GOVERNMENT is considering to raise $30 million to fund working capital for the consolidated diamond mining firm, the Zimbabwe Consolidated Diamond Company.
The Government is finalising consolidation of the industry by merging companies operating in Marange as part of efforts to ensure accountability of earnings from the gems.
This will end the joint venture arrangements that the Government had entered into with private investors five years ago when alluvial diamond mining was formalised. Despite formalisation of the diamond mining in Marange, the country had been losing millions of dollars in potential revenue due to lack of transparency in the sector.
Analysts noted the industry had more significant impact on the economy during times of uncontrolled operations than what it was following the re-organisation of the sector.
The board of the consolidated company has already been appointed while recruitment of executives has been completed, the Ministry of Mines and Mining Development said.
Reserve Bank governor Dr John Mangudya said the Government was targeting six million carats this year and negotiations with development financial institutions were underway.
“In order to attain a diamond target output of 6 000 000 carats as projected in the 2016 National Budget through the consolidated company, the bank, in close liaison with the Zimbabwe Consolidated Diamond Company, the Ministry of Mines and Mining Development and MMCZ, shall institute the deliberate measures . . . (to) increase access to long term and working capital financing in an amount of $30 million,” said Dr Mangudya.
He said the central bank will also capacitate Aurex (Pvt) Limited to enhance value addition of diamonds supplied by the ZCDC while all export proceeds by the consolidated diamond company will be accounted for by the central bank in a similar manner to gold under Fidelity Printers and Refiners.
“The bank’s great desire is to ensure that ZCDC grows and become what Fidelity is to RBZ. These two, FPR and ZCDC, should become agents for economic transformation in Zimbabwe,” he added.
Dr Mangudya said the bank was concerned about the failure of the diamond sub-sector to contribute meaningfully to the development of the economy like what happens in other regional countries where diamonds contribute up to 30 percent of fiscal revenue.
“Unlike gold and tobacco which have significantly contributed to the liquidity in the economy, diamonds have been a great disappointment,” said Dr Mangudya.