MAC: Mines and Communities

Zimbabwe's President Mugabe nationalises diamond industry

Published by MAC on 2016-03-11
Source: Statement, UPI,, VOA, African Indy

More than $15 billion in diamonds looted, says Mugabe

By Brezhnev Malaba

3 March 2016

In an astonishing confession, Zimbabwean President Robert Mugabe has revealed that diamonds worth more than $15 billion have been looted in the eastern mining area of Marange.

Speaking in a belated 92nd birthday interview on state-run Zimbabwe Broadcasting Corporation on Thursday night, Mugabe said the state treasury received less than $2 billion. Mines Minister Walter Chidhakwa has previously stated that the amount which reached the public purse was $600 million.

In frank remarks that have stunned Zimbabweans, Mugabe also revealed that the country has failed to learn from neighbouring Botswana, Namibia and Angola on how to manage the diamond sector.

He spoke glowingly of Botswana President Ian Khama, saying he has fared much better than Zimbabwe in ensuring that diamond income contributed to socio-economic development. Mugabe has a testy relationship with Khama, who accuses the Zimbabwean strongman of violating human rights and rigging elections. Such praise is rare.

“We have not received much from the diamond industry at all. I don’t think we have exceeded $2 billion yet we think more than $15 billion has been earned,” Mugabe said. Last year, Mugabe’s government sent a team of technocrats to Botswana to learn international best practice on diamond mining, but analysts said the move was coming too late.

Diamonds have been mined in eastern Zimbabwe since 2006. In 2011, government officials announced that the country had vast gemstone deposits which would account for 25 percent of world rough-diamond supply.

In 2013, the state-owned Zimbabwe Mining Development Corporation (ZMDC) projected that the Marange fields would produce 16,9 million carats, making the project “the single largest in the world in terms of carats produced annually”. The country stood to earn upwards of US$2 billion per year, government officials claimed, and yet in 2012 the then Finance Minister Tendai Biti complained that only a measly US$19 million reached the state treasury.

The Zimbabwean leader defended last week’s dramatic eviction of nine diamond-mining companies from the Marange area, including Chinese firms Anjin and Jinan. “The state will now own all the diamonds, to cut and polish,” he added.

When asked whether the eviction of the Chinese companies was straining bilateral relations with Beijing, Mugabe said he foresaw no problem. “I don’t think it has affected our relations at all,” Mugabe said, adding that China has many firms operating in Zimbabwe, therefore relations cannot be defined by one or two firms.

One of the evicted firms, Anjin Investments—a joint venture between the government-run ZMDC and China’s Anhui Foreign Economic Construction Group—boasted in 2011 that it had become the largest producer of rough diamonds on the planet. Four years down the line, Anjin’s real production statistics are shrouded in secrecy.

The government’s auditor-general Margaret Chiri reported last year that all the diamond companies were now bankrupt, a revelation which jolted the government to take action. The eviction of the diamond companies came a month after the governor of the Reserve Bank of Zimbabwe, John Mangudya, complained about the non-transparent operations of the firms.

Mangudya, lamenting the difficulties faced by the government in funding this year’s $4 billion national budget, said the authorities did not know the gem production volumes or what was being exported.

Minister Chidhakwa said the government has now formed the Zimbabwe Diamond Consolidated Company to exclusively mine the Marange area.

Former Finance Minister Claims Mugabe Was Aware of Looting of US$15 Billion Diamond Revenue

Blessing Zulu

5 March 2016

WASHINGTON — Former Finance Minister Tendai Biti, who was in Zimbabwe's Government of National Unity (GNU), says he furnished President Robert Mugabe with all details that diamond revenue from Marange in Manicaland province was being looted but he refused to act.

The GNU was a coalition government between three major political parties in Zimbabwe formed on February 13th, 2000, after the signing of a Global Political Agreement.

The need for a coalition government arose after the 2008 parliamentary as well as presidential elections which were marred with violence and human rights violations.

In a belated 92nd birthday exclusive interview on state-run Zimbabwe Broadcasting Corporation on Thursday, Mr. Mugabe said the state treasury received less than $2 billion from the controversial diamond fields.

The president said, “We have not received much from the diamond industry at all. I don’t think we have exceeded $2 billion, yet we think more than $15 billion has been earned.”

But Biti dismissed Mr. Mugabe’s remarks saying, “These are words and sound bites of a hypocrite and a dishonest person.

