THERE is urgent need to establish an independent body to oversee the production and sale of diamonds, as recorded output of the gem appears grossly understated, Finance Minister Tendai Biti has said. The minister said while Zimbabwe was projecting an output of about 45 million carats this year, it has since been established that Anjin, one of the diamond firms, has the capacity to produce that output in just three months.
Apart from Anjin, a joint venture between Chinese and the Zimbabwe National Army, four other firms including Mbada, Diamond Mining Corporation and Marange Resources are exploiting the gems.
Zimbabwe is expecting about US$600 million from diamond revenues this year.
"There is a huge gap between what is happening and what we (the Treasury) are receiving," Minister Biti told journalists at a Press briefing during the Zimbabwe Investment and Trade Conference.
"It's quite clear that we urgently need a new Diamonds Act which will enable us to establish a stand-alone agency. When we projected we would realise about US$600 million this year, our figures were based on the projected annual output of 45 million carats . . . but it's so clear that one of the biggest mining companies, Anjin, can easily produce 45 million carats in the space of three months. The opaqueness in Marange is certainly a cause for concern."
Prime Minister Morgan Tsvangiri had earlier told the same conference that Zimbabwe's diamond wealth alone could realise billions of dollars per year if this valuable asset was exploited transparently in line with regional best practices.
"So far, pretty little has been realised from the sale of diamonds because of the murky manner in which these resources are being mined and sold.
"As a Government, we have asked the responsible ministry (Mines and Mining Development) to work with other stakeholders and ensure transparency across the value chain, from extraction to the marketing of this important national resource," Prime Minister Tsvangirai said.
"This is important because investment opportunities are enhanced when Government begins to create a transparent business environment and this cannot happen when Government itself is not transparent."
United Kingdom-based securities firm Charles Stanley estimates that Zimbabwe will become a major diamond player in the world with potential to supply 25 percent of diamonds traded on the international gem markets. While the exact extent of the diamond resources in Marange diamond fields is not known official documentation indicates that the country could be sitting on between 60 000 and 70 000 hectares of the mineral.
Currently, Zimbabwe is the seventh biggest producer of diamonds in the world and has potential to account for over 25 percent of the diamonds traded on international markets. Its current major export destination is India.
Charles Stanley Securities mining and commodities analyst Mr Kieron Hodgson recently said Zimbabwe would produce between two million and three million carats per month at peak for an average period of 20 years.
The country presently stands to earn in excess of US$2 billion annually from exports of the precious mineral.