Zimbabwe Diamond Output Falls 62% Since Government Took Over Mines

Mining and Exploration
06/12/2016 16:52

Zimbabwe has produced only 924,000 carats of diamonds this year from its Marange fields, or just a third of the 3.2 million carats produced over the same period last year, as court cases filed by miners against a government decision to expropriate their claims drag on. And this figure represents an upturn since July, when the country's central bank announced Zimbabwe's diamond production had slumped by 76% since the government’s consolidation of the firms mining in the Marange deposits. The government ordered all diamond miners in Marange to cease operations on February 22 this year after they declined 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.

This is just the latest development since President Mugabe announced on his 92nd birthday on February 21 2016 that $15 billion worth of revenues generated by the diamond industry had gone missing: since then, several diligent civil society organizations investigated, finding discrepancies between what companies report they are paying and what governments report they are receiving, with vast sums of money going missing and ending up in tax havens.

The consolidation saga started in March 2015 when Zimbabwe announced plans to merge the diamond mining companies in Marange, including Rio Tinto's Murowa diamond mine in south-central Zimbabwe. "We are very clear, this is a regulatory matter and we have said to them the only way you can participate in diamond mining in Zimbabwe is by being in this company," Mines Minister Walter Chidhakwa said at the time. This led to Rio Tinto, the world’s second-largest mining company, to exit Zimbabwe altogether last June. Chidhakwa in December 205 said the merger was nearly complete, but the miners still refused to play ball. The affected miners - Anjin Investments, Diamond Mining Company, Jinan, Kusena, Marange Resources, DTZ-Ozgeo and Mbada Diamonds - threatened to sue the government, and with the exception of DMC and Marange Resources, they challenged the consolidation in the High Court but lost the case, but have since appealed to the Constitutional Court.

Presenting evidence before the Mines and Energy Parliament Committee on Monday, Chidhakwa explained that the miners were dragging their feet, and have, “So far delivered to ZCDC a total of 924,388 carats, and that compares very badly with 3.2 million carats for 2015. The explanation is that the 924,000 carats are coming from the two mining locations not the seven mining locations. So we need to finalise the court cases."