News / National
RBZ in gems mop up deal
02 Dec 2022 at 14:30hrs | Views
THE government has structured a deal that will see the Reserve Bank of Zimbabwe (RBZ) buying excess diamonds as it moves to shut out unscrupulous dealers that have been dribbling authorities.
Trading in diamonds has been embroiled in scandals where dubious buyers have been outwitting Zimbabwean authorities, triggering massive leakages.
Sources said this week the government had engaged the RBZ to clear the US$80 million debt owed to the Trade and Development Bank (TDB), formerly the PTA Bank.
TDB is the financial arm of the Common Market for Eastern and Southern Africa (Comesa), although membership is open to non-Comesa states.
The Zimbabwe Independent is informed that the government proposed to clear the US$80 million debt through a diamond exchange deal.
The debt has been sitting on the government's books for years. Zimbabwe, was in May 2009 offered US$178 million in fresh credit from Eastern and Southern African Trade and Development Bank to fund mining and agriculture.
The facility also provided liquidity to banks. Already, the government has made a draw-down of US$82 million for the mining sector and agro-industries.
The Independent understands that the RBZ took about 1,5 million carats from the Zimbabwe Consolidated Diamond Company (ZCDC) vaults while another structure was
negotiated that will see the central bank buy excess diamonds from the state diamond enterprise. That arrangement will allow the ZCDC to get funds for operations.
RBZ governor John Mangudya confirmed the arrangement for the apex bank to get excess diamonds from ZCDC to build up national reserves.
However, he could not give more details, stating that the discussions were still underway.
"There is a plan by the government to clear the PTA Bank facility from its books. Going forward we will be getting excess diamonds from ZCDC in terms of Statutory Instrument 189 of 2022 for the building up of national reserves in kind," Mangudya said.
"This includes diamonds, gold, lithium, platinum and palladium. This is necessary to boost the country's reserves, which will also be used to expunge foreign debts at the instance of government
"However, at this stage, it is still too premature to discuss the polishing of diamonds. We are still at the early stages of implementing the Statutory Instrument on building of reserves," he said.
Details at hand show that some of the diamonds will be offloaded at RBZ-owned Aurex Jewellers as part of beneficiation and value addition.
The latest move, however, comes at a time when the government is tightening on the smuggling of the country's minerals by illicit dealers.
In 2019, Zimbabwe deported diamond dealer of Lebanese origin – Hussein Robai over illegal diamond dealings allegedly working in cahoots with some former ZCDC executives.
The deportation of Robai came after there were consented efforts allegedly by some officials at Foreign Affairs and ZCDC to protect the Lebanese.
He was, however, deported only after the intervention of the security services.
The Department of Immigration, therefore, deported Robai over his previous illegal diamond dealing convictions in India.
ZCDC former chief executive officer, Morris Mpofu was charged with criminal abuse of office for allegedly inviting the Lebanese national despite his criminal record, on which charges he was later acquitted.
In September 2008, Robai and Yusuf Ossely were arrested in India with rough diamonds worth an estimated US$900 000.
They were later sentenced to four years in prison for trading in conflict diamonds. Contacted for comment Minerals Mining Corporation of
Zimbabwe (MMCZ) general manager Tongai Muzenda said he was not aware of the arrangement between MMCZ and the RBZ.
"I am not sure whether ZCDC has sold to RBZ or not. If so, it becomes a local sale. MMCZ gets involved when we export," he said, referring further questions to the ZCDC chief executive Mark Mabhudhu.
Mabhudhu declined to comment on the RBZ deal. "I don't think this is the right time to comment on the issue because we are still discussing the modalities of the sales.
These things are still being planned and I can only comment when discussions have been concluded," he said.
Trading in diamonds has been embroiled in scandals where dubious buyers have been outwitting Zimbabwean authorities, triggering massive leakages.
Sources said this week the government had engaged the RBZ to clear the US$80 million debt owed to the Trade and Development Bank (TDB), formerly the PTA Bank.
TDB is the financial arm of the Common Market for Eastern and Southern Africa (Comesa), although membership is open to non-Comesa states.
The Zimbabwe Independent is informed that the government proposed to clear the US$80 million debt through a diamond exchange deal.
The debt has been sitting on the government's books for years. Zimbabwe, was in May 2009 offered US$178 million in fresh credit from Eastern and Southern African Trade and Development Bank to fund mining and agriculture.
The facility also provided liquidity to banks. Already, the government has made a draw-down of US$82 million for the mining sector and agro-industries.
The Independent understands that the RBZ took about 1,5 million carats from the Zimbabwe Consolidated Diamond Company (ZCDC) vaults while another structure was
negotiated that will see the central bank buy excess diamonds from the state diamond enterprise. That arrangement will allow the ZCDC to get funds for operations.
RBZ governor John Mangudya confirmed the arrangement for the apex bank to get excess diamonds from ZCDC to build up national reserves.
However, he could not give more details, stating that the discussions were still underway.
"There is a plan by the government to clear the PTA Bank facility from its books. Going forward we will be getting excess diamonds from ZCDC in terms of Statutory Instrument 189 of 2022 for the building up of national reserves in kind," Mangudya said.
"This includes diamonds, gold, lithium, platinum and palladium. This is necessary to boost the country's reserves, which will also be used to expunge foreign debts at the instance of government
"However, at this stage, it is still too premature to discuss the polishing of diamonds. We are still at the early stages of implementing the Statutory Instrument on building of reserves," he said.
Details at hand show that some of the diamonds will be offloaded at RBZ-owned Aurex Jewellers as part of beneficiation and value addition.
The latest move, however, comes at a time when the government is tightening on the smuggling of the country's minerals by illicit dealers.
In 2019, Zimbabwe deported diamond dealer of Lebanese origin – Hussein Robai over illegal diamond dealings allegedly working in cahoots with some former ZCDC executives.
The deportation of Robai came after there were consented efforts allegedly by some officials at Foreign Affairs and ZCDC to protect the Lebanese.
He was, however, deported only after the intervention of the security services.
The Department of Immigration, therefore, deported Robai over his previous illegal diamond dealing convictions in India.
ZCDC former chief executive officer, Morris Mpofu was charged with criminal abuse of office for allegedly inviting the Lebanese national despite his criminal record, on which charges he was later acquitted.
In September 2008, Robai and Yusuf Ossely were arrested in India with rough diamonds worth an estimated US$900 000.
They were later sentenced to four years in prison for trading in conflict diamonds. Contacted for comment Minerals Mining Corporation of
Zimbabwe (MMCZ) general manager Tongai Muzenda said he was not aware of the arrangement between MMCZ and the RBZ.
"I am not sure whether ZCDC has sold to RBZ or not. If so, it becomes a local sale. MMCZ gets involved when we export," he said, referring further questions to the ZCDC chief executive Mark Mabhudhu.
Mabhudhu declined to comment on the RBZ deal. "I don't think this is the right time to comment on the issue because we are still discussing the modalities of the sales.
These things are still being planned and I can only comment when discussions have been concluded," he said.
Source - NewZimbabwe
