Percentage royalty received
Zimbabwe Government
10
Minerals Marketing Corporation of Zimbabwe
0,8
Zimbabwe Mining Development Corporation
2,5
Mbada
5
Canadile
5
Production costs
77,42
Diamond critics have begun analysing the effects of the sale of Zimbabwe's
diamonds recently and how it is likely to benefit society.
Some international diamond activists have warned the international community
of buying the blood diamonds, saying doing so will see more human rights
abuses.
Zimbabwe on August 11 sold 900 000 carats or 180 kilogrammes of Marange -
Chiadzwa diamonds, which realised US71 million or US$ 80 per kilogramme.
Above there is a table which shows how the royalties will be broken down,
with the bulk of the proceeds going to funding "production costs". It is not
clear who will benefit from these production costs. The Zimbabwe Mining
Development Corporation (ZMDC) will receive 2,5 percent but because it
belongs to government, it will pay it a dividend, according to Mines
Minister Obert Mpofu.
The current stockpile of diamonds has been put at 900 kilogrammes or 4,5
million carats with an estimated worth of US1,7 billion.
"But 4.5 million at US$80 per carat comes to a lousy US$360 million and
according to the split above the government will only realise US$36 million
in royalties. Perhaps what they meant was that had the gem quality diamonds
not been filtered out for sale to buyers in Manica, Mozambique, then the
average per carat would be far higher," said a critic.
"It also does not help build confidence in the proposed split of diamond
proceeds to learn that the chief executive and general manager of the
Zimbabwe Mining Development Corporation Dominic Mubayiwa and three of his
top men at the Corporation have been suspended for two months."
Mubayiwa, his group finance director Robert Karemba, group technical
services manager Albert Chitambo and corporate secretary and legal advisor
Tichaona Muhonde were suspended on 26 July 2010 after the huge three storey
home Mubayiwa is building in Borrowdale came under the spotlight.
The four were suspended by the new ZMDC board chairman Godwills
Masimirembwa.
"Some of us will recall this was the gentleman (Masimirembwa) who was in
charge of reducing shop selling prices during our hyper-inflationary era and
it was the pursuit of this policy that led to the likes of Makro and other
stores being "legally" looted of all their working capital after prices of
goods were reduced and these goods were then bought by the team and their
cronies who had enforced the price reductions," said the critic.
A US-based Rapaport Diamond Trading Network announced a Zimbabwe diamond ban
last week. Rapaport is one of the largest buyers of diamonds in the US.
"I think the significance of this is that the US diamond market is one of
the biggest in the world, and when they say they will only purchase a
diamond when they are sure that diamond is not from the Marange diamond
fields in Zimbabwe, they are taking a moral stand," says Tiseke Kasambala, a
senior researcher on Zimbabwe for Human Rights Watch in Johannesburg.
(subhead) Diamond industry's image problem
The Christian Sceince Monitor said it was not a surprise that the diamond
industry was taking steps to keep politically-tainted stones out of
circulation.
"The market is glutted with diamonds, many of them coming out of Russia and
other markets that were once off limits, and movies like the action thriller
"Blood Diamond" and the real-life trial of former Liberian President Charles
Taylor for human rights crimes do nothing to improve the image of a stone
that was once considered to be the ultimate symbol of love," it said last
week.
"Yet the very same global diamond industry watchdog created to clean up the
diamond trade in conflict zones (the Kimberley Process) has given Zimbabwe's
diamonds a clean bill of health, sending a mixed signal to consumers looking
for a guilt-free purchase. And if US diamond buyers can do without a few
hundred thousand Zimbabwean stones, then it is also true that Zimbabwe
sellers can do without 10,000 US-based diamond traders. Which again raises
the question: will this boycott work?"
"You have to ask yourself is there another market, and my experience is that
there is always another market for minerals," says Laura Seay, an assistant
professor of political science at Morehouse College who has studied the
minerals market in conflict zones in central Africa. "One of the flaws of
the Kimberley Process is that it was designed around conflict, not around
inhumane conditions or other more ambiguous human rights abuses such as
child labour or forced labour."
One of the positive effects of the Kimberley Process, Seay adds, is that it
did manage to raise awareness among consumers about where diamonds often
come from, and how to avoid funding conflicts with one's spending habits.
"If Rapaport can be successful in raising awareness about Zimbabwe diamonds,
then it could be effective. And it could push the Kimberley Process to look
more broadly at other human rights abuses."
Looking east
To be sure, America is one of the largest markets for diamonds - even in
tight economic times such as these. But there are other emerging markets,
many of them in Asia, which are experiencing rapid economic growth. Last
week, China replaced Japan as the world's second largest economy after the
US, and it stands ready to overtake the US in the coming decade.
"I think there are a lot of other buyers for diamonds out there, such as
India, which are quite keen to buy diamonds," says Raymond Louw, editor of
the Southern Africa Report in Johannesburg. "I think this is a going to act
as a token rather than a debilitating measure for the regime of [Zimbabwean
President] Robert Mugabe."
"If [the Rapaport group] mobilises other nations to ban our gems, then we
will be left with no other options other than embarking on the Look East
Policy, which over the past 10 years kept the country moving despite illegal
sanctions," says Zimbabwe's Minister of Mines, Obert Mpofu in a Monitor
interview.
"We will sell our stones to countries...We have countries like China,
Malaysia, Russia, India and other Asian countries where we can market our
diamonds."
No comments:
Post a Comment