There is need to put in place a sound legal framework for the diamond sector, which is expected to rake in about $600 million by the end of the year, Parliamentary Portfolio Committee on Mines and Energy chairperson Edward Chindori-Chininga has said.
In a recent post-National Budget analysis report by the committee, Chindori-Chininga said diamond dividends receipts to the Treasury before Zimbabwe got the green-light from the Kimberley Process Certification Scheme to export its diamonds freely amounted to $122 256 491, but an additional $600 million was now likely to be realised.
“This is a welcome development as it will improve inflows into the fiscus,” he said.
“However, maximum benefits from diamond mining should be supported by a strong legal framework.
“Therefore it is imperative the government enacts the Diamond Act as well as review the Mines and Minerals Act.”
Chindori-Chininga said proposals to review the Mines and Minerals Act have been on-going for more than 10 years and finality should be brought on the table.
“A sound legal framework will promote transparency and accountability in the diamond sector as well as the rest of the mining sector,” he said.
Diamond operations in the Marange fields in Manicaland are spearheaded by a government- owned company, Zimbabwe Mining Development Corporation (ZMDC), which has joint ventures with Mbada Diamonds, Pure Diam of Dubai and a Chinese company, Anjin Investments.
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This year, ZMDC which started its operations in 2007 remitted $139 976 553,13 to Mines and Mining Development ministry while last year it gave the same ministry a dividend of $61 932 751,00.
Chindori-Chininga lamented diamond cutters were not able to get the product after paying $20 000 for licenses, which have to be renewed at the end of the year.
“A mechanism should be put in place to compensate people who have been disadvantaged through no fault of their own,” he said.
The committee proposed government keeps diamond and gold reserves for use during times of an economic recession, adding this strategy would help to boost Zimbabwe’s international standing financially.
The report noted budget allocation to the Mines and Mining Development ministry increased by 33,7% from $5 175 000 in 2011 to $6 921 000 in 2012.
“But it is saddening to note the ministry, which is expected to provide more than $1 billion to Treasury in 2012, was given one of the least allocations, totalling 0,17 % of the entire Budget,” observed Chindori-Chininga in the report.
