Zimbabwe diamond sector only providing 25 percent of forecast income

Zimbabwe's diamond industry is likely to contribute only about 25 percent of the US$600 million that the Treasury forecast would come from the sector this year.

The sharp fall in income from the diamond trade will have serious implications for Finance Minister Tendai Biti's overall budget which had planned on substantial remittances from the diamond sector, according to The Herald newspaper.

Zimbabwe Mining Development Corporation (ZMDC) Chairperson Godwills Masimirembwa said on Tuesday that around US$150 million would be received by the Treasury by the end of this year.

He said the lower revenues were the result of "illegal sanctions" imposed on the country's diamonds by the United States, and an embargo on Zimbabwe by the European Union.

"From January to September this year, we have remitted about US$113 million to Treasury from royalties and dividends, a figure that is way below the projected US$600 million [for the whole year]," he says in comments quoted by The Herald.

"The main reason why the figures are low is because we have a limited customer base due to the illegal sanctions. That limited customer base is under threat of being punished by OFAC (Office of Foreign Assets Control) of America for buying Zimbabwean diamonds," he adds.

Masimirembwa said that by the end of December the diamond sector would have contributed a further US$37 million, bringing the figure for the year to US$150 million.

"The reason is because we are under siege from the U.S. and the E.U. The revenue from diamonds could have been higher, were it not that the ZMDC and the diamond mining companies are under these illegal sanctions.

"At the moment, the U.S. and the E.U. markets are not available to us and those available to us are under threat from the Americans," Masimirembwa adds.