Murowa Diamonds’ bid to sell $9m rough gems hits snag

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MUROWA Diamonds (Pvt) Ltd’s bid seeking to compel government to issue it with a certificate to sell 18 kilogrammes of rough diamonds worth over $9 million at Antwerp market in Belgium, recently went up in smoke after High Court judge Justice Hlekani Mwayera dismissed the urgent application saying the matter was not urgent.

BY CHARLES LAITON

Given the impending sale of the rough diamonds on November 16, 2017, Murowa Diamonds approached the government through the Minerals Marketing Corporation of Zimbabwe (MMCZ) for a certificate in terms of the Kimberly Process Certification Scheme (KPCS) but the MMCZ refused to issue the certificate prompting the mine to approach the court for recourse.

According to court papers the MMCZ refused to sign the certificate because Murowa Diamonds was yet to honour a demand from the Ministry of Mines for payment of ground rental fees for diamonds in terms of Statutory Instrument 11 of 2012.

“This is an urgent application for an order that would facilitate the exportation from Zimbabwe of a consignment of rough diamonds in respect of which the respondents (Minister of Mines, Walter Chidhakwa and MMCZ) have wrongfully failed to issue a certificate in terms of the KPCS,” Murowa Diamonds commercial manager Edward Mazorodze said in his affidavit.

“Zimbabwe is a constitutional democracy that is free from rebel activity and armed conflict. As far as the applicant (Murowa Diamonds) is aware, there is no entity in Zimbabwe that produces or otherwise deals in conflict diamonds.

“Zimbabwe has been a participant in the KPCS since its inception. By becoming a participant, Zimbabwe assumed an obligation at international law to ensure that a KP certificate accompanies each consignment of rough diamonds that is exported from here.”

Mazorodze further said Zimbabwe was yet to promulgate any principal or subsidiary legislation that would prescribe the procedural requirements for seeking a certificate, adding according to his company’s experience, it approaches MMCZ to seek authority to export a consignment which in turn transmits the request to Chidakwa before the issuance of an export licence and a Kimberly Process Certificate.

“…..It is in the nature of the market for rough diamonds that even if the applicant were to tender the consignment at a subsequent date, by then, demand and therefore prices would have slumped on account of the November 16 to 22, planned sale period exhausting the appetite of many buyers,” he said.

“….The loss of this opportunity would be an irredeemable loss to the country’s foreign currency reserves, on account of having to wait until the next sales window. If the applicant does not sell the consignment at the November 16, 2017 planned sale date, it will suffer irreparable prejudice to its projected cash flow which would leave it unable to function.

“The livelihoods of roughly 600 employees would be compromised as the applicant would lack the resources to carry the wage bill for so long to make the continued employment of many unsustainable.”

Just last week the mine sued the government over nullification of the payment of $3 000 per hectare, as ground rental fee for diamonds, arguing the levying of such fees was in violation of the Mines and Minerals Act.