“When I was in government I gave him the figures. I gave him the statistics. I gave him the secret reports produced in Brussels. I gave him the secret report produced by Kimberley Process … and the reports showed that diamond mines were producing over US$2 billion per year but we were getting nothing.”

Biti said Mr. Mugabe was dismissive when he approached him with the evidence of looting. “No one supported me. The reason was very simple. Zanu-PF took a deliberate decision that the diamond companies would not give money to treasury for fear that an MDC (opposition Movement for Democratic Change and coalition partner) minister would perform and make a difference. And we also knew that these diamond companies were paying rent to private individuals. And one of the things Mugabe used to say to me was, why go after diamonds, how about platinum …”

In 2013, the state-owned Zimbabwe Mining Development Corporation (ZMDC) projected that the Marange diamond fields would produce 16,9 million carats, making the project “the single largest in the world in terms of carats produced annually.”

In 2012, Partnership Africa Canada, a member of the Kimberley Process charged that at least US$2 billion worth of diamonds had been stolen from Zimbabwe's eastern diamond fields and had enriched President Mugabe's inner circle, international gem dealers and criminals.

Zimbabwe's Marange fields have seen "the biggest plunder of diamonds since Cecil Rhodes," the colonial magnate who exploited South Africa's Kimberley diamonds a century ago, Partnership Africa Canada said then.

But then Mines Minister Obert Mpofu dismissed the report. Mpofu told the Voice of America that the report was “nonsensical” and the work of detractors.

“The first thing about detractors is … Who do they want to please by raising issues which are only nonsensical? They always run around to do those things. This is sponsored by their governments who imposed sanctions on us. It is real a desperate attempt by people who are criminals just to create a smokescreen.”

Biti said in his 2012 budget he had been promised $600 million in diamond revenue for the national treasury to help re-finance crumbling health, education and other public services, but only one-fourth of that pledge was received.

Mining Companies Ordered to Vacate

Mines and Mining Development Minister Walter Chidhakwa has now ordered all the nine diamond mining companies to cease their operations and prepare to leave Manicaland in three months following disagreements on how they will constitute the Zimbabwe Consolidated Diamond Company. The companies have now dragged the government to court.

Companies mining diamonds include Anjin Investments, Diamond Mining Company, Jinan, Kusena, Marange Resources and Mbada Diamonds. The government holds 50% shareholding in all the firms and now it once to merge them and form one consolidated company.

CNRG Position on the Ongoing Challenges in Marange Diamond Fields

Centre for Natural Resource Governance Position on the current challenges in Marange Diamond Fields

10 March 2016

The government of Zimbabwe, in particular President Robert Mugabe and Mines Minister Walter Chidhakwa have at long last confessed that the diamond mining companies in Marange have robbed Zimbabwe of at least $15 billion. These confessions, though belated, are important as they confirm what CNRG has consistently claimed – that Zimbabwe’s diamond sector was designed to benefit the country’s ruling elites, including the top military brass, at the expense of the nation. The choosing of shelf companies with opaque shareholding structures and military connections to mine such lucrative diamond fields was a harbinger of worse things to come.

President Mugabe claimed that ‘well over 15 or more billion dollars’ have been lost since the entry of capital in Marange. President Mugabe’s claims cannot be said to be exaggerated since he is privileged with intelligence information generated by state officials who had access to Marange. His claims also corroborate claims made by former mines Minister Obert Mpofu in November 2011 shortly after the export ban imposed by the Kimberly Process Certification Scheme had been lifted. Obert Mpofu promised to deliver $2 billion in gross revenues from diamond exports annually (Thornhill, 2011). Mpofu’s estimate of $2 billion potential annual revenues means Zimbabwe could have lost 10 -15 billion since 2009. Former Finance Minister Tendai Biti and Member of Parliament for Bulawayo South Eddie Cross both agree with President Mugabe that approximately $15 billion was stolen from Marange.

In 2008, at the height of artisanal mining in Marange, the then reserve Bank Governor Gideon Gono estimated that the government was losing $1.2 billion a year to artisanal miners. Gono performed two roles in the Marange diamond rush which gave him first-hand experience on the volume of illicit trade involved. First he was at the helm of RBZ when the Central Bank purchased diamonds from artisanal miners in Marange between 2006 and 2007. Secondly, Gono is mentioned in a US diplomatic cable that he personally dispatched his agents to buy diamonds for him from artisanal miners.1 This means Gono’s estimate was not a wild guess but rather was drawn from the statistical data gathered from his involvement in Marange. If therefore artisanal miners could earn in excess of $1.2 billion annually then mining corporations could earn even more using high tech equipment and with access to markets.

