The mining and trading of diamonds fr om Marange had been shrouded in secrecy as some government officials argued it was a way of protecting buyers fr om potential U.S and the European Union (EU) sanctions.
Journalists, including this writer, tried many a times to get production and sales figures fr om Zimbabwe’s mines ministry but to no avail.
“Who is asking for transparency? It is the same person that imposed sanctions on us, because transparency is about knowing the bank that the money has come through, knowing the companies that are buying our diamonds for the countries that imposed sanctions on us to pounce on them. We are not foolish,” the then mines minister Obert Mpofu told CNN in March 2012.
Given the mines ministry’s refusal to provide production and trade figures, many suspected that was a way of avoiding accountability.
The matter was even exacerbated by the former finance minister Tendai Biti who constantly complained about the truncated flow of diamond revenue to the Treasury despite the fact that the government owned part of all diamond companies in Marange.
He was forced to cut Zimbabwe’s budget in 2012 to $3.4 billion from $4 billion after receiving $41 million from $600 million that he expected from diamond sales.
However, his colleagues from President Robert Mugabe’s ZANU PF party in the then government of national unity (GNU) as well as the diamond miners denied allegations of poor remittances.
“It is either he (Biti) is untruthful, incompetent or illiterate. He made the blunder and miscalculated. He must be man enough and admit that he made a mistake,” said Anjin board member Munyaradzi Machacha in 2012.
“He must tell the nation wh ere the money we gave to Treasury is.”
Interestingly, months after the end of the GNU, the ZANU-PF led government was now ‘livid’ over the poor remittance of diamond revenue from Marange as it battles to shore up the ailing economy.
President Robert Mugabe recently said his government was undertaking wide-ranging investigations on the operations of mining companies in Marange.
He said if the government discovered that it was prejudiced in any way, then heads would roll.
“We will be watching and watching [even in Marange],” he was quoted as saying by state-media. “[We want to see how they have been operating and if we unearth corrupt activities] then people will answer for it I can tell you.”
His mines minister Walter Chidhakwa also said the government would rather stop all diamond mining in Marange than let miners continue fleecing the country of millions of dollars through understating the real value of the stones they extract.
“We used to watch close circuit television yesterday, now we watch the footprint,” he was quoted as saying by the state-owned Herald newspaper.
“If the footprint in Marange is 10 to 15 percent gem and if you come to me and say ‘No, we just found two percent gem,’ you are out.
“We don’t need you in Zimbabwe because you are deviating from the footprint and we know it’s deliberately happening. We have lost a lot of our diamonds.”
Chidhakwa said just before the last Antwerp auction, one diamond valuer had set the price at $400 per carat but this rose to $1,000 during the auction and ended as high as $18,000 per carat.
“So, tell me wh ere the problem is? The guy who is valuing diamonds at $400 must either be a terrible valuator or he was taken aside and told not to give the right price,” he said.
These statements from Mugabe and his mines minister clearly show that it was no longer business as usual, as Zimbabweans expected the government of the day to deliver on its lavish promises made during last year’s election campaign.
Sadly, no budgetary support had been extended by friendly countries such as China, despite high hopes that they would do so.
The International Monetary Fund and the World Bank were also non-committal.
This, therefore, explains why the government was now piling pressure on the diamond miners to deliver.
The lifting of sanctions by EU on Marange diamond companies last September had also paved way for Antwerp tenders, which are not only transparent but were attracting better prices for the gems.
AWDC chief executive Ari Epstein said recently in an address to a seminar organised by the Zimbabwean parliament that for the first time in four years, a transparent and appropriate return on investment for the government had been achieved.
He said prior to trading in Antwerp, Marange goods were sold in Zimbabwe but also in other diamond centres, at an average price of $47 per carat, resulting in an average return on investment for the Zimbabwean treasury of $7.05/ct.
By contrast, Antwerp, due to its critical mass of buyers, achieved an average price of $ 80/ct, or $12 per carat in royalties for the Zimbabwean Treasury.
“If all sales were to go through Antwerp, Zimbabwe would gain more than $400 million in extra revenues, resulting in an increase of $60 million of royalties per year,” it said.
“Naturally, the total sum of money flowing back to Treasury would be exponential of this figure.”
Interestingly, Mbada Diamonds, one of the leading gem producers in Marange, said the Zimbabwean government should stop the auctioning of diamonds in Antwerp.
Company chairperson Robert Mhlanga said the selling of diamonds in Antwerp was costly and rewarded Zimbabwe’s European Union foes.
“I have strong reservations about Antwerp because they are our yesteryear enemies. We have actually reeled under sanctions, thanks to Brussels and for us now because they have claimed to have lifted sanctions and we run to them. Personally, I have my own reservations,” Mhlanga told a parliamentary committee.
He said Zimbabwe should instead set up its own diamond exchange to plug revenue losses in commissions paid to the Antwerp World Diamond Centre.
“I don’t think that is good. I strongly believe that Zimbabwe as a country we have capacity to hold auctions in this country wh ere hundreds of companies can attend,” Mhlanga said.
“There is a multiplicity of benefits when you invite people to do tenders in your own country. You bolster your own tourism industry… I don’t believe in appeasing a foe.”
He did not say how much commission the miners were paying.
Ironically, Mhlanga was recently appointed as a board member of the Dubai Diamond Exchange (DDE), which would also soon conduct its ‘first’ tender of Marange diamonds.
His statement could be viewed as hypocritical given his appointment to the DDE board and also someone who was used to conducting tenders that are not open for public scrutiny.
Antwerp tenders promote transparency, which Zimbabwe wants now to boost its empty coffers.
Despite years of seclusion and clandestine diamond trade, Marange miners and the Zimbabwean government had a lot to gain from Antwerp tenders.
The reputation of their diamonds will also improve in as much as they will gain financially as the February tender had already proven.
So, until the country establishes its own transparent diamond tenders, it would be wise for them to stick with Antwerp.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
