Finance minister Tendai Biti revealed...

Zimbabwe’s finance minister Tendai Biti confirmed that the country’s diamond exports reached $126 million so far in 2010, and that production should amount to three million carats by the end of the year. He projected that production would grow to around four million carats in 2011.

In his budget presentation today before Parliament, Biti stated that Chiadzwa diamond production accounted for 2.7 million carats, and another 300,000 carats were produced at River Ranch and Murowa.

He told Parliament that rough diamond sales in August generated proceeds of $56.5 million and sales from September reached $29.9 million. From those sales, accruals to government were almost $42 million.

"Mr. Speaker, sir, with regards to diamond revenues, I have already alluded to the fact that these will not necessarily be the panacea to all the challenges bedeviling our economy. Indeed, if we do not tread cautiously and transparently, this natural resource endowment might detract us off track the necessary but painful initiatives we need to embrace. We also need to manage expectations with regards to the scope and extent of diamond revenue realizations," Biti stated.

Zimbabwe exported $596.2 million in platinum, $304.8 million in gold, and $126 million in diamonds from January through some point in November. Biti's presentation did not reference a reported sale of rough for $160 million earlier this month.

Biti's presentation accounted for about $122 million of the total diamond exports reported in the presenation. Mbada Diamonds exported a cumulative $65.1 million by mid November 2010 and exports by Canadile Miners amounted to $21.1 million. Rough diamonds exported by Marange Resources totaled $17.4 million while production at Rio Tinto and Zimbabwe's joint venture at Murowa accounted for $17.3 million in diamond exports. Privately held River Ranch exported $1.1 million in rough.

Biti told Parliament that "Zimbabwe’s diamond potential is huge. In the two diamond sales conducted in 2010 under the KPCS, the sum of only $32 million has been transferred to Treasury."

"From these figures it is quite clear that there is still a long way to go before this economy benefits from its diamonds. It is urgent that work on the Diamond Act be concluded," Biti pled.

As proposed, the Zimbabwe Diamond Act would give exclusive state ownership for alluvial diamonds rights; set criteria of selection of mining partners; set the contribution of share by the mining partner; create a Diamond Regulation Framework; and define policing and anti-smuggling standards. The Act would also establish the Treasury's role in collecting and monitoring diamond revenue, provide for environmental and displacement regulations, and create a diamond generation fund.

Biti said, "[D]iamonds can make a decisive difference in this country. It can be a positive one, one in which our GDP increases as a result of greater transparency and accountability of diamonds resources to the state. Or it can be a negative. The history of alluvial diamonds on the continent has been a sad one. We cannot afford to be another Sierra Leone."

By: Jeff Miller of RAPAPORT

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