A Review of the Nigerian Energy Industry

Zimbabwe fumes over diamond revenue

President Robert Mugabe of Zimbabwe

15 March 2014, Harare – The Zimbabwe government would rather halt all diamond mining in Marange than let firms operating there continue fleecing the country of millions of United States dollars through understating the real value of the stones they extract and sell through cartels, a Cabinet minister has said.

Mines and Mining Development Minister Walter Chidhakwa said government lost much revenue through the cartels, and he was boosting monitoring mechanisms to ensure Zimbabwe realises true value from its resources.

Mbada Diamonds, Marange Resources, Anjin Investments, Jinan and Diamond Mining Company have come under fire after they told Parliament last week that they were not aware of the existence of the Marange-Zimunya Community Share Ownership Trust in which they were supposed to contribute US$10 million each.

The minister’s blistering censure came as the Antwerp Diamond World Centre yesterday criticised the relationship between diamond miners and the Government in an assessment of the country’s second gem auction in Belgium.

The auction realised US$69 109 465,18 but only US$10 366 419,78 went to Treasury even though four of the miners are joint ventures with Government, while Marange Resources is 100 percent State-owned.

AWDC said the money remitted to Government was low because the companies were not paying related taxes.

“The failure of the companies to remit the resource depletion fee and marketing fees to the Treasury is of deep concern.

“Could it be they are exempted from paying these taxes in the contracts they have? Contracts should be made available to the public and the diamond mining companies should publish their financial statements.”

AWDC said Zimbabwe’s tax regime was tailored to ensure Treasury received 15 percent of the diamond companies’ revenue as royalty and over 75 percent of profits as dividends and corporate tax.

“However, given the tokenistic payments made to Treasury since operations in Marange commenced, it is evident that there is something terribly wrong either with the way the Zimbabwe Revenue Authority is operating or the way mining contracts are negotiated.”

Addressing students taking Joint Staff Course Number 27 at the Zimbabwe Staff College in Harare yesterday, Minister Chidhakwa said it was better to stop mining than continue losing money to miners.


– The Herald

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