Zim4Minerals - Page Motivation

The primary motivation for this blog is for the purpose of increasing mineral knowledge awareness to the general public in Zimbabwe. It also serves as a social commentary on minerals related news. Ideally, the site will be the 'go-to-place' for information, opinion and news on natural resources, minerals sector governance and mining issues. Any contributions, comments, critiques, additions and revisions (academic or otherwise) to this end are most welcome .

Demystifying Zimbabwe's Mining Sector Indigenisation Legislation: A focus on the 51/49 principle (part 1)

The Zimbabwean mining sector has much potential for transforming its economy and livelihoods of its citizens. However, those with vested interests have always found a way to demonise any and everything coming out of the country to further their own selfish interests. This piece seeks to present an alternative view on the extant mining sector policy domain.

The concept of indigenisation has been a topical one, more so in the case of Zimbabwe where a law now provides for  limitations of foreign ownership across the various sectors of the economy. While many people choose to argue that indigenisation is not a feasible economic policy for Zimbabwe, others are simply "biting the bullet" and diving in head long and investing large sums of money into the Zimbabwean mining sector with huge attendant benefits.

The unique case of Chinese companies is a case in point here. Several Chinese companies have invested varying sums of money in both the agricultural and mining industry in Zimbabwe. Some have also invested heavily in the energy sector, the case of the multi-million  Kariba South Hydro-Electric Power Station expansion quickly comes to mind here. However, the most interesting investment have been in the mining sector where large returns can be made within a period varying between 2-5 years.

Diamond mining in the Marange (Chiyadzwa) Area has brought so many benefits, so that even various institutional investors from China and the government have sought to invest profitably.  

These investments have not only been in the precious minerals sector alone, as other companies are also now making inroads into the metallurgical sector with numerous prospectors eyeing the lucrative precious metals industry. Zimbabwe is gold and platinum mining country with the country having the worlds second largest reserves of platinum, after South Africa. Gold on the other hand has been mined from Zimbabwe since time immemorial, even before European colonialists arrived. In fact, gold was among the largest export and trade minerals of choice during the times of the Munhumutapa Empire, responsible for trade with merchants from far off continents and countries in Asia, Europe and the Middle East.

The Chinese investors also have invested in the chrome mining sector. Zimbabwe is a country of many greats as it has the worlds largest reserves of prime quality steel making chrome, potentially over 80%.

On the other hand, Russian investors have also begun making inroads with the only barrier being language as a gap still exists. With China, a Confucius has been setup at the country's largest institution of higher learning University of Zimbabwe. However, be that as it may, an initial US$3 billion injection into a new mine is testament to the confidence the Russians have in the potential of the Zimbabwean platinum mining industry.

An investigation into the efficacy of diamond beneficiation as a fiscal resource mobilisation strategy: the case of Zimbabwe

Introduction

It is estimated that while Zimbabwe can produce up to twenty-five per cent of the world’s supply in diamonds (Chininga Report 2013) it has not made much by way of foreign currency earnings. According to Mark von Boschel (2010) , a Belgian diamond industry expert of the Antwerp World Diamond Trade Centre, Zimbabwe has the largest known diamond reserves in the world at present, estimated at US$800billion judging from the current diamond foot-print (von Bonschel , Sunday Times,  08/08/2010). A diamond footprint is a pattern deduced from the quality and quantity of diamond production allowing estimations of future production to be made. If Zimbabwe adopts diamond beneficiation, the country stands to earn over US$8 billion annually and create 200,000 jobs (CNRG 2013; Mbanje 2013). The statistics point to a 20% potential contribution to nominal GDP as of 2010, which is significant for one mineral alone. (http://www.chamberofmineszimbabwe.com).

Although there are currently numerous revenue streams from the Zimbabwean diamond mining sector, not much value has been derived to the benefit of government and the local economy. This is principally because the sector’s taxation system is inadequate leading to discrepancies in the value of reported remittances to Treasury (Chininga Report 2013: 10). These revenue streams include royalties, resource depletion fees, levies, licencing fees, pay-as-you-earn, corporate taxes, income taxes, and profit taxes, diamond export tariffs, Value Added Tax (VAT), profits and dividends.

