Diamond mining will turnaround economy

THE Reserve Bank governor, Dr Gideon Gono says that Zimbabwe’s economy could be turned around in the next few years if the country does not continue to lose revenue from illegal dealing in the mining industry. He said that Zimbabwe is currently losing US$1.2 billion a month to illegal diamond dealing.

Dr Gono made this shocking revelation at the quarterly outstanding law officers’ award ceremony held in the capital, Harare.

He said over 500 syndicates operate in the eastern region of Manicaland where diamonds were discovered in the last four years.

According to Gono, the amount currently being lost via the illegal syndicates is more than enough to turnaround Zimbabwe’s economy and help deal with some of the economic challenges facing the country.

"A reliable estimate shows that US$1.2 billion per month would be realized from diamond sales in the country, enough to solve the economic challenges the country is currently facing,” said the Reserve Bank governor.

"We have investors who are able to mine and bring US$1.2 billion every month while we only need US$100 million a month for all our difficulties to go,” he added.

Dr Gono also indicated that the problem of illegal dealing is also witnessed in the gold mining sector.

According to the Reserve Bank governor Zimbabwe used to produce 27 tonnes of gold yearly, but it has now gone down to less than five tonnes – a fivefold contraction.

Dr Gono said law enforcement officers should arrest these illegal dealers and send a clear message to would-be illegal traders in the county and abroad.

In the past two months, diamond smugglers from Equatorial Guinea, the Democratic Republic of Congo, Mozambique, Mali, Congo, Senegal, Angola, Zambia and the Central Africa Republic were arrested in Manicaland and deported by immigration authorities.

Many foreigners have been frequenting the diamond rich area undetected and it is believed that diamonds worth millions of dollars may have been smuggled out of the country in the past few months.

Diamond panning activity is rampant in the Chiadzwa area of the province and many foreigners frequent this area in search of the precious stone to smuggle out of the country.

Analysts believe Zimbabwe has enough mineral deposits to turnaround the economy if the production and marketing is properly managed. The country boasts gold, platinum and chrome as the principal endowments. The country’s gold reserves are among the largest in the African region, while it hosts the second-largest platinum reserves in the world.

Diamond mining started only four years ago with the discovery of kimberlites in the Manicaland region, but already the industry is fast becoming the major foreign currency earner. With an estimated US$1.2 billion being lost to smuggling every month, the country stands to benefit from a well-managed diamond production industry.

The mining industry earns Zimbabwe over 40% of its total export revenues. Conservative industry estimates say the industry could account for over 60% of export revenue in the next ten years.

Zimbabwe, however, has not been able to derive the full benefits of its myriad mineral resource base. Rather than expanding, the industry is forecast to register an average annual contraction of 1.5% during the 2008-2012 period.

Diamond mining will turnaround economy – Gono