Diamonds funding 'parallel government' in Zimbabwe as $2.6 billion goes missing

A presentation made to the Zimbabwean parliament on Thursday details the secrecy, corruption and human rights abuses that accompany mining activities in the Marange alluvial diamond fields.

Hundreds were killed and thousands of local miners were driven off claims when the army seized control of the area in 2008 and most observers believe an international ban on these gems are being widely flouted. The report alleges that in contrast to the official $200 million, as much as $2.8 billion – equal to all other tax revenues – found its way into a parallel government via the army, police, prisons and intelligence agencies which all have 'permits' to mine there.

Read the full presentation to the Zimbabwe parliament by E G Cross, Member for Bulawayo South at the Zimbabwean.

MINING.com reported back in July as Zimbabwe’s shaky unity government inches ahead with extensive electoral reforms ahead of fresh elections now expected next year, the prospect of the country’s army seizing power looms large. The military’s top brass has taken on a visible role in the country’s political affairs and has been brazenly opposed to security sector reforms.

Zimbabwe's finance minister Tendai Biti in July said the reality of Zimbabwe's situation is that there is no connection between Zimbabwe’s income from diamonds, its output and international prices adding the country's resources are in danger of turning into curse rather than a blessing. Zimbabwe exported 716 958,50 carats from its alluvial diamond mines but only $103,9 million of diamond export shipments was accounted for in the first half of the year

MINING.com reported earlier this month on a Pyrrhic victory for Robert Mugabe when Rio Tinto's Zimbabwe subsidiary Murowa Diamonds ceded 51% of its equity to comply with a new law that requires Zimbabweans to own the majority of foreign companies. Rio Tinto says on its website it has completed a feasibility study and received environmental go-ahead to expand Murowa production 8-fold at a cost of $200 million, but it is doubtful on whether the investment, which requires foreign capital, would now be made.