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‘Zim diamond value chain marred with irregularities’

THERE are serious discrepancies between what government receives from the diamond mining sector and remittances claims by producers, a parliamentary portfolio committee has said.

BY KUDZAI CHIMHANGWA

In a recent report following a three-year investigation on the Marange diamond producers, the portfolio committee on Mines and Energy observed that government had not realised any meaningful contributions from the sector, despite the increase in production and revenue generated.

It is estimated that the country now has the capacity to supply 25% of the global diamond market.

In 2011, 8, 7 million diamond carats worth US$ 233 741 247 were produced and exported while 12 million diamond carats worth US$563 561 495 were produced and exported in 2012.

The committee chaired by Edward Chindori-Chininga, unearthed a number of irregularities and loopholes at each of the different stages of the diamond value chain.

The committee noted that when formalised operations began in Marange in 2009, there were two companies operating, namely, Mbada Diamonds and Canadile Miners.

“In January 2010 Mbada Diamonds attempted to auction its diamonds, in violation of both national and international law. The aborted diamond auction sale opened a Pandora’s box, revealing several irregularities and loopholes in the entire diamond value chain,” the committee said.

It noted that Mbada Diamonds displayed a “big brother” syndrome such that some of the government institutions were rendered powerless to question Mbada’s decisions or actions.

In one of its hearings in 2010, the committee said that it was disheartened to hear that two senior security officers employed by Canadile Miners were found in possession of 57 pieces of diamonds at a ZRP road block at Hot Springs.

The committee’s worst fears were confirmed in November 2010, when Canadile Miners was blacklisted by the government following revelations that the company was involved in underhand dealings such as smuggling of diamonds.

As a result of the financial restrictions, a number of loopholes have been created leading to fiscal leakages, promotion of corruption and national insecurity, it said.

It recommended that the Ministry of Finance speedily enact a comprehensive taxation law which would address some of the taxation discrepancies in the mining sector, resulting in an improvement in revenue inflows to the fiscus.

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