Zimbabwe Diamond mining must benefit communities
STAKEHOLDERS in the mining industry have challenged the government to properly account for revenue from the diamond mining sector and ensure that it benefited the poor.Delegates at a Corporate Social Responsibility (CSR) workshop organised by the Southern Africa Resource Watch (SARW) and Zimbabwe Environmental Lawyers Association (Zela) accused the government of failing to plough back revenue from diamond proceeds in community development.
The diamond mining industry has been in pandemonium since the country’s gems have been shunned by major international buyers after being classified as “blood diamonds”.
This has created a lucrative black market which makes it difficult to ascertain the real revenue derived from diamonds. Zanu PF’s Simbaneuta Mudarikwa asked what was being done by the Zimbabwe Mining Development Corporation and other state enterprises to develop communities they operate in.
“We would want to know who is getting money and benefiting from the industries in mining,” Mudarikwa asked. “What is being done to develop communities? For instance we have the ZMDC, what is it doing? Where is the money going to? We should not only question what foreign-owned companies are doing. Even those state-owned companies have a role to play. What are they doing?”
Political interference and preferential treatment of some mining companies have also contributed to the problems in the mining sector.
The situation at Chiadzwa, the main hub of diamond mining in Zimbabwe, remains dire.
Villagers have accused Chinese company Anjin of depriving them of employment opportunities by favouring Zanu PF supporters.
Some delegates called for more robust research to craft a proper framework for the diamond industry.
Chairperson of the Portfolio Committee on Mines and Energy, Edward Chindori-Chininga, said there was need for proper research on empowerment so that people have a better understanding of where “we are going”.
“There should be accountability. Some mining companies tend to take social responsibility as a charitable measure and not as a responsibility. They think that whatever they have done or given communities it’s a blessing. The community must benefit,” said Chindori-Chininga.
He said something was “terribly wrong” in the 10% shares that are for the community trusts.
Chindori-Chininga said: “CSO needs to do some work on what structures need to be put in place to develop the community. Guidelines should be clearer on community structures in terms of who is involved, what is the structure like, what is the role of the DA (District Administrator) and under what regulations will it operate.”
SARW director Claude Kabemba said it was important that the government promoted its own people first.
“Our local companies are worse than foreign companies. If we can’t set best standards for ourselves, how do we expect foreign companies to perform?” he asked.
Research on Zimbabwe’s mining sector in Marange and Mutoko by Zela paints a worrying picture.
“A few lucky villagers were however employed by the mining company although a lot more are bitter that they have been sidelined, particularly by Anjin that is alleged to be bringing workers in from China, hence depriving local youths of employment opportunities,” Zela reports. “There are also reports that mining companies should employ people from Zanu PF structures only.”
The environmental lawyers expressed concern over lack of support from the judicial system to protect the rights of the Chiadzwa people who were forcibly relocated without being given compensation except for the US$1 000 disturbance allowance to each family and groceries for a month.
They argued that cases filed at the courts were not treated as urgent issues.
“The effect of the court decision is that since the court failed to uphold the need to promote class action, it gave a licence to the state and mining companies to relocate the families without making any consultations or reaching agreement with the people, except using coercion and threats,” Zela said.
“It also means the judiciary is not ready to protect the economic, social and cultural rights of communities against the operations of mining companies and government. The courts that are expected to be the last bastion in protecting the environmental, economic, social and cultural rights of the poor are failing to do so.”
ZImbabwean Diamonds Minister Mpofu, Kasukuwere attack indigenisation law critics
Mines and Mining Development minister Obert Mpofu and Indigenisation minister Saviour Kasukuwere Thursday attacked critics of indigenisation laws and said some of them were being used as mouthpieces of Western countries.
The two were addressing the Parliamentary Portfolio Committee on Mines and Energy on indigenisation in the mining industry.
Mpofu said Zimbabwe’s diamonds had enriched countries like Israel and India, saying the Reserve Bank of India was even built using diamond money from Zimbabwe when Zimbabweans were not benefitting from their natural resources.
“In dealing with issues of indigenisation, we should not be mouthpieces of detractive interests because we are the only country in the world which has not benefitted,” said Mpofu.
“We have enriched neighbours and sometimes I get emotional to hear colleagues challenging the measures that government has taken to empower Zimbabweans,” he said.
Mpofu attacked Australia and Britain saying they were at the forefront of banning Zimbabwe from selling diamonds, yet they were the major beneficiaries.
“We had De Beers for 15 years in Chiadzwa and have records of more than 100 000 tonnes of diamond ore taken to South Africa and yet you hear people making noise about diamond transparency. We need to know who is looting our resources,” Mpofu said.
Mpofu said those who had mining claims but were not putting them to full use stood to lose them.
“Government will apply the work it-or-lose-it principle on mining claims. If one does not work, he will lose the claims. We have people who own two thirds of the Great Dyke but are only exploiting a tenth. What this has done is to block new investment and is holding the country to ransom and denying the people of Zimbabwe what belongs to them,” he said. Kasukuwere vowed there was no going back on indigenisation and urged companies to engage the government.
