$13 Billion Diamond Revenue Missing says Mugabe, Kicks Out Chinese Firms
ILLICIT trade in Zimbabwean diamonds cost the economy more than $13 billion, forcing the state to create a new company that’s taken control of the country’s deposits, President Robert Mugabe said.
The government on February 22 ordered all diamond-mining companies to end operations and vacate their premises in the Marange and Chimanimani areas and announced the Zimbabwe Consolidated Diamond Co. will take over mining.
The state has earned about $2 billion from the gems as about $15 billion was generated by the industry, Mugabe said Thursday on state television in the capital, Harare. He didn’t provide a timeframe.
“Lots of smuggling and swindling has taken place and the companies that have been mining, I want to say robbed us of our wealth,” Mugabe said. “That is why we decided that this area should be a monopoly area and only the state should be able to do the mining in that area.”
Mining is the biggest source of foreign exchange for Zimbabwe, which has the world’s largest platinum reserves after South Africa and also has chrome, gold and iron ore. Production of diamonds in the nation fell to 420,000 carats in the first five months of 2015 from 660,000 carats a year earlier.
Diamonds prices are at six-year lows after slumping 18% in 2015, the most since the 2008 global financial crisis, according to data from WWW International Diamond Consultants. Demand in China, the biggest market after the US, has shrunk along with a slowing economy and a crackdown on corruption that’s discouraged open displays of wealth.
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