Zimbabwe Expects $600M Diamond Boost to Budget ’12

Zimbabwe’s Treasury is expecting diamond exports to boost the country’s export revenues by $600 million in 2012 following the recent Kimberley Process decision to permit exports from the Marange mines.

“On November 1, 2011 in Kinshasa, DRC, the Kimberly Process Certification Scheme reached a compromise, allowing the sale of our diamonds from Marange,” Finance Minister Tendai Biti told Parliament presenting the 2012 national budget on Friday. “Pursuant to this, we have held extensive discussions and consultations with the Minister of Mines and the diamond producers, with the result that we have been assured of minimum $600 million additional revenue to the fiscus for 2012.”

The Treasury received dividends from diamond sales amounting to $122.3 million during the period January through November, of which $41.6 million was collected from sales made in 2010. Fresh sales in 2011 amounted to $80.6 million, down from $174 million reported in 2010.

Sales were made throughout the year despite the Kimberley Process ban on exports until the November decision. While the Kimberley Process agreed to allow exports to continue from the mining operations Mbada Diamonds and Marange Resources, governments in the U.S. and European Union upheld there sanctions on these exports. The Rapaport Group renewed its call on the diamond trade to avoid diamonds mined at the Marange fields.

Biti called for increased transparency in the government’s handling of its diamond revenues and expressed the urgent need to work on a Diamond Bill which would govern the sector.

He noted that diamond revenues continued to fall below expectations due to the delay in implementation of planned projects at Marange. Biti stressed that the Treasury would remain cautious in future budgeting on diamond revenues until a clear pattern and precedent has been established and the implementation of the proposed Diamond Act.

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