October 18, 2013

Zimbabwe can’t find its diamond riches

Little has been paid into the poor nation’s treasury and investigations indicate corruption is extensive.

The Associated Press

HARARE, Zimbabwe — Despite living in an impoverished country under sanctions, some in Zimbabwe seem awash in money, judging by the Mercedes-Benzes parked at a country club and the private woodland estate with artificial lake and mansion built by the nation’s police chief.

click image to enlarge

Gangs of illegal miners dig for diamonds in Marange, eastern Zimbabwe, in November 2006. The lucrative diamond field was exposed by an earth tremor earlier that year.

The Associated Press

The wealth enjoyed by just a few comes, at least in part, from the vast Marange diamond field that was exposed by an earth tremor in 2006. The deposit in eastern Zimbabwe is the biggest diamond field found in Africa for a century, worth billions of dollars.

Now, as most Zimbabweans remain mired in poverty, with government coffers short on funds to build and maintain the nation’s roads, clinics, utility services and schools, questions are being asked as to where all the money went and who benefited.

A recent bipartisan parliamentary investigation concluded that tens of millions of dollars in diamond earnings are missing from 2012 alone. The lawmakers who wrote the unprecedented and unusually candid report said their “worst fears were confirmed” by evidence of “underhand dealings” and diamond smuggling since 2009.

CHARGES OF BRIBERY, RIGHTS ABUSES

In a speech opening parliament on Sept. 17, President Robert Mugabe took the rare step of accusing one top mining official and ruling party loyalist of accepting a $6 million bribe from Ghanaian investors to obtain diamond mining rights in Marange. Mugabe said Godwills Masimirembwa took the bribe when he was head of the state Zimbabwe Mining Development Corp., which is in charge of mining concessions.

Masimirembwa quit that post to contest the July 31 national election as a candidate for Mugabe’s ZANU-PF party, but failed to win a parliament seat. Masimirembwa denies any wrongdoing.

The parliamentary report and a human rights group say diamond mining has led to serious human rights abuses and that diamond concessions were awarded by government officials to enrich top members of the ZANU-PF party, the security forces and Chinese allies.

In declaring his innocence, Masimirembwa said the purported deal with the Ghanaian investors was discussed with national Police Chief Augustine Chihuri and then Mines Minister Obert Mpofu, a longtime business associate of Masimirembwa who is also one of the nation’s wealthiest businessmen.

Chihuri and Mpofu have frequently insisted in the state media that their wealth comes from legitimate business empires to make up for poor salaries paid for full-time government duties.

Expected revenues from the Marange diamond fields have scarcely materialized.

Former Zimbabwe Finance Minister Tendai Biti says he was promised $600 million for economic and development projects from diamond revenues last year, but only received $41 million. Nothing was paid into the national treasury up to the disputed July elections that the ZANU-PF won, a vote result that caused the end of a coalition government with the MDC party that Biti belonged to, and the loss of his Cabinet seat.

Some $2 billion in Zimbabwe’s diamond revenues have been unaccounted for since 2008, according to Global Witness, which campaigns against natural resource-related conflict and corruption and associated environmental and human rights abuses.

SUSPICION OF 'BLOOD DIAMONDS’

Zimbabwe is the world’s fourth-largest diamond miner, producing an estimated 17 million carats this year, according to the Kimberley Process that is charged with ensuring that gems reaching world markets don’t bear the taint of being “blood diamonds.” Marange diamonds have been declared conflict free.

But controversy and secrecy have swirled around Marange since the earth opened up and exposed its riches.

The discovery lured thousands of impoverished Zimbabweans to dig in the alluvial deposit. In 2008, the Zimbabwean army sealed off the 130,000-acre area to take control of the mining. At least 200 people died in a mass expulsion of people living in the closed area, Global Witness and other rights groups have alleged.

Chinese construction contractors built an airfield at the Marange diamond fields. Executive planes arrive there and at a bonded warehouse alongside the runway at Harare’s main airport, without traceable flight plans or having to go through customs and immigration formalities, say commercial pilots who have complained of the irregularities to aviation authorities. They insisted on anonymity because of fears for their safety.

Mugabe’s government and ZANU-PF have repeatedly denied diamond revenues have been siphoned off.

But Global Witness says otherwise.

“Our research has exposed links between Zimbabwe’s two largest diamond mining companies and the Zimbabwean military and other ZANU-PF insiders,” said Emily Armistead, senior campaigner for Global Witness.

“It is not clear where the money is going,” she said. “It appears there is a mixture of corruption enriching specific individuals and some funds going to security operations. Our concern is that it could be used to fund repression and human rights abuses.”

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