Round diamonds valued at approximately US$140 million dollars have vanished from the presumably unbreakable Minerals Marketing Corporation of Zimbabwe (MMCZ) and Zimbabwe Consolidated Diamond Company (ZCDC) storage. This is according to Auditor-General Mildred Chiri, in her 2019 report that was recently issued. The report reveals that both the MMCZ and ZMDC are unable to provide a rationale for up to 350 000 carats of diamonds which had been stored in their vaults.
Previous auctions reveal that Zimbabwean diamonds usually bring in close to US$400 per carat, although this figure can increase to nearly US$12 000 per carat.
The issue has since been embarked on by the Parliamentary Portfolio Committee on Mines and Mining Development, which, at a hearing Monday 12th July 2021, solicited valid explanations.
The Parliamentary Portfolio committee is presided over by Shurugwi South legislator (Zanu PF) Edmond Mkaratigwa. In attendance was the Zimbabwe Environmental Law Association (ZELA), which had also been invited to put forward its review of the situation.
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Auditor-General Mildred Chiri’s investigation also brought to light serious stock reconciliation mistakes which according to her could encourage or provide ground for looting. She also said that some diamonds had been sold in the Zimbabwean dollar to local customers, who later brokered the precious mineral, and pocketed foreign currency. Surprisingly, the identities of the customers were kept secret.
“In 2019, 297 660, 41 carats of diamond stock held at MMCZ was not counted at the time of the stock count. These parcels were packed for customers and held at MMCZ. However, at year-end, during the stock count, these stocks were not included in closing inventories,” Chiri said in her report.
“In 2018, 41 699 85 carats of diamond stocks held at MMCZ were excluded from the stock count. It was assumed at the time that these stocks had been sold to customers. An additional 13 222, 85 carats were excluded from the final stock sheet in error,” Chiri’s report reads.
In response to the aforementioned findings, the ZCDC management said that the firm would in future bring in a diamond stock controller to prevent such loopholes. the auditor general however added that such leakages are mostly due to deliberate corrupt actions.
“So the stock reconciliation problem was attributed to systems challenges. However, sometimes, laxity in systems can be created to enable corrupt or fraud behavior to thrive,” Chiri noted.
The need for transparency in this industry obligated the government to fuse diamond ventures in Chiadzwa and Chimanimani in 2016. This resulted to collapsing of all firms which were operating there into one government entity, the ZCDC. This action changed very little as looting of mineral resources and corruption remains rampant.
