Page 40 - Apmor 2018

mining commentary

HOW ZIMBABWE SQUANDERED

ITS DIAMOND RICHES By Shannon Ebrahim

UST a year before its citizens couldn’t find Witness which tracks who profited, and how overseeing the private partners.
basic food items in their stores in 2007 and ordinary Zimbabweans were denied. Of the five main mining companies, Kusena
Jwere literally starving, Zimbabwe made Despite Zimbabwe quickly becoming one is entirely owned by the Zimbabwe Mining
the largest diamond find in recent history. of the top five diamond producers in the Development Corporation (ZMDC), and
The Marange fields were so flush with alluvial world after Russia, the Democratic Republic was set up by the CIO as a source of off-the-
diamonds that within six months there were of Congo and Botswana, Zimbabweans books financing. Then there is Anjin mining in
35 000 locals sifting for them. Behind the backs continued to starve, face an unemployment which the Zimbabwe Defence Industries has
of the marauding security forces, people were rate of 80%, endure collapsing infrastructure, a 40% stake. Jinan mining is another, and is
stuffing diamonds into turkeys, hidden pockets, and a country without cash flow. The most considered an extension of Anjin that is 50%
and any other cavities they could. stunning official admission from the policy owned by the ZMDC. Mbada Diamonds has
But just two years later, the government establishment came last year from Finance operated one of the largest mining concessions
launched “Operation Never Return” to drive Minister Patrick Chinamasa who said in his in Marange, and its owners hide behind a web
out informal miners from the Marange 2016 budget statement: “There was a greater of companies. Global Witness has uncovered
fields using brutal methods such as dogs and economic impact from diamonds during times that the company is owned by retired Air Force
helicopter gunships. The intention was to exert of uncontrolled alluvial panning than through Chief Robert Mhlanga, who is a close associate
greater control over the profits for the benefit formal diamond mining arrangements.” of Mugabe.
of the political and military elite. The windfall As Global Witness has exposed, the reason More recently the government has tried to
from the great diamond find for ordinary formal diamond mining did not see profits amalgamate the diamond industry into the
Zimbabweans living on the poverty line was filtering back into the society is because the Zimbabwe Consolidated Diamond Company
over. five main diamond companies which were (ZCDC), and has refused to renew the licences
But even with the profits filtering into the local given licences to mine the Marange fields of Marange companies. The shareholders of
economy in 2006 and 2007, the economy of the were allegedly siphoning off the profits either the ZCDC are largely the same cast of characters
country was so devastated that finding basic to the Central Intelligence Organisation, the that emanate from Mugabe’s inner circle.
food items to buy was almost impossible. Store Zimbabwe Defence Industries, former security The tragedy is twofold. One is that so much
shelves were empty, the prices of basic items force chiefs, or associates of President Robert revenue which could have been put towards
rocketed, and Zimbabweans were flooding into Mugabe. lifting people out of poverty was squandered
South Africa by the thousands. Mugabe has tried to claim that private by the political and military elite when
companies involved “robbed Zimbabwe” as suffering was at an all time high. Second,
his government had anticipated profits worth
How did Zimbabwe squander $15bn from Marange, although only $2.5bn members of the security establishment will
such a rare chance to revive its has been received from exports since 2010. But seek to influence the outcome of next year’s
election to further entrench their control over
beleaguered economy? In 2011, of that $2.5bn that the state earned, only $300 the diamond industry.
the Minister of Mines estimated million was accounted for in public accounts,
that Marange could generate $2 according to Global Witness. Needed now are steps toward parliamentary
oversight of the operations of the ZCDC, and
billion a year in revenue. While there may have been discrepancies greater transparency concerning the revenue
between what private companies received and flows associated with the diamond industry.
what went to the Treasury, the government
Well, the answers can be found in a ground- owns 50% of the companies licenced to Shannon Ebrahim is Independent
breaking report released recently by Global mine, and the responsibility for selecting and Media’s Foreign Editor.

40 | AFRICAN POWER Mining & Oil Review Vol 21, Issue 20, 2017