Diamond mining is one of Africa’s largest industries—and with being one of the world’s most precious and highly coveted commodities comes high demand and ongoing conflicts. It wasn’t until recently that the diamond mining industry started to take notice of Zimbabwe, because traditionally, South Africa and Botswana have been better-known hubs of diamond reserves. However, with major companies like Rio Tinto entering Zimbabwe, awareness of the country as a major contender in diamond mining has started to accelerate. With conflict diamonds, or blood diamonds, starting to raise awareness and new legislatures taking place, Zimbabwe has gained international headlines. Most recently, there has been debate over the Zimbabwean new government plan to take 100 per cent ownership of alluvial diamond mines in the country.
Alluvial diamond mining involves digging and sifting through sand, gravel and mud using a sieve or shovel. The diamonds have been removed from the kimberlite from natural erosion and then settled in a new environment such as a river bed or shoreline. The recent Zimbabwe legislation to take 100 per cent ownership for all alluvial diamond mines in the country was announced by President Robert Mugabe and Prime Minister Morgan Tsvangirari.
In addition to this massive takeover, the government will own a 51 per cent share in all other mining projects. This includes minerals such as non-alluvial diamonds, platinum and gold. Economic Indigenisation Minister Saviour Kasukuwere said to press, “The shareholding in the mining sector as it relates to the state shall be as follows: 100 per cent for alluvial diamonds.”
With these new enforcements, communities will also receive 10 per cent of gross profit from the mining of mineral resources. These funds aim for the betterment of Zimbabwe communities and neighborhoods and will go towards a number of different community projects including education, infrastructure and healthcare.
Indigenization and Economic Empowerment Act :
In 2007, the Indigenisation and Economic Empowerment Act (IEEA) was conceptualized in Zimbabwe. This act means that local Zimbabweans are entitled to own 51 per cent in all foreign-owned companies. The IEEA has historical significance as part of the government’s plans to correct wrongs that happened in Zimbabwe’s past in regards to the issue of land redistribution.
The IEEA targets foreign-owned companies that operate in Zimbabwe and are valued at more than $500,000. For those companies, they must sell at least 51 per cent of their shares to Black Zimbabweans indigenous to the country by 2015. This affects big miners that have stakes in Zimbabwe such as Rio Tinto and Anglo Platinum.
The Herald newspaper, a state-controlled newspaper in Zimbabwe, reported that outside of alluvial diamond mining, the planned law would affect all other new companies that have not yet met the country’s indigenization requirements.
The Kimberley Process:
The Marange diamond field is one that has gained notoriety as a major site of reported diamond smuggling and human rights violations. Marange, in eastern Zimbabwe, was reported by Human Rights Watch to be a culprit of forced labour of both adults and children that included beating and torturing local villagers. Trade from the area was suspended.
In May 2000, The Kimberley Process was created to end illegal trade in diamonds such as blood diamonds that are used to fund conflict and war. Governments and the diamond industry adjoined in Kimberley, South Africa to discuss the abatement of trading diamonds in conflict zones. The Kimberley Process was a result of this, which set up an international system for the export and import of diamonds. Marange has been under speculation under the Kimberly Process, thus being suspended. Savior Kasukuwere, Youth Development, Indigenization and Empowerment minister said that the government cabinet has now resolved that alluvial diamond mining in Marage fields would commence. “This is the position of government and those companies will be sitting down with us to discuss [it] but the broad principle is that the alluvial diamonds belong to the state and they must benefit the people of Zimbabwe,” Kasukuwere said to The Herald.
However, Zimbabwe has had troubles selling the Marange field diamonds because of the ban from Kimberley Process, barring its members from dealing with diamonds and affirming that diamonds from the Marange field may have been spawned from human rights abuses.
Zimbabwe has certainly undergone changes within the diamond mining sector and with recent changes in legislation and ownership requirements, many foreign-owned firms will have to relinquish part ownership to local Zimbabweans. Though these requirements are aimed to help the local people of Zimbabwe, only time will tell what parties will actually benefit from the implementations.
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