In an exclusive interview recently, Chimanikire shed light on the problems bedevilling diamond production and sales, which have been blighted by accusations of widespread abuse by State agencies aligned to Zanu (PF) since the deposits were discovered about a decade ago.
He revealed that the army was sourcing the weapons from China by surrendering the diamonds without properly ascertaining their commercial value, implying that the country could be earning far less than the gems are worth.
“The problem with our diamonds is that they are being subjected to a barter system and not being auctioned on the open market. They are just not being valued properly. Anjin (one of the companies mining diamonds in the Marange fields in Manicaland province) is 90 percent owned by the Chinese and 10 percent by the army. Whatever (the army) gets, they barter for weapons,” Chimanikire told The Zimbabwean.
Recent reports indicate that ZDF is clandestinely sourcing weapons from unknown suppliers, offsetting an outcry from critics that there is no need to buy weapons when Zimbabwe is enjoying relative peace and there are no prospects of war.
Besides Anjin, Mbada Diamonds and the Zimbabwe Mining Development Corporation—representing government – are also involved in mining in Marange fields. Chimanikire expressed concern that bartering the diamonds made it difficult to account for sales. “What I know is that by the end of 2010, Anjin had 5,8 million carats but they were not auctioned on the Zimbabwean market. They were sold through the barter system and we don’t really know how much we are getting from the diamonds. How do you audit a barter system?
“When we try and say how much revenue is being realised from the diamonds, it becomes difficult because some of those carats are never transferred to hard cash,” he said. Some of the diamonds are reportedly being used to fund Chinese projects in Zimbabwe, among them the construction of the Zanu (PF) conference centre in Gweru.
Hastily built last year for the party’s 13th conference, the centre is believed to have cost several millions of dollars but it is not clear why diamond money was channelled to a party project.
Chimanikire said the Chinese had benefited from the diamonds by moving from one project to another. “The Chinese are moving from one project to another. They have been working on the National Defence College, the hotel in Harare (built on a wetland close to the National Sports Stadium) and the Zanu (PF) Conference in Gweru,” he said.
The minister revealed that Zimbabwe did not have its own evaluators who could check the value of diamonds but relied on external evaluators.
“I have always been critical about this (external evaluation). Let us know how much we owe the Chinese and let’s engage our own evaluators. The situation is even worse because we don’t have monthly audits, the Chinese just use their own evaluators,” he said, adding that the contracts signed with the Chinese were a major constraint in realising revenue from the diamonds because they were too open and lacked detail.
“Some of the agreements with the Chinese are difficult to monitor because they don’t have a specified time frame. As a ministry, we can only pass recommendations. It is a cabinet decision to revisit the contracts. Maybe if we had one government it would make the situation easier,” Chimanikire said.
Since 2009, Zimbabwe has been governed by a coalition government comprising Zanu (PF) and the two MDC formations that have failed to pull in one direction due to ideological and strategic differences.
Chimanikire said it was important to involve Zimbabwe Revenue Authority at a production level so it could monitor all the transactions. He also complained that the diamonds were being sorted at the Harare International Airport.
“Our diamonds are sorted at the airport, which is senseless for me. I am sure we are the only country that has the sorting of diamonds done at an airport for reasons best known to those who made the decision,” he added.
According to the 2013 National Budget, cumulative diamond output for the first nine months of 2012 stood at 8 million carats, against projected annual output of 12 million carats.
Economic analyst, John Robertson, said there were no rules to regulate diamond mining, resulting in abuses. “We are supposed to be getting tax revenue from the companies involved in the mining of diamond and export revenue but we are not getting anything. It seems the mining companies are not obliged to abide by the Zimbabwean laws. No one is checking on the value of the diamonds that are being extracted, we only depend on what we are told because we have no evaluators,” he said.
Robertson added that the employees at the diamond mining companies were not remitting tax to the government and the number of the workforce remained unknown. Bulawayo-based economist, Eric Bloch, said revenue from the diamonds could be boosted if measures were put in place to avoid smuggling and black market operations.
Anjin, which began operations in Marange in 2010 is estimated by a human rights group Global Witness to have produced three million carats last year but refused to remit diamond revenue to the treasury because of a $98-million loan China extended to Zimbabwe for the construction of a national defence college in Harare.
The international watchdog last year reported that millions of dollars from the diamonds were being channelled to fund the operations of the Central Intelligence Organisation.
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