Treasury received $260mln in diamond dividend – Chidhakwa

Treasury received $260mln in diamond dividend – Chidhakwa

HARARE, October 29 (The Source) – Zimbabwe’s Treasury has so far received nearly $260 million in dividends over nine years from diamond companies operating in Marange, eastern Zimbabwe in which it has shareholding, mines minister Walter Chidhakwa has said.

President Robert Mugabe’s government has stakes of varying degrees in all firms operating in the Marange fields on the eastern border with Mozambique and has tabled a proposal to nationalise diamond mining which would also bring the RioZim-owned Murowa Diamonds, which operates in south-central Zimbabwe under government control.

Chidhakwa told Parliament on Wednesday that government has been receiving annual dividends from the Marange miners since 2006 when the gems were discovered.

“With regard to dividends which are declared by the companies, I want to advise this House that since the discovery of diamonds in Marange except in the case of Murowa, the dividends that were declared to Treasury amount to $259,452,422. This is the dividend that has been declared out of companies operating in Marange,” he said.

He added that the amounts have declined in recent times in line with falling production and low sales.

Finance Minister Patrick Chinamasa in April this year told a parliamentary portfolio committee that Treasury has not received royalties — a levy based on production — from the diamond sector, especially Marange firms. Diamond firms are also required by law to remit 15 percent royalties to government and 2,5 percent depletion fees to the Zimbabwe Mining Development Corporation (ZMDC).

Government early this year introduced a new tax payment system whereby government automatically deducts royalties once payment for diamond sales has been made.

Meanwhile, Chidhakwa said the merger of diamond miners – aimed at promoting accountability and transparency in the sector – will not affect communities share ownership trusts.

“Let me advise this House that the model that we have created for merging the companies must of necessity assume that the successor company must inherit both the assets and liabilities of the companies that are being merged. What that means is that if a company comes into the consolidated company, that company has assets and liabilities and has commitments that it has made.

“All these will be consolidated and brought into this one company. This one company must therefore, honour the commitments that were made by the successor companies,” he said.

Chidhakwa noted that the merged entity, comprising of Mbada Diamonds, Marange Resources, Anjin, Kusena, Diamond Mining Company and Murowa, would be subject to the laws of Zimbabwe in so far as the laws relate to Community Share Ownership Trusts.

“This company must, after being established, take care of communities in the same way if not better than what the individual companies were going to do,” he said.