News / Africa

    Mugabe Digs In on State Seizure of Diamond Mining

    FILE - Zimbabwean President Robert Mugabe, Feb. 22, 2016.
    FILE - Zimbabwean President Robert Mugabe, Feb. 22, 2016.

    Zimbabwe’s President Robert Mugabe said late Thursday that he will not back down on his decision to seize control of the diamond industry. Last month, Mugabe gave foreign mining companies 90 days to stop work and leave the country.Scaring away foreign investors may be the last thing Zimbabwe needs right now.
     
    In a wide-ranging interview on state television, Mugabe said Zimbabwe has received less than $2 billion for what he said has been $15 billion worth of diamonds mined since 2009
     
    “So where have our carats have been going?  We have been blinded ourselves. Lots of swindling, smuggling has taken place and companies that have been mining virtually, I want to say robbed us of our wealth. And that is why we have decided that this area should be a monopoly area and only the state should be able to do the mining in that area," he said. "You cannot trust a private company in that area, none at all. And we should have learnt from the experiences of countries like Botswana, Angola, Namibia etc."
     
    Mugabe included the Chinese mining company Anjin in his indictment, a surprising move for some.
     
    China is a key investment partner for Zimbabwe.  Officials have referred to China as the country's “all-weather friend” since the U.S. and European nations imposed sanctions in 2002 over rights violations and vote rigging.

    But Mugabe says he addressed his concerns about Anjin with Chinese leader Xi Jinping on his landmark visit to Zimbabwe late last year.
     
    “I don’t think it has affected any of our relations adversely at all. I don’t think so. I told President Xi Jinping that we were not getting much from the company and we didn’t like it any more in this country. So we wanted it to go back. I told him that here," he said.

    Anjin is one of nine foreign mining companies now fighting Mugabe’s move in court. The case opened this week in Harare.

    The government said last month that under the new system, the Zimbabwe Consolidated Diamond Company - in which the government will hold at least 51 percent equity - will now mine the country’s gems.

    Zimbabwean economist John Robertson says the government is not actually ready to take over diamond extraction and the country's indigenisation policy was going to affect further mining of diamonds (VOA/ S. Mhofu).
    Zimbabwean economist John Robertson says the government is not actually ready to take over diamond extraction and the country's indigenisation policy was going to affect further mining of diamonds (VOA/ S. Mhofu).

    But Zimbabwean economist John Robertson says the government isn’t actually ready to take over diamond extraction.

    “That is a nonsensical statement. You actually need cash to do the actual job in mining. Now they need capital, now they need to bring in proper techs to extract the real value from what is available. And the money to do that isn’t there," he said. "The people that are supposed to bring in the money are thoroughly discouraged by the fact that they have to invest 100 percent of their capital and only be allowed to earn an income from only 49 percent of that capital."
     
    The government says this new system is in line with the broader indigenization policy which since 2008 has forced foreign companies and landholders to cede control to black Zimbabweans.

    Mugabe says the law was meant to return the economy to the hands of blacks who were marginalized during British colonial rule.

    But analysts say that policy and others have sunk Zimbabwe’s economy to unprecedented lows. Unemployment is above 80 percent, and the government relies on foreign aid to fund social sectors like education and health.

    In 2008, the Kimberly Process suspended Zimbabwe from trading in diamonds following reports that senior government and military officials had taken control of the mines and were smuggling the precious stones.  Rights groups reported that the diamonds were collected through forced labor.

    The suspension was only lifted in 2009 when Harare convinced the Kimberly Process - a world body aimed at stemming the flow of conflict diamonds - that normalcy had been restored.

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    Comments
         
    by: Donald Fraser Miles from: Elliot Lake, Canada
    March 05, 2016 5:19 AM
    It does sound like the royalties to the Zimbabwe government were half what they should have been. I also think that Nigeria might have rich diamond reserves to mine.

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