Zimbabwean President Robert Mugabe has announced that the government will take over all the country’s diamond mines to stop foreign firms syphoning off gems without declaring them.
“We have not received much (money) from the diamond industry at all,” Mugabe said in a two-hour interview screened late on Thursday by state broadcaster Zimbabwe Broadcasting Corporation.
“Our people ... have not been able to see or hear what was going on and lots of swindling, smuggling have taken place and the companies that have been mining virtually robbed us of our wealth.
“We have decided that this area should be a monopoly area and only the state should be able to do mining.”
Mines Minister Walter Chidhakwa last month announced that the government had seized diamond mines in the eastern Chiadzwa fields, near the border with Mozambique, after their operating licences expired.
Mugabe said that only $2bn had trickled into government coffers out of $15bn generated by the industry, though he gave no timeframe for the figures.
Analysts predicted that nationalisation would decrease investment and may fail to boost government revenue.
“The move is bringing uncertainty to investors. They are unnerved,” Prosper Chitambara, an economist at the Labour and Economic Development Research Institute of Zimbabwe, told AFP. “You can’t just decide ‘We are taking over’. It makes Zimbabwe less attractive as an investment destination.”
Zimbabwe’s economy has recently been badly hurt by its indigenisation scheme adopted in 2008 under which foreign companies must transfer 51% of their shares to local entities or individuals.
The government last year ordered diamond mines, including joint ventures with Chinese operators in the Marange district, to join a state-owned conglomerate.
Out of the six diamond companies in Zimbabwe, four are government joint ventures – two with China, one with Dubai and one with Ghana.
Another is wholly owned by the government, and one is owned by black Zimbabwean businessmen.
In recent years, the industry has been tainted by allegations of rights abuses including the killing and torture of workers.
Reports of abuse led to an international ban of gem exports from Marange between 2009 and 2011.
Diamonds were discovered in Marange in 2006, drawing thousands of small-time miners hoping to make a quick fortune.
The army cleared the area in late 2008, when rights groups said more than 200 people were killed.
The government in Harare pinned its hopes on the diamond industry to shore up the moribund economy, but with little success.
The country is among the world’s 10 largest producers of diamonds by volume.
Prices are at a six-year low after falling 18% last year.
Zimbabwe, which earns most of its foreign exchange through mining, saw production fall to 420,000 carats in the first five months of 2015 from 660,000 carats a year earlier, according to Bloomberg News.