“Mpofu is under fire with the Kimberley Process because we want to share the honey. Investors are welcome but we are not going to sit and allow a situation where we are exploited,” said Kasukuwere.
http://www.newsday.co.zw/article/2011-05-13-mpofu-kasukuwere-attack-indigenisation-law-critics
The two were addressing the Parliamentary Portfolio Committee on Mines and Energy on indigenisation in the mining industry.
Mpofu said Zimbabwe’s diamonds had enriched countries like Israel and India, saying the Reserve Bank of India was even built using diamond money from Zimbabwe when Zimbabweans were not benefitting from their natural resources.
“In dealing with issues of indigenisation, we should not be mouthpieces of detractive interests because we are the only country in the world which has not benefitted,” said Mpofu.
“We have enriched neighbours and sometimes I get emotional to hear colleagues challenging the measures that government has taken to empower Zimbabweans,” he said.
Mpofu attacked Australia and Britain saying they were at the forefront of banning Zimbabwe from selling diamonds, yet they were the major beneficiaries.
“We had De Beers for 15 years in Chiadzwa and have records of more than 100 000 tonnes of diamond ore taken to South Africa and yet you hear people making noise about diamond transparency. We need to know who is looting our resources,” Mpofu said.
Mpofu said those who had mining claims but were not putting them to full use stood to lose them.
“Government will apply the work it-or-lose-it principle on mining claims. If one does not work, he will lose the claims. We have people who own two thirds of the Great Dyke but are only exploiting a tenth. What this has done is to block new investment and is holding the country to ransom and denying the people of Zimbabwe what belongs to them,” he said. Kasukuwere vowed there was no going back on indigenisation and urged companies to engage the government.
“Mpofu is under fire with the Kimberley Process because we want to share the honey. Investors are welcome but we are not going to sit and allow a situation where we are exploited,” said Kasukuwere.
http://www.newsday.co.zw/article/2011-05-13-mpofu-kasukuwere-attack-indigenisation-law-critics
Zimbabwe may sell diamonds to launch gold-backed currency
HARARE (Commodity Online): Zimbabwe may sell diamonds for gold, so that it can have a gold-backed currency, according to a recent proposal from the governor of Zimbabwe’s central bank.
The Zimbabwean dollar is no longer in active use after it was officially suspended by the government due to hyperinflation. The United States dollar, South African rand, Botswanan pula, Pound sterling, and Euro are now used instead. The US dollar has been adopted as the official currency for all government transactions with the new power-sharing regime, says Wikipedia.
But the central bank of Zimbabwe—Reserve Bank of Zimbabwe (RBZ)—believes that the US dollar is no longer stable.
According to Dr Gideon Gono, RBZ Chief, the inflationary effects of United States’ deficit financing of its budget may impact foreign countries and would lead to a resistance of the green back as a base currency; cited newzimbabwe.com.
Writing in a blog in New Zimbabwe, Gilbert Muponda, an entrepreneur based out of Zimbabwe has welcomed the proposal of a gold-backed Zimbabwean currency. He has applauded the proposal of the central bank governor to sell diamonds for gold.
The country is a resource hub: It sits on gold reserves worth trillions. It has the world’s second largest reserves of platinum, has got alluvial diamonds that can fetch the nation $2 billion annually and even boasts of chrome and coal deposits.
But the government’s protectionist measures have kept the mining companies at bay. The government wants the foreign miners to sell controlling stake in ventures to local blacks, which is obviously frowned up on by all. The companies, given the uncertain situation, have refrained from investing further in expansion activities in Zimbabwe.
The country cannot access foreign credit as the ZIDERA Act passed by the United States in 2001 blocks US entities from trading with certain Zimbabwean institutions and individuals This has forced the US representatives in lending agencies like World Bank, IMF, IFC, and ADB to take an unfavorable stance when it comes to Zimbabwean credit requests.
Naturally, the risk premium goes up and the banks play it in the back foot.
“The events of the 2008 Global Financial Crisis demand a new approach to self reliance and a stable mineral-backed currency and to me, Gold has proven over the years that it is a stable and most desired precious metal,” the RBZ Chief was quoted by newzimbabwe.com as saying.
Well said!
http://www.commodityonline.com/news/Zimbabwe-may-sell-diamonds-to-launch-gold-backed-currency-2011-05-20-39184-3-1.html
Zimbabwe diamond polishing centre set to open
The construction of the institution which is located in Harare’s Mt. Hampden area was necessitated by the need to add value to the country’s mineral exports.
College director, Mr. Joseph Banda, expressed optimism that the institution will make significant impact in the local diamond industry and confirmed that over 150 prospective students have applied for diamond cutting and polishing courses.
“As a country we have been losing a lot of revenue by export unprocessed minerals particularly diamonds and we are confident that skills to be learnt here will go a long way in transforming the local diamond industry,” he said.
Responding to concerns that Marange villagers are not likely to benefit from such facilities given the distance from the source of the diamonds and the location of the college, Mr. Banda assured the villagers that there are plans to engage responsible authorities to get another license for a similar project in the Marange area.
Some of the registered students who were going through the introductory lessons hailed the establishment of the institution, which they said is critical in aligning the country’s diamond industry with international trends.
Zimbabwe’s diamond industry, which is still in its infancy, has the potential to transform the country’s economy if resources are channeled towards value-addition of the gems.
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