Furthermore, despite the boom in mineral prices and corporate profits from 2002-2007, very little has been earned by countries with minerals (ECA 2011: 92).  Diamonds are exported in their cheap raw form and in some instances re-imported as expensive finished products (Grynberg, 2013). This has contributed significantly to the Zimbabwe’s own trade deficit growing from US$2.5 billion in 2012, to US$4.2 billion in November 2013 and to the current projections of US$3.5 billion for 2014 (2013 National Budget Statement, 2012: 241, The Herald , 10 January 2014). This is an untenable situation given that the Zimbabwean Government currently faces an intense liquidity crisis compounded by a big public debt overhang and a poor social services rollout. Further, manufacturing has also continued lagging behind at 13% of exports in 2014 (Zimbabwe National Budget 2014). The IMF in its Natural Resources Per Capita Index, concedes that Zimbabwe has the world’s best minerals per capita indices. Going forward, Zimbabwe is projected to produce an estimated stable supply in excess of a firm assured 12 million carats of rough diamonds per year until 2023 (Bain and Company 2013: 57). Conservatively this was 8 per cent of total global rough volumes and just 4 per cent of value in 2013 this being production from the Chiadzwa area alone (DeBeers 2014: 42). However, very little direct fiscal flows to government coffers have been realized thus far (KPCS 2012, Chininga Report 2013).

Statement of the problem

Despite minerals contributing 16% of Zimbabwe’s +/- US$10 billion Gross Domestic Product and 52% of the country’s US$2,4 billion export earnings, the minerals sector has continued to perform dismally in its contribution to the fiscus. Whereas Zimbabwe is estimated to produce about 25% of the global supply of rough diamonds by volume, diamonds alone contribute just about 1% to the GDP and between 20 - 30% of the total export earnings. Therefore, the country has not managed to derive much benefit from this resource endowment. Meanwhile, the government continues to face apparently insurmountable liquidity challenges and is struggling to meet most of its obligations. Zimbabwe has been exporting its diamond in the rough form. This has meant government has not realized the full value from the export of its diamond production.

However, no comprehensive study has yet been done to assess the potential contribution that the diamond beneficiation process can deliver to governmental fiscal revenues. Unless more studies of this nature are done, the country may continue to lose out on the full value of its minerals until they are depleted. This study presents an attempt to bridge this gap by analyzing the potential of local diamond beneficiation to Zimbabwe’s revenue contributions. It draws lessons from countries that have similar resources and have experienced similar beneficiation challenges. All in all, the study seeks to examine the legal and institutional frameworks for diamond beneficiation in Zimbabwe; explore beneficiation practice in other countries; demonstrate the effects of diamond beneficiation to the mining fiscal regime; and recommend an appropriate diamond beneficiation model to enhance the performance of the mining fiscal regime.

Conceptual, Theoretical and Analytical Frameworks

Diamond Beneficiation/Value Addition (BVA)

The South African Department of Mineral Resources (DMR) (http://www.dmr.gov.za/beneficiation-ecnomics.html), considers the term beneficiation to be interchangeable with value added processing. The DMR (ibid) defines beneficiation as entailing “the transformation of a mineral or a combination of minerals (produced by mining and extraction processes) to a higher value product, which can either be consumed locally or exported.” For DeBeers (2014: 81) beneficiation is the “creation of activities beyond mining the natural resources in producing countries.” This means diamond sorting, valuing, selling and manufacturing. For the Zimbabwe Congress of Trade Unions (ZCTU 2011: 84) beneficiation refers to the process of adding value so as to increase the quality and value of a saleable product. According to Bwititi (The Sunday Mail,  Extra Analysis, 8 June 2014) “beneficiation entails the value addition of minerals by processing them to attain higher returns.”

Therefore beneficiation refers to any subsequent processing undertaken on a mineral or primary product post extraction. It is the process of further manipulating the minerals innate properties in new innovative ways into useful finished products that can be commercially sold for a pecuniary consideration. Diamond beneficiation thus refers to the successive cleaning, polishing and cutting of the mineral until it is valuably fashioned in various ways including the manufacture of diamond industrial tools, diamond ornaments and diamond jewellery.

History/Origins of Beneficiation

Early records indicate that mining began in Africa about 20,000 to 40,000 years ago (Kuhn 1987, Jourdan 1995, AMV/ECA 2009). As early as the 6^th Century, the indigenous Bantu speaking people occupying the Southern African region, (present day Southern African Development Community, SADC), worked iron ore, gold and copper through smelting (Kuhn 1987, Jourdan 1995, ibid). In the central parts of Africa, it is evident from archeological data that mining and beneficiation of iron and gold ores was already taking place even before the arrival of Arab and Indian merchants (Kuhn 1987). Hence the notion of minerals beneficiation is as old as the earliest human civilizations in Africa. The figure below depicts the stages of diamond beneficiation from mine extraction all the way to retail, and the value transformations at each stage:

Problems with over regulation

It is generally assumed that a few publicly owned companies have consistently failed to declare either profit or dividend. However, the reasons for this failure to declare dividend are complex, many and varied.  It has also been noted that the multiplicity of compulsory statutory payments, charges and levies on operators by the regulatory institutions depletes their finances and are viewed as hindrance to profit maximization. (ZMDC Annual Reports for 2011, 2012).

