US$410 million diamonds revenue disappears in Zimbabwe


HARARE – Finance minister Tendai Biti says  the treasury only received a paltry $46 million from US$456 million sale of Zimbabwe diamonds. The rest of the amount has not been accounted of. 

Biti said diamond leakages are expected to continue despite government recently appointing the Zimbabwe Revenue Authority (Zimra) to supervise all mining operations and stop irregularities.

He recently told businessdaily, Zimra’s involvement could help to an extent, but not enough to plug the diamond looting.

“It should help. I mean if Zimra does its job properly it would help because at least now it will be known,” he said.

“But I think the people that are stealing our diamonds are so sophisticated that stealing will continue,” added Biti.

The country has also failed to gunner political will to ensure transparency in the diamond sector with Mines minister Obert Mpofu saying there cannot be full disclosure in the diamond industry in the face of economic sanctions.

In his state of the economy update last week, the Treasury chief said diamond revenues continued to be slow despite evidence of active mining at the country’s Marange fields.

According to Biti’s update, which quotes Reserve Bank of Zimbabwe figures, diamond companies exported $456 million worth of produce between January and August this year and only remitted $46 million for the period to July and nothing in August.

The under-performance of diamond revenues forced government to revise its $4 billion 2012 cash budget downwards to $3,4 billion.

The budget had been backed by a projected $600 million trickling from diamonds.

The African Development Bank reported in its August Zimbabwe Monthly Economic Review that the mining industry has been accused of transfer pricing, whereby mining firms understate the true value of minerals extracted and this has prejudiced the state in tax revenue.

In his Mid-term Fiscal Statement, Biti proposed to involve Zimra in all mining operations from the mining stage to the marketing stage in order to ensure transparency in the production, valuation and marketing of mineral, thereby realising maximum benefit from the resources.

“Zimra has been building capacity, especially in the grading and valuation of diamonds. Furthermore, Zimra is engaging other institutions in order to share practical experience in the value chain of mineral resources (and) these efforts need to be strengthened through a legal provision that sanctions the physical presence of Zimra personnel from the production up to the marketing of minerals,” read excerpts of the statement.

Biti proposed to amend the relevant legislation, in order to provide for the physical presence of Zimra personnel at mining locations to facilitate monitoring of extracting, sorting, weighing, sealing and recording processes at mines, particularly diamond mines.

Mugabe with Chinese Ambassador
Mugabe with Chinese Ambassador

The revenue collector is also expected to monitor receipting and storage, evaluation, grading and polishing as well as auctioning and processing of export customs documents.

Currently, government undertook to station Zimra officials at selected mining locations, in order to ensure transparency and accountability in the extraction of mineral resources.

This has only been possible through negotiation with mining companies, since it is not legally provided for. Daily News


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