THE Parliamentary Portfolio Committee on Mines and Energy has urged the lifting of sanctions on some diamond firms in the country saying the restrictions fuelled corruption in the trade of precious stones thereby prejudicing Treasury of revenue.
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Speaking at a preparatory workshop in Boksburg, South Africa, ahead of a Kimberley Process Certification Scheme meeting tomorrow, Committee chairperson Edward Chindori Chininga said the embargo had resulted in “unprecedented economic prejudice both to government and its citizens”.
“This is so because the KP has allowed itself to digress from its noble apolitical and development oriented agenda; and is regrettably promoting devastating political and economic vested interests of stronger States, particularly Western countries,” he said.
KP is meant to eradicate the trade of conflict diamonds.
The Minerals Marketing Corporation of Zimbabwe (MMCZ), which is a KP implementing authority, Zimbabwe Mining Development Corporation (ZMDC) and affiliated partners were under sanctions, particularly from the United States and the European Union.
“The playing field for KP implementation capabilities is uneven at the expense of Zimbabwe,” Chindori Chininga said. “This is further worsened by the fact that monetary transactions are restricted by the USA Office of Foreign Assets Control (OFAC) that blocks and freezes or confiscates all US dollar denominated transactions by ZMDC and MMCZ. The prejudice currently being suffered by the country as a result of the sanctions is huge; diamonds are being traded at about 25% below market.”
He said international courier companies such as Brinks have refused to transport Marange diamonds because of sanctions forcing traders to hire private jets or use commercial airlines.
“International insurance companies do not accept Marange diamonds for insurance because of sanctions,” Chininga said. “Payment for these diamonds can only be made in Rands or Hong Kong dollars with massive exchange rate costs and margins because of the size of the transactions. This, however, does not apply to Murowa diamonds owned by RioTinto as it is not facing any United States financial restrictions or financial sanctions on its diamond exports.”
He added: “It obviously makes the job of the Minister of Finance (Tendai Biti) difficult in raising the required financial resources for the national budget requirements. The mines had committed to support a national budgetary position of about 600 million dollars in the 2012 budget which to date has not been achieved.”