The Problem of Diamond Revenue Leakages

It is common knowledge that that most large diamond mining companies in Zimbabwe are managed by expatriates earning fairly good expatriate salaries and managements fees. DeBeers (2014) assert that the greatest threat to government revenue generation is in exorbitant management fees charged by some of these expatriates. This leaves the government sharing with the joint venture (JV) partner company a highly depleted profit pool (ibid). Further, overpricing imports, equipment and services may eat away at revenues effectively externalizing profits. Organized international syndicates specializing in tax evasion/avoidance, under invoicing, transfer pricing or blatant smuggling prejudice the State of significant revenues. Concerted attention to the mining fiscal regime will help to alleviate these challenges and minimize losses in the process. These Illicit Financial Flows pose a very serious threat to government revenue. However, while these present significant hurdles, the greatest threat lies in the export of un-beneficiated minerals to foreign countries which in turn get the full benefit from the mineral by simply conducting beneficiation and value addition.

Challenges to be expected when introducing Beneficiation in Zimbabwe

Survey respondents, although cautious, anticipated challenges in beneficiation to include: skills shortages (62.5%), corruption (48%), technology (45.8%), multi-national company (MNC) domination (40%), poor management of revenues (37.5%), poor workmanship (31.8%) and anti-competitive behaviour (30.4%). These low indices for challenges indicate that respondents were optimistic that beneficiation will lead to more benefits than costs accruing to the country. Consistent with the above,  experience from personal encounters indicates that the big challenges faced by the diamond sector in Zimbabwe are: lack of appropriate technology, poor investment levels, uncertainty in policy on indigenization, low Foreign Direct Inflows (FDI), lack of skills for diamond cutting, polishing, marketing and jewellery and poor accountability and transparency indicators. The negative effect of the restrictions facing certain State owned companies like ZMDC and specification of certain key individuals were a significant hindrance to the sale of Zimbabwean diamonds before the country acquired Kimberley Process Certification (KPC) in late 2009.

Other challenges faced by the industry include the punitive and high cost of diamond cutting & polishing licenses (US$100,000.00 per year as set by Statutory Instrument 157 of 2014, US$500.00 export fee regardless of quantity exported), lack of proper skills and knowledge about the true value of the diamond, its processing and subsequent marketing, and the unjustifiable favouritism of foreigners who may not be subjected to the same requirements as locals. Although the US$100,000.00 permit for diamond cutting and polishing has since been replaced with a US$20,000/10 year permit (Source) it still quite high for local processors.

Creating Fiscal Space for the Zimbabwean Government

It is now generally accepted that the huge public sector salary bill poses a huge drain on the fiscus. This obesity extends to the civil service which is currently estimated to constitute a complement of just above half a million members. There is a need to urgently rationalize the civil service so as to create fiscal space for government. This rationalization exercise should also extend to inefficient or non-performing State enterprises. This is consistent with Heller’s fiscal space diamond conception where reprioritization of expenditures should be married with increased mobilization of domestic resources, minimizing consumptive borrowing and reduction in the over reliance on development assistance to fund government programmes.

Global Diamond Industry Value Sharing Ratios

Documentary evidence shows that while diamond producing companies globally shared only US$18 billion from the sale of rough diamonds in 2013, those countries which engaged in both diamond jewellery manufacturing and retail sales shared a windfall of over US$50 billion.

This same trend was observed for 2014 and is expected to persist in the industry. While possession of the diamond mineral and producing the actual rough diamonds counts for a lot, it does not come close in terms of earnings potential compared to manufacturing value added jewellery. According to the Baines and Company Reports (2011 & 2013), DeBeers (2014) and McKinsey & Company (2014) the two most valuable stages which produce the greatest value along the diamond value chain are the jewellery manufacturing and retail sales segments. However, they are also very capital intensive (Bain & Company 2013: 6; DeBeers 2014). The challenge for Zimbabwe is that the value of its jewellery industry is currently unknown, leaving room for under declaration of production, worsening uncertainty for policy level planning.

Diamond classification

There are many factors to consider when evaluating the value of a diamond. While some diamonds are extracted from the mine are clearly gem quality, others require basic cleaning (by boiling in acid under pressure) to remove the tough outer coating of brown dirt. Most of Zimbabwe’s Diamonds are considered industrial and thus sold at very low prices. The Country may have been prejudiced greatly in the past by selling its diamonds without cleaning and polishing and this can be done cheaply by local middle men. That way, the country can get most of the true value of its diamonds.

