6 October 2017

Zimbabwe: Mining Sector Opaque - Chinamasa

Photo: The Herald
Diamonds (file photo).

Finance minister Patrick Chinamasa has hit out at mining companies in Zimbabwe, accusing them of prejudicing the country of significant income in unpaid taxes amid widespread opaqueness shrouding the sector.

The Zimbabwe Independent, over the years, has extensively carried out ground breaking expose in the sector, particularly focusing on the Chiadzwa diamonds, revealing how the country is being pillaged of potential revenue by state actors involved in misty mining projects.

Notably, the shady involvement of the army and the security agency in Chiadzwa following the discovery of a lucrative alluvial diamond find, has been cited by commentators as potentially robbing off the country of significant revenue that can be channelled towards other priority development areas.

Speaking at the Media Mining Awards held at a local hotel last week, Chinamasa raised concerns that the country's top mining companies could be concealing their actual production levels to evade paying tax.

He said a consultant who had been assigned to compile a fact file on the country's mining industry concluded that the sector was "the most opaque in the world."

"We once engaged a consultant to come up with a mining manual and he said that the task was difficult because the sector is opaque," Chinamasa said. "As government, we want our fair share of taxes."

Citing the example of Norway, Chinamasa accused local mining firms of concealing their actual production levels to dodge paying taxes and royalties to government.

"In order to fix appropriate tax levels Norway has developed a system where everything is transmitted to the government on a daily basis," he said.

During the inclusive government era, the then finance minister Tendai Biti persistently accused diamond mining firms in Chiadzwa for deliberately avoiding to remit taxes and royalties to treasury.

Last year, President Robert Mugabe revealed that mining firms operating in Chiadzwa had declared less than US$2 billion to Treasury despite earning a staggering US$15 billion in revenue. Experts, however, have disputed the figure given by Mugabe as earnings in diamond revenue.

Several reports have detailed the looting of Zimbabwe's diamonds especially at Chiadzwa.

One such report, titled Reap What You Sow: Greed and Corruption in Zimbabwe Marange Diamond Fields, produced in November 2012 by the Toronto-based pressure group Partnership Africa Canada says diamonds worth US$2 billion were looted since 2008.

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