Diamond revenue revised downwards

presented the 2012 National Budget.
Zimbabwe Mining Development Corpora­tion chairperson Mr Godwills Masimirem­bwa yesterday said about US$150 million was going to be remitted to the Treasury by year-end.
He attributed the low revenue to the effects of the illegal sanctions imposed on diamond mines by the Americans coupled with the embargo the European Union imposed on Zimbabwe.
“From January to September this year, we have remitted about US$113 million to Trea­sury from royalties and dividends, a figure that is way below the projected US$600 million,” he said.
“The main reason why the figures are low is because we have a limited customer base due to the illegal sanctions.
“That limited customer base is under threat of being punished by Ofac (Office of Foreign Assets Control) of America for buying Zimbabwean diamonds.”
By the end of December, Mr Masimirembwa said, the diamond sector would have con­tributed an additional US$37 million, bringing the figure to US$150 this year.
He said the trading environment was not conducive for the Zimbabwean diamonds to realise optimal prices.
“From January to September 2012, we have managed to realise US$542 288 512 from dia­mond sales. It is clear that the gross sales have failed to reach the projected US$600 million that the sector was supposed to contribute to the Treasury.
“The reason is because we are under siege from the US and the EU. The revenue from diamonds could have been higher, were it not that the ZMDC and the diamond mining com­panies are under these illegal sanctions.
“At the moment, the US and the EU markets are not available to us and those available to us are under threat from the Americans,” said Mr Masimirembwa.
Since diamond mining started in 2010 up to September this year, he said, US$1 226 270 000 was realised from the diamond sales with US$425 850 455 being remitted to the Finance Ministry.
Mr Masimirembwa said the diamond min­ing companies were currently operating at less than 50 percent capacity because of these strin­gent conditions.
The four diamond mining companies each have a capacity to produce 500 000 carats per month.
At two million carats per month in a normal trading environment, Mr Masimirembwa said, the diamond sector would have been grossing about US$140 million a month.
He said this would have been sustainable to have a national budget hinged on the diamond sector.
Mr Masimirembwa dismissed the allega­tions that there was no transparency in the handling of diamond proceeds.
He said Zimra, the Reserve Bank and Trea­sury had access to diamond sales figures.
“Allegations of mishandling of diamond money are totally false and mischievous. All the institutions that are interested in the sales of diamonds have the figures.
“There is total transparency in the handling of diamond money. It is also clear from the fig­ures that people of Zimbabwe are directly ben­efiting from the sale of diamonds through roy­alties and dividends.
“The only mining industry that is contribut­ing to the Treasury through dividends is thediamond sector. Other sectors like platinum have no dividends accruing to the Government,” said Mr Masimirembwa.
He said mining in these areas only benefited foreign owners.
This is contrary to Prime Minister Morgan Tsvangirai and Finance Minister Tendai Biti’s claims that there was no transparency in the sale of diamonds.
Mr Masimirembwa said from the revenue figures in the mining sector that were presented by the Chamber of Mines recently, it was clear that the diamonds sector contributed about 36 percent to Trea­sury.
Mr Masimirembwa dismissed claims that diamonds were selling at US$1 500 per carat on the world market.
“Some people talk of huge prices per carat. They are peddling fig­ures of about US$1 500 per carat. We challenge them to bring such customers to the ZMDC, the Ministry of Mines and Mining Devel­opment or the Minerals Marketing Corporation of Zimbabwe.
“These people who are against the indigenisation exercise are the same people who are peddling falsehoods about diamonds. They are just politicking. The same people have not bothered to tell us how much is coming from diamond sales at Murowa Diamonds but they are only concentrating on Marange,” he said.
Minister Biti was forced to review downwards the national budget in his mid term fiscal policy review to US$3,64 billion from US$4 billion, citing poor revenue inflows.
He also reviewed this year’s Gross Domestic Product growth pro­jection to 5,6 percent from 9,4 percent.