Anticipated benefits from beneficiation in Zimbabwe

Respondents reported anticipated benefits from diamond beneficiation that include: employment creation (88%); higher retained local value (84%); improved livelihoods (84%); infrastructural development (82.6%); increased government revenue (78.5%); and industrialization (72%). Respondents were not very optimistic about improvements in transparency (65.2%), accountability (52.1%) or economic diversification (66.7%).

Proposed ways of Increasing the Contribution of Diamonds to the Fiscus through Beneficiation

This section seeks to recommend an appropriate model for Zimbabwe to obtain optimal revenues from its diamonds. It highlights the challenges anticipated and the opportunities available for exploitation to improve diamond mining fiscal regime. The recommended model is a modification of the Belgian, Botswana and South African experiences. The majority of respondents indicated that government must neither reduce nor remove the current tax levels (64% and 62% respectively), and 52% actually advocated for an increase in taxes. Alternatively, the government can introduce new tax measures (60%). However, almost half believe the country should ban export of rough diamonds (48%). Interviews and documentary search however indicate this might be counterintuitive. To achieve the objective of recommendations to enhance the fiscal contributions of diamond, the SPSS Factor Analysis was used and it extracted the most important variables and issues to focus on in the beneficiation discourse. To recommend appropriate strategies for beneficiation, factor analysis determined that the principal determinants for beneficiation include only four components out of the total 16 accounting for a total variance of 84%. Only components with an Eigen Value of one (1) or greater were extracted. The Scree Plot below illustrates these results, showing the distribution of the extracted components indicating the cut-off level for all components with an Eigen Value of greater than one (1).

Figure 10: Five components had an Eigen Value of more than 1 and were thus extracted 

Source: Principal Component Factor Analysis of Field data with IBM-SPSS 20.0

The key is such that component one is the most important, while component four is the least important.

Explaining the Principal Factors for Beneficiation

The Extracted Principal Component Matrix illustrates the variables which constitute each component basing on a loading factor of 0.80. The matrix indicates the composition of each component extracted based on how each variable is correlated with other variables. Basing on a Loading Factor (cut-off point) of 0.80, the principal factors extracted in component one (1) were Technology (0.959), impact on livelihoods (0.908), skills (0.956), workmanship (0.925), anti-competitive behaviour of companies (0.895) and improved transparency (0.824). Component two (2) was composed of only two variables: government revenue (0.924) and industrialization (0.945). The greater the loading factor, the greater the impact of the variable in terms of the impact on value addition and beneficiation. Those variables in component one (1) are considered to have the greatest impact. Elements in component two (2) are of lesser impact than those in one (1), while subsequent components (3, 4 & 5) are of even lesser importance and were ignored. Technology was found to have the greatest impact followed by skills. These findings were consistent with evidence emerging from interviews carried out in the study.

Conclusions

Realities of the Zimbabwean diamond/mining industry

The Zimbabwean minerals management sector is excessively fragmented with numerous institutions and pieces of legislation all having an effect/impact on the diamond mining sector. There is a need to enact a comprehensive Diamond Act which combines all relevant legislation to do with the diamond mineral in one piece of legislation. This creates certainty for policy level planning and implementation. At the same time, government must also finalize the Minerals Development Policy and the Mines and Minerals Act.

Mining Sector Policy Communities and Paradigms

For Zimbabwe, mining is still an enclave industry that is largely capital intensive, foreign owned, and mostly extractive and dependent on trading in raw mineral resources. This is notwithstanding that Zimbabwe has made concerted efforts to rectify this anomaly through various pieces of legislation, imposing tariffs and adopting Joint Venture models through the concept of Public-Private-Partnership (PPPs). It is important to note  that all governments seek to maximize fiscal revenue hence they impose resource rents on minerals exploitation. They are usually less concerned about when this revenue is earned. Conversely, political pressures compel governments to collect this revenue sooner rather than later (ICMM and the Commonwealth Secretariat 2009: 8). This has been observed in Zimbabwe where the government is financially hamstrung and is always eagerly awaiting for revenue that comes from diamond sales. All this revenue is immediately may be used to finance recurrent expenditures at the expense of reinvesting it into beneficiation processes. The key observation here is that for developing countries that are overly reliant on mineral revenues, the objective of maximizing revenue over the long run is not practical due to the need to meet immediate expenditure demands and this then  denies  the government opportunity to have accrual of benefits from minerals.

