18 October 2012

Zimbabwe: Sanctions Scuttle U.S$600 Million Diamond Revenue Forecast

THE anticipated US$600 million revenue from diamonds will not be realised this year owing to sanctions.

This flies in the face of Finance Minister Tendai Biti's economic growth projections which were hinged on diamonds.

Addressing a Press conference in Harare yesterday, Mines and Mining Development Minister Obert Mpofu also blamed failure to meet the target on the general downfall of the diamond market in the past few months.

"We had made projected targets. The idea was to meet US$600 million but that has been interfered with because of the sanctions.

"Our buyers have been threatened by the Americans and the British. We are experiencing that on a daily basis.

"Some payments from our buyers have been intercepted. Our customers are being deterred from buying our diamonds by these things."

Minister Mpofu said sanctions made it difficult for buyers to buy the country's gems.

He said the country would continue selling its diamonds under cover to bust the sanctions.

Minister Mpofu said a lull in the world diamond market would also reduce revenue inflow.

This, he said, resulted in diamond mining firms cutting production.

In his 2012 National Budget presentation, Minister Biti said he expected over US$600 million of revenue from diamonds.

Minister Biti also promised civil servants bonuses and an increment if the diamond revenue collection targets were met.

Minister Mpofu said the country was prepared to host next month's diamond conference in Victoria Falls.

He said America and its allies tried but without success to change Kimberly Process Certification Scheme regulations to disadvantage Zimbabwe.

Minister Mpofu accused Minister Biti of double standards for claiming that there was no transparency in the diamonds trade.

He said Minister Biti was instrumental in calling for the sanctions to be imposed on Zimbabwe, which made it difficult to trade the diamonds openly.

"How can someone who advocated for a policy to have sanctions against his country say that there is no transparency given all these problems (facing the diamond industry)?" he said.

"There can be transparency if sanctions are lifted. We know who called for those sanctions, but they are making the loudest noise.

"He (Minister Biti) is now spokesperson for accountability yet he was instrumental in calling for these sanctions."

Minister Mpofu said over 5 000 delegates were expected to attend the diamond conference.

He said KPCS chairperson Ambassador Gilian Milovanovic of the US had confirmed her attendance.

Minister Mpofu said the conference was meant to manage the world's perception of the country's diamond industry.

"This is one event that will put Zimbabwe where it belongs in terms of involvement in diamond trade," he said.

"We are going to have ministers from the region and other diamond players. For instance, we will have ministers from Namibia, Angola, DRC, South Africa and other diamond mining countries.

"The objective is to dispel the misconception about the country's diamond industry and to lure more investors into the mining industry."

Minister Mpofu said ministers from Namibia and DRC would be the main speakers at the conference.

He said since her take-over as the KPC chairperson, Ambassador Milovanovic had done "fairly well" despite her country's aggression against Zimbabwe.

Zimbabwe Mining Development Corporation chairperson, Mr Goodwills Masimirembwa, said the sanctions had made it difficult for the diamond industry to perform.

"The threat of interception makes free trading very difficult because no person will be comfortable to trade with us," he said.

"This situation seriously compromises our capacity to realise maximum pricing because the purchaser will argue that there is high risk in doing business with us."

Mr Masimirembwa said given the turbulence characterising the diamonds industry, it was difficult to give projections.

Anjin Investment early this year lost a US$20 million business deal after a European diamond processing firm had its money to buy the diamonds intercepted and frozen by the United States.

The intention was to frustrate the local diamond industry so that it does not bust the illegal sanctions imposed on Zimbabwe.

The money is intercepted through the US's Office of Foreign Asset Control.

Companies, both local and foreign, that are aligned to the ZMDC's accounts have their transactions intercepted by OFAC.

Copyright © 2012 The Herald. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.