Harare sold diamond fields for a song

2012-04-22 10:00
Unprofessional conduct could be costing the Zimbabwean government much-needed revenue as it emerged that land worth billions of US dollars in diamond deposits was sold for a mere $5 million (R39.2 million).

Zimbabwean Finance Minister Tendai Biti revealed this during a lecture at the University of Zimbabwe this week.

“The government gave away vast tracts of land with diamond deposits for a mere $5 million,” Biti said.

Another case raised by the finance minister was that the government sold an area covering 110km² for $200 million.

The land has deposits of platinum, the second most expensive mineral deposit after diamonds. Zimbabwe is one of the countries with the biggest known platinum deposits.

The deposits were sold to China through its Export-Import Bank of China (China Eximbank).

Biti said the investors should have paid at least $20 billion, considering the deposits were worth $56 billion.

Most of Zimbabwe’s mining rights are owned by Chinese firms and held on behalf of the People’s Republic of China.

Biti blamed the Zanu-PF branch of government for these developments.

“I don’t often agree with Zanu-PF, but one issue (on which) I agree with them is when they say land is the economy and the economy is land. It is unfortunate that the 15 million hectares of land that was acquired during the land reform programme had no exchange component . . . It is dead capital. They know that land is the economy, but they are giving it away almost for free,” he said.

A recent report by Rapaport, a diamond watchdog, revealed the ownership of Zimbabwe’s mineral wealth is shrouded in secrecy to benefit Zanu-PF bigwigs who play a big part in looting.

There are also fears the money raised from the fields would be used during the upcoming elections to suppress opposition – hence the dubious deals.

Economist Eric Bloch said it was sad to note that the amount paid for the platinum and diamond fields amounted to just $205 million, which is lower than the country’s budget for 2012.

“The figure is very small for a country with a budget of $4 billion for this year. The money does not have any value. It’s daylight robbery.”

Zimbabwe is coming out of more than a decade of economic decay. The country is pinning its hopes on the mining industry to reboot the economy.

But bad policies, such as the indigenisation drive and the “Look East” policy, which have given the Chinese carte blanche on state resources, are doing more harm than good.