Beneficiation as Industrialization

For Zimbabwe, minerals beneficiation and value addition is of paramount importance as it resonates directly with the re-industrialization discourse. To the extent that beneficiation is defined as the setting up of new factories, side stream and downstream activities it is well in line with the Zimbabwe’s strategy of re-industrialization in ZIMASSET. In this light,  it can thus be seen that the beneficiation discourse is not exclusive to the mining and extractive industries sector alone but extends to other sectors where commodities need further processing beyond the raw state.

Recommendations

The following specific recommendations are made for diamond beneficiation to succeed in Zimbabwe: government must develop incentives for FDI which assure win-win investments; invest in infrastructure that can then act as an enabler for industrialization; conduct skills development programmes; adopt and adapt appropriate technologies; strengthen indigenization and empowerment frameworks to provide real tangible deliverables for the common man on the street; and the need to embark on more research into minerals beneficiation that can be done locally to both explore its feasibility and build a credible knowledge base.

Private Sector Initiatives

The private sector cannot simply wait for the government to do everything; there must be initiative from entrepreneurs forging partnerships with both local and foreign financiers and investing time and money to make diamond beneficiation a success. Government is recognized as an enabler, creating the conditions necessary for proper functioning of economic activity. Government cannot and indeed must not be seen as the only aggressive player in the minerals beneficiation discourse, private sector organisations (banks, companies, academia, civil society organisations, schools, researchers, politicians and individuals) must all take their place.

Legislative Improvements

To resolve the problem of multiplicity of legislation and institutions involved in managing diamond revenues, government must formulate an integrated legislative framework by finalizing the Minerals Development Policy; enacting a new Mines and Minerals Act; revamping indigenization and economic empowerment legislation so as to create certainty in the policy and simplify and unify all the legal frameworks for diamond management under a single Diamond Act responsible for all diamond issues.

Institutional Improvements

Institutional interventions must include the setting up the Minerals Prospecting Company to conduct minerals surveying and mapping; set up model beneficiation centers countrywide to bring minerals beneficiation to the local communities across the country. For intergenerational equity the Sovereign Wealth Fund must also be made operational, to promptly build savings. The Special Economic Zones/Export Processing Zones (SEZ/EPZ) must include special factories for diamond processing.

Sector Specific Interventions

The Government of Zimbabwe also needs to strengthen tax frameworks in Zimbabwe’s diamond sector. This can be done by compelling companies to use local facilities in their mining and processing activities. This includes doing diamond cleaning, cutting, polishing and jewellery manufacturing locally, use of local auction floors to sell diamonds, open more diamond processing centers locally, train more local people in diamond processing, open banks specifically designated to do banking for the diamond trade between Zimbabwe and other foreign countries, increase the number of diamond beneficiation training schools, set up a diamond beneficiation/minerals beneficiation centre after the Non-Aligned Movement (NAM) model. The ZDC already has the status as a designated NAM Centre for Beneficiation in Zimbabwe.

Mainstreaming Gender Issues, Indigenization and Economic Empowerment

Economic empowerment is not complete until there is a mainstreaming component. Government must ensure consistency and certainty in policy pronouncements. To ensure that there are lasting benefits from engaging in diamond beneficiation there is need to provide incentives for local beneficiation and value addition. This can be done by issuing concessions to and encouraging partnerships between locals and foreign funders in the set up of diamond processing facilities within Zimbabwe. This will increase the number of locals involved and helps retain more of the diamond revenues in the local economy.  It is also an imperative for the government of Zimbabwe to also structure arrangements for the inclusion of not only a gender component (by sector specific empowerment initiatives) but by also encouraging and allowing inclusion and transition of the informal sector into the formal economy. This must be incorporated into the diamond mining and beneficiation sector as part of the empowerment module. The purpose of gender mainstreaming is not only to achieve equality between the sexes but also to get their full contributions.

Incidental Interventions: Oversight 

There is a need to improve and strengthen supervisory and oversight functions of the various bodies, for example, by capacitating Parliamentary Committees. Government must also curb corruption by prosecuting perpetrators of fraudulent practices. Public officials must be forthcoming with information or data, especially by making it accessible to researchers and engender trust between government and business; this is the bedrock for successful nations.

Governance, Transparency and Accountability in Extractive Industries

Zimbabwe is a signatory and fully fledged member of the Kimberley Process (KP) a United Nations (UN) mandated multilateral organization.

