Zimbabwe needs diamond money

Zimbabwe Prime Minister Morgan Tsvangirai said Thursday the government desperately needs revenue from diamond sales, after the lifting of a global ban imposed over military abuses.

"You are aware that the government needs resources, and we regard diamond revenue as a major contributor to the fiscus," Tsvangirai told journalists after a tour of four mines operating in the Marange region, about 200 kilometres (125 miles) east of the capital Harare.

"We hope that as we appreciate the operations, government is able to formulate policies that will contribute largely to the fiscus."

After contracting for years, Zimbabwe's economy has begun growing again since the formation of a power-sharing government in 2009 by Tsvangirai and veteran President Robert Mugabe.

The government is struggling to increase salaries for its workers, who staged stayaway protests last month to push for a doubling of their wages and improved working conditions.

Mines Minister Obert Mpofu, who was accompanying Tsvangirai on the tour, said he was impressed with operations by diamond mining companies in Marange.

"Just yesterday I got a report from DMC (Diamond Mining Company) that they have sold in excess of $30 million since they were approved two weeks ago," he said.

Human Rights Watch alleges that Mugabe's army killed more than 200 people two years after the 2006 discovery of the diamond fields in an operation to clear small-scale miners from the area.

The Kimberley Process, founded to stop the trade in so-called "blood diamonds", confirmed widespread abuses and has come under fire from activists for being soft on Zimbabwe.

The United States in 2008 slapped sanctions on two firms mining in the eastern region, Marange Resources and Mbada, which are mining at the scene of the abuses while powerful US-based diamond trading group Rapaport has boycotted all Marange gems.

All the firms are jointly owned by the Zimbabwean government and foreign investors.

Zimbabwe says it expects to rake in $600 million (466 million euros) from diamond sales this year.

On Friday, Tsvangirai will visit villagers who were relocated to make way for the diamond mines.