Editorial Comment: Diamond mining needs cleaning up

zimplogoTHE refusal by five diamond firms operating at Chiadzwa to commit money to the $50 million Zimunya-Marange Community Share Ownership Trust highlights a deepening crisis at the Manicaland reserve.Mbada Diamonds, Marange Resources, Anjin, Jinan and Diamond Mining Company told a parliamentary committee recently that they were unaware the trust existed.

They said they were not told to contribute $10 million each to the trust but $1,5 million each over a period of five years. Some of the five said they voluntarily donated figures around $200,000 as “courtesy” not as a statutory obligation consistent with all community share ownership trusts.

The confusion over the status of the trust indicates a broader challenge over our diamond mining sector, an area we, it turns out, wrongly thought would provide the tonic we desperately need to stimulate socio-economic growth and development. Seven companies are licensed to mine diamond in Marange fields. They account for more than 80 percent of the country’s diamond output.

Before this, they were failing to answer questions over how much they have earned since they started mining operations there. Furthermore, they, save for one or two, are refusing to invest in the exploitation of deeper-lying kimberlites. As it stands, we don’t know how much money they have raised, after selling how many carats of diamonds and at what price.

We have a suspiciously opaque system down there, which does not inspire national confidence in the operations of entities entrusted with the exploitation of a commonly owned resource for national good.

We don’t agree with the five when they say they are unaware of their commitments to the trust, a whole 20 months after President Mugabe officially launched it. What do they think they were doing when they hosted the highest office in the land, and tens of thousands of villagers at that event?

Government ensured that there is substantial indigenous ownership of all the mining companies at Chiadzwa, after recognising how strategic the diamond resource is to the economy. Thus, we expected the five companies to appreciate the importance of community share ownership trusts better than foreign and white investors.

However, we seem to have a group of irresponsible, dishonest investors who not only repudiate their pledges but also refuse to invest in long term operations, and most worryingly make it impossible for government – a 50 percent shareholder in all the operations at Chiadzwa – to get an idea how much they are earning through selling the key national resource.

It is sad to point out that the implications of their refusal to meet their pledges to the trust are far-reaching. They threaten the whole indigenisation and economic empowerment drive, one of whose pillars are community share ownership trusts.

If indigenised companies that are cheaply mining our diamonds are refusing, foreign-owned Vumbachikwe Mine in Gwanda would appear justified to do the same. That is why the recalcitrance being demonstrated by the Mbada Diamonds, Marange Resources, Anjin, Jinan and Diamond Mining Company is dangerous, thus must be stopped.

As the five refuse to co-operate, Anglo Platinum is funding our most successful community share ownership trust in Shurugwi. Mimosa Mine is doing the same in Zvishavane. Zimplats is doing something in Mhondoro-Ngezi.

We are glad though, to have a strong responsible minister in Cde Walter Chidhakwa who looks committed to cleaning up the mess at Marange. He, as we also are, is unhappy with the little revenue – about one seventh – which is going to Treasury. The minister warned that government could shut down Marange if the state of affairs continued, citing possible mafia-like collusion between the miners and merchants in fixing low prices.

He admits that he has more to understand about diamond mining and trade. Soon, he would call the miners to account from an informed standpoint.

“We are reorganising our diamond sector in a way to consolidate the systems there,” President Mugabe said at his belated 90th birthday party hosted by civil servants on Thursday.

“We are going to say good-bye to some of the mines there so that we consolidate and just have one mining group in which the state will be the main company. We will be investigating operations in Marange to find out how things have been going on there and if any corrupt activities are detected, people will answer for it.”

We cannot have a resource of Chiadzwa’s international significance benefitting the elite at home and their contacts abroad when Zimbabweans are collectively looking to diamonds from there to drive economic recovery and growth.

Mbada Diamonds, Marange Resources, Anjin, Jinan and Diamond Mining Company must meet their pledges to the Marange community. That is at a micro level; at a macro stage, they must also understand that Zimbabwe is looking east for the much-needed fillip to get the economy up.

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