HomeNewsMarange revenue dries up

Marange revenue dries up

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New measures by United States and the European Union requiring processors of rough diamonds to disclose the origin of the gems has put a squeeze on local diamond firms operating in Marange, an official said yesterday.

Zimbabwe Mining Development Corporation chairman, Goodwills Masimirembwa, told NewsDay in an interview that the new measures were meant to deal with the country’s diamonds that were finding their way onto the international market despite economic sanctions slapped on the companies.

Mbada and Marange Resources are on the US sanctions list.

“Our major diamond market is India as it is the largest cutting and polishing market. What America has done is to ask for the source of diamonds,” Masimirembwa said. “The new development started recently and the prices for diamonds have declined. Since May, our profitability declined and this has affected our remittance to government.”
Last month, Finance minister Tendai Biti revised downwards the 2012 Budget to $3,8 billion due to non-performance of diamond revenue.

Treasury had projected $600 million from proceeds of diamond sales by year end, but official figures show that only $41,6 million have so far been channelled to government coffers.

Masimirembwa said the government should enter into arrangements with other mining companies so that they could contribute meaningfully towards meeting government expenditures the same way diamonds were doing.

“We want to see the contribution of other companies such as Mimosa, Zimplats and Unki to government revenues. The government must enter into arrangements with mining companies to contribute to expenditures such as civil servants’ salaries. It’s only diamonds that are raising money for the government,” he said.

The mining sector currently accounts for over 60% of the country’s total exports driven by a strong performance in the platinum sector.

Masimirembwa said companies operating at Marange diamond fields — Marange Resources, Anjin Investments, Diamond Mining Company and Mbada Diamonds remit — 15% to the government for every sale made.

He said the first half of the year was characterised by low business and investor confidence.

Meanwhile, the government has approved a diamond policy which is expected to improve transparency in the extraction, processing and sale of the precious mineral, amid fears that proceeds from the sale of the gems could have been channelled towards structures outside central government.

Biti last month also proposed sweeping reforms in the mining sector which sought to plug revenue leakages in the capital intensive sector.

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