The Kimberley Process Certification Scheme (KPCS) under Section V of its Core Document, titled “Cooperation and Transparency” and in Annex III titled “Statistics” sets out prerequisites for cooperation among KP member organisations and for managing statistics relating to diamond production figures and revenues and availing it to “interested parties for analysis.” The Government of Zimbabwe needs to do more to ensure diamond revenue statistics are readily available to the general public, in the interest of transparency and for purposes of accountability. The World Bank sets out responsiveness of governmental authorities as part of the good governance frameworks; this must be adopted in Zimbabwe.

There is a strong need to eliminate corrupt practices, by fully investigating and resolving criminal cases. Initiatives that may be adopted by the diamond sector industry players to increase transparency in diamond revenue management include the Zimbabwe Environment Lawyers Association’s (ZELA) Publish-What-You-Pay campaign a part of a bigger Extractive Industries Transparency Initiative (EITI). This campaign encourages diamond producers to publicly disclose its production figures, earnings and related statistics; thereby enhancing transparency and accountability in natural resources management.

Plugging Diamond Leakages

There is a need to plug leakages of minerals from smuggling and illicit financial outflows.  This can be done by increasing the physical surveillance of mines, mining areas and international borders using advanced technological tools like X-Ray scanners, Closed Circuit Television (CCTV) systems and Geographic Positioning Satellites (GPS). This would enhance revenue tracking by curbing leakages. The digital CADASTRE System recently adopted by the Ministry of Mines for registration of mining claims is thus very valuable.  Revenue management means little if there is no control of ownership structures. Technology can also be used to reduce inefficiencies i.e. set mineral size capture thresholds for mine extraction of diamonds and full exploitation of mine dumps. Regularizing the mining operations of artisanal miners will minimize leakages in diamond mining. This removes the incentive to externalize their produce through informal channels.

  

Bibliography

NB: This article was co-authored with Dr. Tawanda Zinyama (Senior Lecturer at the University of Zimbabwe) and Dr. Alfred G. Nhema (Senior Lecturer at the University of Zimbabwe) and is available in full from: http://www.aijcrnet.com/journals/Vol_5_No_5_October_2015/27.pdf 

The efficacy of diamond beneficiation as a fiscal resource mobilisation strategy: the case of Zimbabwe

Abstract
The diamond beneficiation process is a highly contested area in the world. While some developed countries have managed to convert their natural resource riches into profitable financial gains, African countries including Zimbabwe have continued to face numerous challenges in attaining the same benefits. In Zimbabwe, these challenges are especially evident as the country lacks the appropriate skills, technology and infrastructure to embark on the diamond beneficiation process. This is despite the country being richly endowed with all manner of valuable mineral resources. The very high value and worth of diamonds makes them a suitable candidate for enhancing fiscal resource mobilization in Zimbabwe. This study examines the efficacy of diamond beneficiation on resource mobilization for Zimbabwe. The study explores the concept of beneficiation and analyzes how the beneficiation process can be utilized to help expand the country’s fiscal space. 

NB: This article was co-authored with Tawanda Zinyama (PhD Candidate and Lecturer at the University of Zimbabwe) and Dr Alfred G. Nhema (Senior Lecturer at the University of Zimbabwe) and is available in full from: http://www.aijcrnet.com/journals/Vol_5_No_5_October_2015/27.pdf 

Cecil John Rhodes, Rhodesia and the Great Zimbabwe: privatising a country's mineral wealth

The history of mining in Zimbabwe goes back hundreds of years before the advent of inter-continental trade that became more dominant in the recent years. In the central parts of Africa, it is evident from archeological data that mining and beneficiation of iron and gold ores was taking place even before the arrival of Arab and Indian merchants (Kuhn 1987). Trade during this era was characterized by barter exchange between these merchants who wove rich fabric and exchanged it for the minerals of the State of Munhumutapa/Monomotapa/Mwenemutapa. On arrival in Africa in the early parts of the 1700s, the voyaging Portuguese noted the relative sophistication of the economic system of the Mutapa State and the way it conducted its social affairs and commerce, this was largely on equal terms with their partners who were Middle Eastern and or Oriental merchants (Kuhn 1987).

However, the arrival of Europeans coincided with the decline of the extant legislative and administrative authority which had began an gradual outward migration from the hinterland further North in search of the elusive and prized salt fields. Taking advantage of this apparent retreat, the recent arrivals asserted their own nationalistic intentions and subsequently either fully drove out or subjugated the remaining inhabitants of the land. Albeit initially on the back of negotiated and uneasy peace/truce/détente, and consequently more aggressively through the use of organized military firepower. Their relatively advanced weaponry took the battles and they began setting up local administrative systems modeled along the lines of their home countries. These nascent investments in political infrastructure did not escape the notice of marauding colonists in the mould of Cecil John Rhodes. With a Royal Charter in hand he earnestly set out on his Cape to Cairo mission where he intended to extend British influence across the length and breadth of Africa.

