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Bianca Mlilo/Oliver Kazunga, Business Reporters
ECONOMIC commentators have hailed the order by the government for nine diamond mining companies at Chiadzwa to stop operations after they resisted a move to consolidate their work.
Mines and Mining Development Minister, Walter Chidhakwa on Monday ordered all the mining firms at the diamond fields “to immediately cease mining activities and vacate the mining concessions they were operating on”.
The development means there has been an immediate re-organisation of the Zimbabwe Consolidated Diamond Company (ZCDC) into a wholly state-owned entity from the previous proposal of a joint venture between the government and the nine diamond mining firms.
Minister Chidhakwa said the companies’ special grants had also expired and had not sought to renew them.
Economic analyst Bongani Ngwenya commended the government for taking such a bold stance which he said was a step towards restoring transparency in the diamond industry.
“Zimbabwe is a mineral-based economy in terms of export. The government was not receiving its dues in terms of revenue and could not even get the little revenue it should have received through taxes,” he said.
Ngwenya said the decision was in line with the 2016 monetary policy statement in which the Reserve Bank of Zimbabwe governor, John Mangudya, condemned externalisation of export sales proceeds.
“The government’s attempt in light of the current liquidity crisis is good but the mechanics of doing it are something else. This can be a recipe for disaster as far as the level of corruption is concerned,” Ngwenya added.
“The government should have come up with a government-owned entity like Hwange Colliery Company Limited for the mining sector where it has a substantial stake.”
Affirmative Action Group (AAG) national vice president, Sam Ncube, said the move by the government will bring order and promote accountability and strategic management of the country’s gems.
“It would appear there’s no accountability and control over our diamonds. And because of lack of accountability and transparency, it seems some of the diamonds have been looted, depriving the country of a major economic transformation through the diamond industry,” said Ncube.
“This is in sharp contrast to what has happened to other diamond producing countries such as neighbouring Botswana where the resource has anchored that country’s economy.
“As AAG, we strongly support the stance that the government has taken on diamond companies in Manicaland. Some of the diamond firms in the country are owned by foreigners who’ve been looting and selling our diamonds for a song because of lack of accountability and transparency.”
The affected mining firms are: Anjin, DMC, Jinan, Mbada, DTZ-OZGEO, RERA, Gye-Nyame, Kusena and Marange Resources.
There has been concern over declining payments to the government and investment pledges defaults with official figures showing that benefits from the diamond sector have been falling gradually since 2011.
In 2011, the government received payments from the diamond firms amounting to $168.5 million, which declined to $142.4 million in 2012 and $93.2 million in 2013.
In 2014 payments to the government amounted to $84.3 million, which further declined to $23.4 million last year.
Minister Chidhakwa charged the companies for making investments that were not adequate to go beyond mining the alluvial resources at Chiadzwa.
“Anjin pledged as per the joint venture agreement to invest $132.2 million, at the moment we don’t know how much has been invested because the company has never given us audited financial accounts and we’ve asked for them and we haven’t received any audited accounts from them.
“DMC pledged to invest $50 million and $41 million was actually invested. Jinan $200 million was pledged and $137 million was invested. Mbada Diamonds a $100 million was pledged and $48 million was invested,” said Minister Chidhakwa.
Online Reporter