Govt wins diamond proceeds’ war with firms

Top1h

Mines and Mining Development Minister Cde Walter Chidhakwa (right) and his permanent secretary Professor Francis Gudyanga give oral evidence before the Parliamentary Portfolio Committee on Mines in Harare yesterday. — (Picture by John Manzongo)

Lloyd Gumbo Senior Reporter
Government has started collecting its share of revenue from the Chiadzwa diamond proceeds at sale level rather than waiting for yearly dividends, amid indications that the State could have been prejudiced of millions of dollars from previous sales.The Zimbabwe Mining Development Corporation, Government’s mining arm holds a 50 percent shareholding stake in each of the five companies at Chiadzwa — Mbada Diamonds, Anjin Investments, Diamond Mining Company, Jinan and Kusena.

The other miner, Marange Resources, is wholly owned by Government.

Appearing before the Parliamentary Portfolio Committee on Mines and Energy yesterday, Mines and Mining Development Minister Walter Chidhakwa said Government and the investors now shared profits soon after the sales.

He said they agreed with the Ministry of Finance and Economic Development that payment of royalties and depletion fees as well as sharing of profits be done immediately after the sales.

Fifteen percent in royalties is paid to Zimra, while two percent depletion fees is paid to the ZMDC.

“We have now worked out a way of saying let’s not wait to share our dividend at the end of the year,” said Minister Chidhakwa.

“Let’s not wait to declare a dividend. Let’s say we have taken away the depletion fee and the royalty, we now remain with the cost of running the company, exploration and new development. We agree on how much we will set aside for that.

“The rest we share 50-50: this one goes into a Government account and this one goes straight into the partner’s account. That is the system basis which we are working on now.”

Minister Chidhakwa said the Minerals Marketing Corporation of Zimbabwe Act would be amended to ensure that levies are paid to the Mining Promotion Corporation. He said MMCZ was no longer relevant in marketing the country’s minerals as firms did their own marketing.

There are fears that Government could have been fleeced from its previous sales as lack of transparency and accountability reigned supreme.

A recent research report by Equity Communications indicates that Zimbabwe’s diamond revenue was expected to rise by more than 47 percent compared to last year.

Diamond revenues were lower in 2013 as leakages persisted in rough diamond sales.

The country’s diamond revenues reached US$466,9 million last year, a 38,4 percent drop from 2012.

President Mugabe has on several occasions expressed dissatisfaction at the way the diamond mining firms operated.

According to the Equity Communications research, dealers could have been buying Zimbabwe’s diamonds at a discount of up to 40 percent.

Pin It
  • Observer

    This is unsettling on so many levels, if we can’t plan for, account for & manage locally produced income, what more the 27bln loans that are begging from foreigners? If we don’t have the desire to close loopholes & leakages, let’s not expect any improvement in local economics..

    • Tobaiwa

      To put this into perspective, Botswana only had 4km of tarred road at inependence. After diamonds were discovered, with current production levels averaging $2 billion in revenue per year, the country now has over 20 000km of tarrred roads plus other significant infrastructure in health, energy and education sectors. That is what the intelligent leaders of Botswana have done for their country.
      Can someone tell me just one tangible asset or service which has been derived from Zimbabwe’s diamond revenues?

  • daniel101

    iam confused with you guys from the herald ,do you serve national interest or political interest ,the latter having depleted our national value and worth todate.why are you reporting that ZMDC owns 50% of anjin,when its well documented in their (ZMDC)current Audited financial results that they own 10% of the entity,who owns the remaining 40%?.is this structure benefiting the majority of Zimbabweans or do we have another Zimbabwe to which the other 40% is going???we are tired of lies cdes.

  • Samson Khoza

    And the guys wants to be a VP imagine?