Finance minister Tendai Biti is pushing for a raft of reforms that could clip Mines minister Obert Mpofu’s wings and bar the army from running diamond mines, to improve transparency in the mining of the precious mineral.
Commenting on the proposed Diamond Policy drafted by the Mines and Mining Development ministry, Biti on Tuesday proposed several changes on the blueprint that could divide Cabinet ministers along political lines.
Cabinet is next week expected to approve the policy, which seeks to ensure gems contribute towards economic development.
Biti said the government should create a new State-owned diamond entity in a development that could bust economic sanctions imposed on the Zimbabwe Mining Development Corporation (ZMDC) — a government investment vehicle.
ZMDC formed joint venture partnerships to establish Mbada, Marange Resources and Diamond Mining Company.
“The advantage of the proposed arrangement is that it gives room for specialisation in diamonds,” Biti said.
“ZMDC currently focuses on all minerals, hence there is no room for specialisation.
“Whereas ZMDC is under sanctions, the proposed diamond agent will not be a victim of restrictive measures.
“Furthermore, the law should make it clear that co-ownership and investment in diamond mining should be vested solely in ZMDC and not any other government arms, such as security forces.”
Clearly frustrated by lack of revenue remitted by Anjin, a diamond mining company jointly owned by the military and Chinese investors, the Finance minister said the creation of alternative exchange for gems would also promote transparency.
“The idea to establish a diamond bourse in order to obtain optimum value from the sale of diamonds in Zimbabwe is fully supported,” Biti said.
“Furthermore, a diamond exchange that will be regulated by the Securities Act should be established.”
Biti said the country’s revenue collector should monitor proceeds raised from the gems at every production stage.
“The draft Diamond Policy states that there shall be access to diamond trade and financial records of all companies involved in diamond activities by the Ministry of Mines and Mining Development, or its appointed agency and other relevant arms of the government,” he said.
“It would, however, be appreciated if the role of the Zimbabwe Revenue Authority is clearly spelt out from the production up to the marketing of diamonds.”
On the creation of the country’s first sovereign fund, the Finance minister could be headed for a clash with his Indigenisation and Empowerment counterpart Saviour Kasukuwere, after he proposed that treasury should oversee creation of the fund.
“Currently all resources collected by government agencies are deposited into the Consolidated Revenue Fund for appropriation by Parliament as provided for under the Appropriation Act,” Biti said.
“Treasury, thus has to create a Sovereign Wealth Fund, where some of the funds will be deposited, in terms Section 6(d) of the Public Finance Management Act (22:19).”
Biti last week said failure by Anjin to pay proceeds from diamond sales to Treasury would impact negatively on the $4 billion National Budget where $600 million was expected from the sale of the precious mineral.
Figures released by the ministry showed that Mbada Diamonds topped the list of local diamond exporters accounting for $87,6 million during the first quarter of the year and Anjin was placed second after selling $72,3 million worth of gems.