Communities say diamond mining has failed to bring development benefits, such as improved irrigation

By Andrew Mambondiyani

MUTARE, Zimbabwe, Feb 8 (Thomson Reuters Foundation) - Shylet Mutsago, a 63-year-old who lives near the diamond fields of Marange, cannot hide her anger over how mining in this gem-rich part of eastern Zimbabwe has failed to improve the lives of local people.

From a distance she watches as companies turn the ground over in search of the alluvial diamonds, releasing clouds of red dust into the sky.

"Our hopes of benefiting from the diamonds are gone," she said. "And with this severe drought we are now placing our lives in the hands of God. We are living close to these diamond mines, yet we are starving."

As crops fail due to a lack of rain, some villagers can no longer afford even one proper meal a day, and are surviving on wild fruits like baobab, Mutsago said.

Amid frequent drought, people in Marange had hoped the diamond industry would invest in reviving irrigation schemes. National law requires mining companies to help local communities develop.

Though prone to dry spells, the situation in Marange has been exacerbated by the current El Niño weather phenomenon, which has brought drought to large swathes of Zimbabwe.

The government has declared a state of disaster in most rural parts of the country, saying that 2.44 million people - around a quarter of the population - need food aid.

Irrigation schemes in and around Marange, most constructed decades ago, are no longer operating properly as small-scale farmers cannot pay to maintain or replace aging equipment.

"Just a few diamond stones could have helped change our lives, but no one seems to care," said Mutsago.

Her frustration is shared by many in Marange, an area home to over 80,000 people.

Malvern Mudiwa said the drought was so serious that villagers had no idea how they would survive through the year.

"But imagine - we are surrounded by diamonds!" said Mudiwa, who also heads a local advocacy group, the Marange Development Trust. "The government must order these mining companies to feed the starving people in Marange."

MURKY MANAGEMENT

Marange was regarded as one of the world's richest alluvial diamond deposits, but its resources are depleting, experts say.

It was estimated to have produced around 17 million carats in 2013, 13 percent of the global rough diamond supply, according to the Zimbabwe Mining Development Corporation.

Marange produced 12 million carats in both 2012 and 2014, while production figures for 2015 are not yet available.

When the Zimunya-Marange Community Share Ownership Trust was set up by President Robert Mugabe in 2012, the five diamond companies operating there promised to put in $10 million each to support local villagers over the coming five years.

Four years on, they have deposited only $400,000 in the trust.

The basis for such schemes was established under the economic empowerment regulations of 2010, which say communities whose natural resources are exploited by a business must be guaranteed a share of the profits.

In Marange, diamonds are being extracted by Anjin Investments, Diamond Mining Corporation, Jinan Mining, Marange Resources and Mbada Diamonds.

The ownership of these companies is opaque, according to a 2012 report by investigative campaign group Global Witness.

Several directors of Anjin were drawn from the Zimbabwean military and police, while a stake in Mbada was given to a company linked with a man reported to be Mugabe's former personal pilot, Global Witness said.

Marange grabbed international headlines in 2008 when the government launched police crackdowns on illegal diamond miners and smugglers, resulting in as many as 200 deaths. Even when formal mining began in 2009, reports of abuses against illegal miners caught sneaking into the mining fields continued.

In 2014, the government announced that all diamond companies in Zimbabwe would merge into one entity, the Zimbabwe Consolidated Diamond Company, in an effort to improve transparency and accountability in the sector. The merger is expected to be finalised this year.

The government has a 50 percent shareholding in the new company, while the other half will be split among the private diamond companies.

Anjin director Munyaradzi Machacha told the Thomson Reuters Foundation that issues regarding the Zimunya-Marange trust were being handled by Zimbabwe's mining minister, Walter Chidhakwa.

"We appeared before parliament, and as diamond companies, we clarified the issue," Machacha said.

At a parliamentary committee last year, the companies said they had never made a binding pledge to put $50 million between them into the Zimunya-Marange trust. The agreement was verbal and there was no written contract, they said.

PROMISES TO BE KEPT?

Diamond expert James Mupfumi said the mining companies were taking advantage of a loophole in the Indigenisation and Economic Empowerment Act.

"Companies are not forced to put money into the community share ownership trusts. They may choose not to," said Mupfumi, who heads the independent Mutare-based Centre for Research and Development. The rules are unclear, and it is up to the companies to decide how much to contribute, he added.

However, in parliamentary question and answer sessions, broadcast on state television, Chidhakwa has said the merger of the diamond companies would not impinge on the rights of community trusts.

The new entity must inherit the assets and liabilities of the companies, and honour their promises, he explained.

"I want to assure our communities out there that the process of consolidation itself does not do away with the commitment of community share ownership trusts that are in place," he said.

Mupfumi called for the suspension of mining operations in Marange, to allow for independent auditing of the companies working there, and full disclosure of their ownership.

"No clear polices have been enacted so far in the diamond industry to warrant transparency and accountability practices that will eventually lead to trusts like Zimunya-Marange deriving benefits," he said.

(Reporting by Andrew Mambondiyani; editing by Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit http://news.trust.org)

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