Monday, June 6, 2011
Diamond Proceeds Expected to Repay $98M Chinese Loan to Zimbabwe
In a deal signed in March by Zimbabwean Finance Minister Tendai Biti and President of the Export-Import Bank of China Li Ruogu, China will lend Zimbabwe $98 million to build a military college outside Harare, and Zimbabwe will repay the load using proceeds from its diamonds, Voice of the People reports.
Article 9 of the loan agreement stipulates that Zimbabwe's earnings from Anjin, a Chinese company mining diamonds in the Marange region in a joint venture with the government, will be garnished to offset the loan.
Zimbabwe's Marange diamonds remain under international embargo, with the Kimberley Process at a deadlock. Recently, South Africa's diamond regulator decided to permit imports of rough diamonds from Zimbabwe, and the diamond industry in Surat is urging India's central government to do the same.
The latest deal between Zimbabwe and China also names China as a preferential supplier of all goods, technologies, and services to be used in constructing the college.
While some have criticized the college as an example of what they call the Zimbabwe government's misplaced spending priorities, Defense Minister Emmerson Mnangangwa argued that the institution will create employment and benefit local induhttp://www.blogger.com/img/blank.gifstry.
Although the loan was signed on March 21, President Robert Mugabe recalled parliament only this week to have it ratified – a move that came as a delegation of Chinese military officers were visiting the country. "China is a great friend of us in many ways," Mugabe said.