Zimbabwe’s Finance Minister Tendai Biti was quoted as saying in July 2010 that the government would like to have all alluvial diamond mining conducted by the state.
He said that private companies the government had established joint ventures with in Marange were not sharing the wealth, hence the need to nationalise.
“There is consensus in government that there has to be a new Diamond Act that says alluvial diamond mining in Zimbabwe be conducted by and through the state,” Biti said.
Indigenisation and Empowerment minister Savior Kasukuwere also said last year that the country’s cabinet had “agreed unanimously" to own 100 percent of all diamond mines under the controversial Indigenisation and Economic Empowerment Act.
He said the broad principle that had been set up by government was that alluvial diamonds belonged to the state and they should benefit the people of Zimbabwe.
Kasukuwere noted that foreign companies that had been awarded claims would not be affected by the move.
Although the two ministers differed on the laws under which the process would be administered, they agreed on the need to nationalise (Marange) alluvial diamonds.
The Indigenisation and Economic Empowerment Act that forces foreign miners to surrender a 51 percent stake of their operations was currently being implemented while the crafting of a new Diamond Act was yet to be passed in parliament.
A year has elapsed since this talk of nationalising alluvial diamond mines in Zimbabwe began and it appears that there was never such an agreement, as officials from the two main political parties in the coalition government now differ over the matter.
It started with Eddie Cross, a senior economic adviser to Prime Minister Morgan Tsvangirai and an MDC Member of Parliament (MP) when he “proposed” recently that all alluvial diamond deposits be taken from private, mainly Chinese, investors and handed to the state as they were declaring much less than they were making.
"The solution to all of this is a proposal made to Cabinet last year that the whole of the Marange deposits should be nationalised formally and brought under government control," said Cross.
"Everyone who is currently on site extracting diamonds formally and informally must be removed, the area fenced and guarded by the armed forces."
Mines Minister Obert Mpofu, who is a member of President Robert Mugabe’s Zanu-PF party scoffed at this "reckless and irresponsible" suggestion.
"I will not allow him (Eddie Cross) to destroy the mining sector with such strange ideas," Mpofu said.
He said if the MDC continued pushing for the idea, Zanu-PF would drive for the nationalisation of the entire mining industry.
However, Cross countered saying that Mpofu should not “take us for granted or think that we are stupid and ignorant about what is taking place”.
He said Mpofu’s statements were so misleading and incorrect that he cannot be allowed to get away with them.
“Nationalisation of the Marange fields is official government policy. It was discussed last year in Cabinet and again recently and Cabinet resolved to do just that to get full control of the diamond fields for the national benefit,” Cross said.
“The reason was quite simple – the situation at Marange is neither transparent nor accountable and completely out of control. The resource is unique – all the people mining there have had to do is dig soil and put it through a separator and diamonds in massive quantities are produced.
“The proposal was debated in Parliament on the 27th of October and was passed by a significant majority. Mpofu has no right to challenge Cabinet or Parliament; he is the officer of Government who is in fact responsible for implementing the decisions of these superior bodies of the State.”
The MDC said senior Zanu-PF officials were opposed to the proposal because they were enriching themselves by making private deals with foreign miners in exchange for rights to the fields and protection.
The Rapaport Diamond Trading Network (RapNet), which recently extended a ban on Marange diamonds despite a decision by the Kimberley Process (KP) to allow resumption of diamond exports from Mbada Diamonds, Marange Resources and Anjin said that the gems were illegal for trade. “We hereby publicly warn members of the diamond trade that KP does not certify against human rights abuses and KP certification does not ensure that diamonds are not involved in human rights abuses,” said the group.
It alleged that the funds generated from the sale of Marange diamonds were not properly accounted for, adding that it was likely that they would be used to fund human rights violations in Zimbabwe.
However, as the West seek to isolate Marange gems, some Indian buyers and miners from China were said to be stampeding to secure mining deals.
A government official recently said that Zimbabwe had signed transactions estimated at between $700-million and $750-million with Chinese investors for access to diamond mining and processing.
With such capital flowing into Zimbabwe coupled with allegations of some senior Zanu-PF officials, enriching themselves by making private deals with foreign miners in exchange for rights to the fields and protection, one wonders if the nationalisation of Marange mines will be a reality, as much as foreign investors view it as an anathema.
The question that many would ask, is why the volte-face?
Could it be a classic case of a Damascus moment for some government officials, who had last year agreed to nationalise the alluvial diamonds, only to realise that their cash cow would be muzzled?
Nationalisation or not the issue at stake here is that of accountability and transparency.
Harare should take the matter seriously if it wants Marange diamonds get unquestionable global acceptance as well genuinely benefit the recuperating but troubled economy.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
