Veil of secrecy discarded in diamond mining

The Sunday Mail

Ishemunyoro Chingwere
Business Reporter

The diamond policy adopted by Government during last week’s Cabinet meeting, which is meant to spearhead development of the multi-billion dollar sub sector, will be anchored on transparency and will see all players being mandated to install real time access technology for their operations.

Mining is a key pillar of the economy and annual diamond production is envisaged to reach 10 million carats, up from 1, 8 million carats achieved last year.

The Ministry of Mines and Mining Development is working towards growing the country’s overall mineral exports to USD12 billion annually, according to official documents.

While Botswana has managed to anchor its economic growth on diamond production, local gems have in the past failed to provide the revival spark largely due to a veil of secrecy which was a source of corruption in the previous dispensation.

Prior to the consolidation of diamond mining in 2016, Government received a measly $282 million in six years through taxes and dividends from all diamond firms that operated in Chiadzwa. This was due to leakages.

In an interview with The Sunday Mail Business on Friday, Mines and Mining Development Minister Winston Chitando, said the policy will cast light on all diamond mining activities, in real time, thus extinguishing underhand dealings and under declarations.

Under the new diamond policy, Government will — through ZCDC, own 46 percent of all diamond operations in the country. Five percent will be reserved for local communities while the remaining 49 percent is open to any investor.

“Each diamond mine, at its own expense, will be required to establish real time site monitoring access of its operations to the Ministry of Mines and Mining Development and the Minerals Marketing Corporation of Zimbabwe (MMCZ),” Minister Chitando said.

“This is meant to ensure that the ministry and MMCZ will be aware of what will be happening at each diamond mine,” he said.

The Minister said only ZCDC, Murowa Diamonds and two other mining companies to be announced soon will conduct the diamond mining business.

Any other interested parties will have to partner any of the four entities.

Under the policy, ZCDC will establish a Diamond Value Management Center with support from technical partners and its mandate will be to clean, sort and value add the precious stones before they are released to MMCZ for marketing.

Valuation has previously been an area of weakness for Zimbabwean diamonds, with some going under the hammer for as little as $54 per carat due to lack of proper cleaning and poor marketing.

Government will see to it that construction of the centre is expedited so that it can become operational by end of 2019.

“That centre will be established by ZCDC and it will invite technical partners. lt will be responsible for the cleaning, sorting and valuation of diamonds,” Minister Chitando said.

“When the diamonds have been valued, they will be stocked under the auspices of the MMCZ, which will then oversee the selling process.

“But by then, our diamonds will have been valued and have a reserve price under which they cannot be sold under the said reserve price,” he said.

The diamond policy also mandates producers to reserve at least 10 percent of all produce for local cutters.  Government intends to ensure that as capacity grows, a bigger chunk of the produce will be reserved for local cutters.

As part of the new order, ZCDC, which had previously adopted a stockpiling policy so as to attend to bottlenecks in marketing, will be asked to dispose of its entire stock by end of first quarter next year.