It is therefore accepted that diamonds worth plus or minus 15 billion dollars were stolen from Marange. There are many questions than answers on how government allowed this looting to go on for so many years. Further, with government owning 50% shares in all the diamond mining companies except in Marange Resources where it had 100% ownership, it is dishonest on the part of government to blame the ‘companies’ and distance itself from a process they initiated and fully participated it. It was the Executive that corruptly invited the corporations to Marange, arm twisted regulations to license undeserving entities, undermined state institutions through diversion of revenues, denied Zimbabwe’s Parliamentary Portfolio Committee on Mines and Energy access to Marange on two occasions and shielded the thieving corporations from public scrutiny through anti-sanctions rhetoric and state propaganda. It was clear the bubble would burst at some point. Government must take full responsibility for the Marange plunder as the looting was initiated an aided by the government.

Some are calling on Zimbabwe to observe the KPCS minimum standards. However the KPCS was complicit by way of certifying and indeed sanitizing the Marange diamond looting. If the government was not in control of Marange diamond revenues, as admitted by President Mugabe and highlighted by former Finance Minister Tendai Biti, then questions arise on how and why the KPCS would certify such diamonds as ‘conflict free’. The KPCS connived with Zimbabwe’s ruling elites and diamond mining firms to undermine state institutions in Zimbabwe by sanitizing illegal mining and exportation of Zimbabwe’s diamonds. In 2013 the EU which also chaired the KPCS Working Group on Monitoring lifted sanctions on Zimbabwe Mining Development Corporation to facilitate the entry of Zimbabwe’s diamonds into Europe despite the overwhelming evidence that Marange diamond revenues evaded central government control. Thus the KPCS is part of the problem in Marange and certainly not the solution.

It is our hope that President Mugabe’s confession that $15 billion was looted from Marange was not just a political statement meant to justify the overthrow of one looting gang by another but rather a genuine discovery that must trigger action to hold the perpetrators accountable. Marange diamonds are a national asset that must not be trivialized to settle political scores. $15 billion is a huge sum that must warrant domestic and international investigation. The involvement in Marange of mysterious international criminals such as Sam Pa, who has a ruinous footprint in unstable African countries suggest Marange diamonds were subject to organized crime which include money laundering, undermining the smooth running of a legitimate government and possibly financing terrorism. Sam Pa, who uses several aliases which include Sampa, Xu Songhua, Sa Muxu, Samo, Sam King, Xu Jinghua, Ghui Ka Leung Tsui King Wah, Ghiu Ka Leung, Sam King, Antonio Famtosonghiu Sampo Menezes, was arrested in China last October for as yet unclear reasons.

The Zimbabwe government must also explain how private planes were allowed to land in Marange and depart without ever being searched to determine the quantity, volume and value of the diamonds they were exporting.

To show the nation that he is indeed grieved by the loss of $15 billion to organized crime and determined to lead Zimbabwe from this economic Bermuda Triangle, President Robert Mugabe must urgently do the following:
1. Set up an independent commission of inquiry to investigate what transpired in Marange right from the time mining licenses were issued to the present and make recommendations on how best to plug the leakages. The commission’s report must be made public within a reasonable timeframe, say one month after its submission to the President.
2. Allow and capacitate the Commission to carry out extra-territorial investigations to locate foreign syndicates who participated in the criminal activities involving Marange diamonds
3. Carry out a forensic audit of all the diamond firms in Marange and investigate the marketing and sale of Zimbabwe’s diamonds
4. Authorize the Police and Anti Corruption Commission to collaborate and prosecute those individuals and syndicates that participated in the plunder.
5. Re-visit the 2013 Chindori Chininga report on Diamonds. This report was never fully debated in parliament despite it having the key to unlock the Marange potential.

In the meanwhile government must cease all mining operations and keep the remaining diamonds in the ground till a salubrious new mining regime has been established. The $15 billion Marange loss demonstrates that there is no wisdom in extracting a precious resource when sound governance policies are not in place. Doing so will benefit a few connected individuals at the expense of the whole country.

There is a re-emergence of police brutality against Marange villagers and artisanal miners. Police midnight raids in people’s homes and beatings of citizens must be stopped. CNRG calls on government to exercise restrain when dealing with citizens who are driven into artisanal mining by joblessness and abject poverty. CNRG condemns in the strongest terms the abuse of citizens by the same government that deployed the army and police to guard mining corporations that looted diamonds worth over $15 billion.

