Zim targets $800m annually from Marange diamonds – Chidhakwa

Zim targets $800m annually from Marange diamonds – Chidhakwa

MUTARE, May 3 (The Source) – Zimbabwe’s rich Marange diamond fields in the east of the country can produce one million carats of diamonds per month and earn the country $800 million in dividends annually, Mines Minister Walter Chidhakwa has told The Source.

That will be the target to be met by the Zimbabwe Consolidated Diamond Company (ZCDC), the new state owned diamond company established to take over all diamond mining in Marange.

Chidhakwa said government had already sold some gems under the new company.

“About 270,000 carats was recently auctioned under ZCDC, and we intend to push production up to half a million carats. Remember we used to do 15 million carats, which means we were doing more than half a million carats per month.

“We also (previously) did 12 million carats annually, which was one million carats per month. Now if we go back to one million carats per month, you find a price of $70 to $80 per carat, which is $70 to $80 million per month. We multiply this by 10 months and get $700 million plus the extra two months, we get an average of $800 million. And naturally when that kind of money is pushed into the national fiscus, it makes it easy for government to pay its civil servants. It makes it easy for the Mines Ministry to provide its workforce with necessary resources. It also means that government will be paying its tenders in cash,” said Chidhakwa.

Government ordered all diamond miners in Marange to cease operations on February 22 after they resisted its proposals to nationalise the industry. The government said the miners’ licenses had expired and accused them of failing to account for revenue from their operations. The mines had resisted a plan by the government to bring them under one firm in which the state would own 50 percent.

There are seven miners in Marange: Anjin Investments, Diamond Mining Company, Jinan, Kusena, Marange Resources, DTZ-Ozgeo and Mbada Diamonds. The government holds 50 percent shareholding in all the firms.

Chidhakwa told The Source that at its peak, the Marange fields produced 15 million carats per annum of alluvial diamonds.

The Marange fields are regarded as one of the world’s richest alluvial diamond deposits, but its resources are depleting, experts say. It was estimated to have produced around 17 million carats in 2013, which was 13 percent of the global rough diamond supply, according to the Zimbabwe Mining Development Corporation.

Marange produced 12 million carats in both 2012 and 2014, while production figures for 2015 are not yet available.

Chidhakwa said measures were already in place to prevent leakages after President Robert Mugabe recently said the country could have lost up to $15 billion in shady diamond deals. ZCDC will only handle finances that meet its operating costs while all surplus revenue it generateswill be remitted to Treasury.

The Minister added that the consolidated entity will also remit dividends on a monthly basis as opposed to the annual disbursements, and will have to produce mandatory quarterly financials to enhance accountability of all financial inflows.

“I have already had discussions with the chairman and directors of ZCDC and I have indicated to them that all we want to know is the cost of running ZCDC and we will put it aside, everything else goes to the government.

“(Dividends will be paid) not at the end of a six months period, not at the end of the year but every month. Every month they should be able to declare dividends to the government, and say ‘we have produced so many diamonds, we have set aside so much money for the running of the company, we have set aside so much money for development purposes’ and everything else goes directly to the fiscus.”