical prospectivity remains limited, rendering the estimates unscientific.

The “treasure island”, discovered by villagers some six to seven years ago, is expected to lift the country’s diamond output this year with an output target of 2,7 million carats, while River Ranch and Murowa Diamonds would account for 300 000 carats, bringing the national total to 3 million carats.

Next year, diamond output is seen climbing to 4 million carats, led by Chiadzwa where three companies have been licensed to operate under joint venture arrangements with government, Mbada Diamonds, troubled Canadile and a Chinese company known as Anjin China.

“The quantification of diamond deposits needs to be finalised,” Biti said, naming five other issues as requiring redress.

These include leakages and arbitrage, Kimberly Process (KP) certification, the awarding of contracts, awarding of concessions, beneficiation, policing and anti-smuggling standards, environmental concerns, compensation and relocation of affected mining communities, the regulatory framework and geological surveys.

The issues were raised by the Parliamentary Portfolio Committee on Mines and Energy this year, but remain shelved.

Biti lamented that lack of transparency on the part of Canadile had resulted in criminal prosecutions, adding to the “current opaqueness with regards to the mining of diamonds”, technically a big minus to the contested certification of Chiadzwa diamonds.

He also said this had raised false expectations regarding the amount of diamond revenues earned from the three public auctions of Chaidzwa diamonds conducted after the KP cleared the gems for sale in August.

The first two auctions, he said, raised $85 290 124,70, of which $42 million accrued to government.

Government earnings comprise dividends and resource depletion fees paid directly to Treasury, as well as royalties, Vat, non-resident shareholders’ tax and Vat on the Minerals Marketing Corporation of Zimbabwe (MMCZ) commission that Zimra collects on its behalf.

MMCZ also collects a commission, as the country’s minerals marketing authority.

“The large magnitude of resources retained by MMCZ as commission should also accrue to central government as MMCZ funding should be a function of a government-approved budget,” Biti said.

“In short, they (MMCZ) are getting a lot of our money and we want our pound of flesh.”

He said he had already requested MMCZ to remit $252 121 89 that it received as commission from the second auction in September.

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