It is abundantly evident that on arrival Rhodes was preoccupied and obsessed with the mineral wealth and riches of the newly found colony state. From the first instance he began and executed a conceited plan to conceal the true mineral wealth of the new colony. As the accomplished politician that he was, he used the propaganda skills he acquired as Prime Minister of the Cape Colony to hoodwink not only the locals but the issuer of his Mining Charter, the British Monarch, into believing that the new colony was a barren wasteland not worth the ink on which the Charter was written. However, Rhodes on the other hand was privately enchanted by the extensive riches in this part of the world and he set in motion to christen the colony into his name. By secretly investing in the colony and at the same time discounting and underreporting its true value and wealth to the monarch, Rhodes went about setting up the country that what was to be later called by his own name, Rhodesia. So enchanted was Rhodes he also chose the country as his final resting place of choice, where he lies to date.

…………….to be continued

ZIMASSET – Prospects for Mineral Value Addition and Beneficiation in Zimbabwe: Benefiting from our minerals

06 May 2015

ZIMASSET – Prospects for Mineral Value Addition and Beneficiation in Zimbabwe: Benefiting from our minerals

The resources of African countries have attracted the attention of Multinational Corporations (MNCs) from across the worlds, who have continued to rip huge benefits and make rich pickings from the same. However, there is very little to show for these resource riches in the host countries, to the extent that some have begun alluding to a “resource curse’’ of sorts that has been cast upon them. In the recent past most of these developing countries have awoken to the reality that these resources must bring benefits and economic development to the inhabitants of the host countries as a result of civil protest and lobbies that have emerged from the population. Minerals as valuable as diamond, platinum, gold, topaz, nickel, coal, gas, oil, chrome, iron, zinc are in abundance in poorer countries but foreign companies continue to get benefits unduly at the expense of locals.

Resource dependency has been the downfall of most developing economies as they are heavily reliant on the one major mineral that earns foreign currency and export receipts for the country. This concentration is evident in the economies of Botswana reliant on diamond, Zambia dependent on copper, Namibia on zinc exports, Nigeria and Angola reliant on crude oil exports. The same story is replicated across the whole of Sub Saharan Africa from Ghana, Tanzania, and Equatorial Guinea, where these economies are heavily reliant on one product, crop or mineral.

The dominant paradigm in minerals exploitation is that only foreign companies have the financial wherewithal to invest in huge capital intensive resources exploration and exploitation to the detriment of local investors. The government also on the other hand is more willing to support MNCs by giving them huge tax incentives and other exemptions without due regard to the fact that the same support granted to local indigenous companies holds for better sustainable developmental prospects in the long run. Stories abound of MNCs who after enjoying long tax holidays chose to dump their local operations citing viability problems without giving credence or adequate evidence to that effect. 

However, on close analysis it is clear that the relevant policy communities’ in the specific policy sector would not have been consulted on their inputs. This usually leads to accusations being traded of public officials and local civil/traditional leaderships being bought off in the signing of these lucrative mining contracts. Cases abound of these instances. Other cases also are evident of executives of State Organisations who are entrusted with the responsibility to represent the interest of the State losing relevance as they would have been co-opted into the operations of the MNCs and they end up serving their own interests instead of behaving according to their mandate. A paradigmatic shift is therefore required in the way mineral resources and mining claims are managed. The principal objective being to put in place safe guards to ensure that local communities and the national economy benefit more, ahead of the MNCs.

The Community Share Ownership Scheme model of the Zimbabwean indigenisation policy needs refashioning in order for it to be more robust in the way it ensures the resources are harnessed for the benefit of the host country, which has these minerals. The example of more developed economies like China, Japan, India, Russia, Venezuela, Norway, and the Oil and Petroleum Exporting Countries (OPEC) of the Middle East should be learnt from. These countries have harnessed their natural resource endowments to bring about socio-economic development and rapid advancements to the wellbeing of their citizens. The cases in point here are of the Emirates which have transformed the hitherto desert City-States areas into metropolitan trade centres with thriving local economies. Another case in point for example, is that of the Norwegian Sovereign Wealth Fund which has accumulated US$1 trillion, (a mean sum) from prudent management of non-renewable resources, principally oil and fisheries.

These enviable success stories can and must be translated to the African continent. Some African countries have come on board and crafted similar programmes. Zimbabwe holds great potential of growing such a fund through mining in and on the Great Dyke and other resource rich areas around the country, chiefly Marange, Chimanimani amongst others. More still needs to be done for this to be a reality.

