A war of words has erupted between Finance Minister Tendai Biti and Mines and Mining Development Minister Obert Mpofu over the remittance of money realised from the sale of diamonds with accusations and counter accusations flying thick and fast between the two ministers, according to the Zimbabwean Daily.
Presenting the mid-term fiscal policy statement on Wednesday last week [July 29, 2011], Minister Biti said there was no proper accountability of diamond money, a statement which has been described as “confused inflammatory rhetoric” by Minister Mpofu.
Minister Biti said there was no nexus between the country’s income from diamonds, its output and international prices and called for the expedition of the Diamond Revenue Bill, so that an audit trail of all diamond revenue would be carried out.
“The reality of Zimbabwe’s situation is that there is no connection between Zimbabwe’s income from diamonds, its output and international prices.
“Between January and June 2011, Zimbabwe exported 716 958.50 carats from its alluvial diamond mines in Marange (Marange, 357.819.80 and Mbada, 359 138.70).
“However, during the first half of 2011, only US$103.9 million of diamond export shipments was accounted for.
“Despite the huge production at Marange in 2011, no payment has been received by Treasury for income earned between 1 January and 30 June 2011. The only payment made in February 2011 was on account of 2010 diamond production.
“It is, therefore, imperative and urgent that Government concludes its work on the Diamond Revenue Bill. This Bill will create a proper legal framework dealing with the audit trail of all diamond revenue, its sharing and distribution, as well as the role of ZIMRA at both production and marketing levels,” he said.
Minister Mpofu, however, dismissed claims by Minister Biti that revenue generated from diamonds was not properly accounted for, saying everything was done above board.
“We are not surprised by the inflammatory remarks made by Minister Biti. At first he was denying receiving money from diamonds, now here he is, confirming that he received more than US$174m. A further US$27m was also remitted to Treasury recently from the Zimbabwe Minerals Development Corporation (ZMDC). We are and we will not be shaken by his sentiments for we now know his double-dealing. We have been remitting all the diamond proceeds accordingly and we have records to prove it.
“He is trying to play cheap politics. Remember these are the same guys who have been calling the diamonds bloody to block the certification process. He and his party are agents of imperialists who thrive on the people’s poverty and never wished the country well,” he said.
Minister Biti pointed out that wherever rough diamonds exist and were not managed transparently and openly, they become a major source of suspicion, conflict and national dislocation adding that there are times when resources, instead of being a blessing, could become a curse.
He said Zimbabwean diamonds continue to be arrested by problems associated with the Kimberly Process Certification Scheme as well as internal issues of transparency and accountability.
He said 18 percent of the alluvial diamonds mined at Marange are gem quality and 23 percent of Zimbabwe’s kimberlite diamonds are gem quality.
“For the past 12 months, the price of gems has ranged between US$5 000 for top quality gems and US$1 300 for low-grade gems. The average for industrial gems has been at least US$200.
“In 2010, declared total proceeds from diamond sales amounted to US$313,504,567.36. Of the above amount, US$48,458,968.78 was received as a dividend by Government in 2010, while US$41,631,487.79 was belatedly received in February 2011.
“The remainder of the amounts were paid directly to ZIMRA in the form of royalties, corporate tax, VAT and withholding tax.
“Needless to say, it is self evident from the above that a clear revenue allocation structure needs to be defined to avoid the current prejudice to the State,” said Mr Biti.
He said diamond receipts for the first half of 2011, arising from mining activities in 2011 are still being ascertained.
He added that there was a commitment by the Zimbabwe Minerals Development Corporation that realisations of up to US$167 million will be remitted to the Exchequer by December 2011 which falls short of the financing requirements on employment costs and other national programmes.
