$2 billion ‘theft’ of Zimbabwe’s diamonds

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Allies of President Robert Mugabe have carried out the “biggest single plunder of diamonds” since the days of Cecil Rhodes, stealing Zimbabwean gems worth $2 billion (£1.26 billion) over the last four years, according to a new study.

$2 billion 'theft' of Zimbabwe's diamonds

Zimbabwe’s Marange field has one of the world’s biggest diamond deposits Photo: AP

By Peta Thornycroft, Aislinn Laing in Johannesburg

2:17PM GMT 12 Nov 2012

The revenues from Marange alluvial diamond field in eastern Zimbabwe, one of the richest such reserves in the world, have enriched Mr Mugabe’s Zanu-PF party, allowing it to build a war chest for the election expected next year. Senior figures in the regime and the military hierarchy are also believed to have profited, while funds owed to the state have simply disappeared.

“Hundreds of millions of dollars owed to Zimbabwe’s Treasury have been lost in both illegal and legal trades,” reads the report by Partnership Africa Canada, a campaign group.

In February last year, Tendai Biti, the finance minister, disclosed that $300 million collected by the Zimbabwe Minerals Development Corporation (ZMDC) and the Mineral Marketing Commission had not been handed over to the state. Meanwhile, a stockpile of 2.5 million carats, conservatively valued at $200 million, simply went missing.

The study concludes that most illicit revenue is raised through a “sophisticated price manipulation scheme” whereby diamonds are sold for knock-down prices within the legal monitoring system in Harare, then resold in trade centres like Dubai and India for twice the original price, with both the sellers and their Zimbabwean allies taking a cut. In all, some $2 billion has been lost to the state since 2008.

Chinese nationals and state-owned companies are the largest investors in Marange. Many work in partnership with Zimbabwean military chiefs, who have seats on the boards of diamond mining firms.

Mr Biti is expected to present the 2013 budget to parliament next week. He will probably be forced to cut spending on social services because the expected diamond revenues have not materialised.



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