Contact Details
Centre for Natural Resource Governance
90 Fourth Street, Harare
Email: farai[at]

Zimbabwe diamond firms revolt, to sue Gov’t over mining ban

Cecilia Jamasmie

26 February 2016

At least one of the diamond miners that saw their licences revoked and were asked to leave Zimbabwe earlier this week because their licences had expired, is planning to sue the African nation’s government for breach of contract.

Speaking to Reuters, Zimbabwe's Diamond Mining Company’s (DMC) manager Ramzi Malik said the firm’s contract with the State clearly stipulated that renewing licences was the responsibility of the government, through its state mining arm Zimbabwe Mining Development Corporation (ZMDC).

DMC is not alone. Industry sources told The Zimbabwean that more affected companies are looking for a way out of the situation, which includes legal actions or even international arbitration to challenge the government’s decision.

The government has not replied to the mining companies complains yet, but state-controlled Herald newspaper quoted Mines Minister Walter Chidhakwa Friday saying there were “not going back” on the government’s decision, which he qualified as “not negotiable.”

President Robert Mugabe’s government has been accused of a lack of clarity on the particular issue and the country’s diamond industry in general. A decision to merge miners into the Zimbabwe Consolidated Diamond Company has also been controversial, and there is speculation that Rio Tinto’s withdrawal from the country last year, was in part due to the increasingly hostile business climate.

Authorities have increased security at the mines in the Marange District after news of looters invading the country’s diamond fields right after operations ceased.

Zimbabwe's president kicks out private diamond miners, nationalizes industry

By Dmitry Rashnitsov

22 February 2016

HARARE, Zimbabwe - Zimbabwe President Robert Mugabe on Monday ordered the expulsion of eight foreign diamond mining companies and turned over all mining operations to the newly formed, government-run Zimbabwe Consolidated Diamond Co.

Several companies abandoned their equipment, including: Anjin Investments Ltd., the Diamond Mining Co., Jinan Mining Ltd., Kusena Diamonds, Marange Resources Ltd. and Mbada Diamonds. These organizations were invited to nationalize their assets but they chose to stay as private entities and give up whatever little political capital was built up.

"Since they no longer hold any mining titles, these companies were notified this morning to cease all mining with immediate effect," Zimbabwe Mines Minister Walter Chidakwa said.

Zimbabwe ranked ninth in total diamond output in the world with 4.7 million carats in 2014, according to the fourth annual report on the global diamond industry prepared by the Antwerp World Diamond Centre and Bain & Co. Last year, Zimbabwe's production fell by 1.6 million carats and the government received $23 million in royalties and other fees from diamond mines, down from $84 million in 2014.

Australia, Germany, Japan at high environmental risk due to reliance on coal — report

Cecilia Jamasmie

28 January 2016

Water stress, air pollution concerns, new policies, carbon capture and storage challenges, as well as competition from renewables and gas, are some of the main issues coal companies need to address immediately, a new study suggests.

Published Thursday by the University of Oxford's Smith School of Enterprise, the report details the level of exposure to environment-related risks of the world’s main coal companies.

Ben Caldecott, director of the Stranded Assets Programme at the University of Oxford's Smith School of Enterprise and lead author, says the coal industry is exposed to uncertainty over future demand for thermal coal for power stations from countries such as China and India, which are increasingly relying on domestic production and other forms of energy.

"The global coal industry is exposed to increasing uncertainty over future demand for thermal coal for power stations from countries such as China and India, says the University of Oxford's Smith School of Enterprise."

The document outlines a comprehensive risk assessment of the main 100 coal-fired utilities, the top 20 thermal coal miners, and the 30 most important coal-to-liquids companies.

The study also identifies the countries more likely to be affected by environmental problems due to their reliance on coal, or by what the experts call the “utility death spiral.”

That phenomenon, explains the report, occurs as solar and wind energy take market share from the centralized electricity grid and fossil fuel coal generators, forcing them to raise distribution charges or close generating capacity.

Australia, Germany and Japan lead the list of major global economies that are at significant risk of a “utility death spiral” due to their current reliance on coal, according to the study:
Australia, China, Germany at high environmental risk due to reliance on coal — report

Taken from "Stranded Assets and Thermal Coal – An analysis of environment-related risk exposure," January 2016.

The report was funded by Norges Bank Investment Management, which manages Norway's $1.15 trillion sovereign wealth fund and is reducing its coal exposure along with Allianz, the large German insurance company.

The coal industry had been battered in recent years by competition from cheap gas, declining demand from China and clean-air regulations that have raised costs for burning the fuel.

