There were reports recently that alleged that over $100 million, which was part of the revenue accrued from the trading of Marange diamonds last year had gone missing.
Finance Minister Tendai Biti, who is the secretary general of Morgan Tsvangirai’s MDC was quoted by a local weekly, The Standard as saying that his ministry raised the alarm after it received a schedule from President Robert Mugabe’s office written by the Minerals Marketing Corporation of Zimbabwe (MMCZ) claiming that $170 million had been given to treasury yet only $64 million had been received.
“We got a schedule from the office of the President written by MMCZ that claimed treasury had been directly and indirectly given $170 million from the sale of alluvial and kimberlite diamonds,” Biti was quoted as saying.
“Treasury only received $64 million from the sale of alluvial and kimberlite diamonds.”
Mines Minister Gift Chimanikire, who is also from Tsvangirai’s party was quoted as saying that he was not aware of the transaction.
He said all he had in his office was a summary of the movement of the revenue obtained from the sale of diamonds last year and January this year.
Biti took the issue further when he called for an investigation of the non-remittance to Treasury of $174.2 million (not $170 million as he had said before) from diamond proceeds by diamond companies.
A local daily, Newsday reported that the minister had instructed Zimbabwe Revenue Authority (Zimra) Commissioner-General Gershem Pasi, Accountant General Judith Madzorera and the Comptroller and Auditor General Mildred Chiri to make an audit of the books of the relevant parastatals such as the Zimbabwe Mining Development Corporation (ZMDC), which had partnered some foreign companies to mine diamonds in Marange.
Biti said there was a serious lack of transparency and accountability in the sale of the country’s alluvial diamonds from Marange, as well as proceeds from Kimberlite diamonds in Murowa and River Ranch diamond mines.
“Diamond sales and remittances have lacked transparency, creating misconceptions on management of public resources and the 2011 Budget,” Biti was quoted as saying in Parliament.
“Our cash flows would have been manageable had we received proceeds from the third to fifth diamond sales, and information on hand as supplied by ZMDC indicates that an amount of $174.2 million should have been remitted to Treasury, while an additional $125.8 million realised in January 2011 remains outstanding.”
Murowa was located in the south-western part of Zimbabwe. The mine, which operated as a small open pit mine was owned by Murowa Diamonds, incorporated in Zimbabwe.
Rio Tinto had a 78 percent interest in the company, while the remaining 22 per cent interest was owned by Riozim.
Rio Tinto formerly held an interest in Riozim, but it divested its shareholding in 2003 in an empowerment transaction that saw the emergence of the company as an independent mining house in Zimbabwe.
River Ranch was owned by Aujan Group’s subsidiary, Rani Investment.
The River Ranch kimberlite was discovered in 1975 whilst following up on an alluvial diamond discovered in a stream draining the kimberlite.
Biti said Treasury only managed to reconcile $62.1 million, including accruals to both Zimra ($17.7 million) and the Exchequer account ($42.9 million).
“Clearly ZMDC and MMCZ are not remitting in full the revenues which they have themselves declared as due to the fiscus,” he was quoted as saying.
However, the state-run Herald Newspaper, which by and large is seen as a mouthpiece of President Mugabe’s Zanu PF reported that the Treasury was benefiting from sales of diamonds that had surpassed $170 million this year alone, despite Biti's claims that diamond dividends were not flowing into the national fiscus.
Documents obtained by the paper “revealed” that the Treasury would benefit from at least $174 million in diamond sales for January to February 7 alone.
The paper said some of the money had already reached the Treasury, although the minister said that the country had not benefitted from diamonds.
The funds were from sales by Mbada Diamonds and Marange Resources (formerly Canadile Miners), Herald reported.
ZMDC chairman Godwills Masimirembwa was also quoted by Herald as saying that $76 million would be paid to Treasury before the end of February.
The Herald further quoted unnamed sources as saying that Biti was trying to force the Mines and Mining Development Corporation into revealing how Zimbabwe sold its diamonds, which could result in the contracted foreign firms being slapped with Western sanctions.
So, the fighting continue, and it was only a matter of time before the world and indeed government employees (that were calling for the diamond revenue to fund their wage bill) get to know what exactly had transpired in Zimbabwe as far as diamond revenue was concerned.
One interesting revelation that had also emerged from this fight was that Zimbabwe had conducted two diamond sales between January and February 7 this year.
It also remained to be seen how the Kimberley Process would react given that the trade body had not yet given the southern African country a green-light to resume diamond exports.
The country’s diamond exports were suspended on allegations of gross human rights abuses in Marange by state security officials on illegal miners.
Mathew Nyaungwa, Rough&Polished, from Namibia