Concerns about carbon emissions from power stations coupled with a deep global glut in thermal coal production has pushed its spot price to long term lows at around $50 a tonne, resulting in a lengthening line of mine closures and production cuts, particularly in North America and Indonesia.

The report can be downloaded at -

Australia's coal-fired power stations at risk of 'death-spiral' - report

28 January 2016

Australia's power sector is at risk of a "utility death spiral" due to its reliance on coal, along with utilities in the US, Japan and Germany, according to a report highlighting the environmental-related risk of coal producers.

Additional pressures on the coal industry is coming from the shift by countries such as China and India to rely on domestic sources for coal, rather than imports, to feed their surging demand for electricity generation.

The report, by the University of Oxford's Smith School of Enterprise, pointed to the emergence of renewable sources of energy such as solar and wind, along with competition from gas as additional pressures for the sector.

Other issues include water stress, concerns over air pollution, changes to government policies and the challenge of carbon capture and storage technology, the report noted.

A 'death spiral' occurs as new energy sources take market share from coal-fired power stations, forcing stations to close while also undermining the economics of the centralised electricity grid by forcing higher distribution charges, according to the report.

The use of so-called 'sub-critical' coal-fired power stations which are poor converters of energy from coal into electricity, use high volums of water for cooling and release high levels of carbon emissions puts the utilities and coal companies at particular risk in countries such as Australia, according to work by the group.

That risk declines with the use of new generation technology, so-called "super-critical" power stations, which are more expensive to build.

The report comes after US energy giant ExxonMobil this week predicted that global demand for coal would peak in about 2025 and then fall into terminal decline.

In contrast to coal's decline, demand for natural gas would increase by 50 per cent over the next 26 years, ExxonMobil predicted in its 2016 Outlook for Energy report.

Investment firms now evaluating climate risks in big resource plays

The shift to "strategic resilience" to climate change could be a game-changer in financing for major projects.

Bruce Cheadle

The Canadian Press

2 February 2016

OTTAWA—The Canada Pension Plan Investment Board and Quebec’s Caisse de depot are among institutional investors seeking greater transparency from three of the world’s biggest mining conglomerates on how they’re dealing with climate change.

The “strategic resilience” resolutions put forward by a coalition of international investors ask giants Rio Tinto, Glencore and Anglo American to provide investors with more information on the risks and business opportunities from a changing climate, starting in 2017.

The resolutions follow a similar move last year that targeted oil giants BP and Shell.

Four of the 10 biggest pension funds in the world are part of the British-based “Aiming for A” investor coalition, including the Canada Pension Plan and its $272.9 billion in assets.

“We’re supportive of the work ‘Aiming for A’ does on transparency,” said Dan Madge, a spokesman for the CPP investment board. “We see this as an important thing for companies to do, which is why we’re lending our name and our influence.”

Investors say a new international climate deal brokered in Paris in December puts added pressure on companies to assess their long-term strategic resilience in a carbon-constrained world.

Last week, the Liberal government announced that all major resource project applications in Canada are now required to include an assessment of their upstream climate impacts, including the emissions created in the extraction and processing of oil and gas destined for pipelines.

Mark Carney, the Canadian governor of the Bank of England, warned the investment and insurance communities last fall about the potential for stranded assets _ unburnable reserves of coal, oil and gas _ on a warming planet limited by future carbon budgets.

The shareholder resolutions filed by the “Aiming for A” coalition are not shaming exercises or publicity stunts, but rather investor efforts to ensure companies come to grips with the long-term business impacts of climate change.

The coalition bills the resolutions as “supportive but stretching” of the targeted companies. Helen Wildsmith, a charity fund manager and founder of the group, described the latest resolutions in December as a means for companies to show investors “that their evolving asset portfolios are resilient across future scenarios.”

Almost 200 countries agreed in Paris in December to limit global warming to less than two degrees Celsius above pre-industrial levels.

ClientEarth, an environmental law non-governmental organization which works with the investor coalition, says the ambitious Paris agenda has global investment implications.

“The Paris agreement was a game-changer for carbon-intensive industries and company reporting,” Alice Garton, a lawyer with ClientEarth, said in a release Monday.

“These resolutions, which we expect will become binding on management after the AGM (annual general meeting) votes, are an excellent example of investors’ desire for more complete information post-Paris.”

Some companies aren’t waiting for shareholders to vote on transparency resolutions. Mining giant BHP Billiton published an investor report, “Climate Change: Portfolio Analysis,” last September.


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