However, without the adept political maneuvering that is characteristic of the negotiations in the huge mining contracts, developing countries still stand to lose out on getting the full benefits from the exploitation of their mineral resources. What is needed are knowledgeable experts with the requisite skill, tact and passion to negotiate (in good faith) for the nation at large. The selfish ways of the past must be discarded and a more pragmatic approach adopted. This writer envisages not individuals taking upon themselves this task, but a group of experts called upon occasionally to thoroughly interrogate all new mining deals with the aim of getting the best from our resource riches.

The need for local minerals beneficiation and value addition is now more imperative than ever before. There is absolutely no reason why Zimbabwe should not shine among the best nations in this world, and in our lifetime. It has all the necessary prerequisites to achieve success; all that’s left is for the country to connect the dots.

The significance of diamond beneficiation to Zimbabwe, Part 1: Definitions and Statistics

The significance of diamond beneficiation to Zimbabwe

By Ngonidzashe Nzenzema

Part 1: Definitions and Statistics

Introduction

Beneficiation and value addition have become topics of increasing importance for mineral producing countries, especially in Africa. There are growing calls not only for increased revenue generation through sustainable natural resource exploitation, but also for more local benefits to accrue before export. The anticipated benefits include employment creation, skills transfer and technology development among others. This has meant setting up export barriers and tariffs to compel adoption of local processing by mining companies. Precious minerals among them gold, platinum, chrome, silver and the famed diamond lead the pack as the prime candidates for local beneficiation, largely because of their unique qualities and peculiar characteristics.

Analyzing the diamond and its beneficiation

The term diamond conjures up, evokes and elicits various images. These images range from the positively envisioned opulent displays of magnificent wealth and luxurious indulgence; to the detestable devastating images of war, hunger, disease and death. All these word associations hold true for various situations. Meanwhile, the diamond’s inherent value lies largely in perceptions. Apart from its industrial applications, a diamond has come to symbolize various other things like love, wealth, luxury, strength, purity and at one time diamonds were used for religious, spiritual and even medicinal purposes. However, for the avoidance of doubt the diamonds which we are interested in are the “conflict-free” variety found in locations such as Zimbabwe amongst the major sources, which can be used for industrial applications and jewellery manufacturing.

In expert parlance or techno-speak a diamond is a hard collection of pure carbon atoms bound together by the strongest connections known on earth.  Traditionally, the greatest economic attribute of the diamond has been its ability to quickly and easily move large sums of monetary value concealed in so inconspicuous a stone. This attribute has led to eminent diamond industry players to refer to it as a “refugee’s best friend.” However, on its own the rough diamond only consists of part of the full story. Subsequent value addition through beneficiation of the mineral transforms it into more valuable configurations.

In Zimbabwe, both the terms diamond and beneficiation have taken cultic status. Minerals have taken centre stage as a potential driver of economic development. Despite this, a search for the meaning of the phrase “Diamond Beneficiation” on the other hand still draws blank faces amongst most citizens, ordinary folk and the sophisticates alike. Regardless, both words used together are now venerated as potential saviors for the local economy; an improbable task for such an unassuming mineral.  The Central Government authorities in Zimbabwe see an opportunity even though there is still no agreed definition or legal framework for concerted minerals beneficiation. For academics, the term beneficiation has brought about restless nights to even the most studious scholars. The biggest challenge being that it refers to an intangible concept. An extra-ordinary understanding of novelty. It requires looking beyond the obvious and mentally arranging old ideas in new ways. To date there is still contention and contestation as to the true meaning of the term more so in Zimbabwe. Therefore, the challenge lies in conceptualizing what it involves and what it means for the mining sector and related industry players.

For this writer, beneficiation refers to any subsequent processing undertaken on a mineral or primary product post extraction. It is the process of further manipulating a mineral’s innate properties in new and innovative ways into useful finished products that can be commercially sold for a monetary consideration. This implies that some value is added to the final product, transforming the mineral or combining the various minerals in new and innovative ways to produce a more valuable final product. This final product is worth significantly more than the constituent minerals. The key to beneficiation is the utility of the final product, for example a loaf of bread made of clay powder finds no utility in metabolic nutrition. However, perhaps it is more useful in a museum as a model depicting the types of loaves of bread produced by a bakery over the years.

Diamond beneficiation holds great promise for Zimbabwe. However, while the country can produce 

in excess of 25% of the worlds demand in rough diamonds it has not achieved any visible significant benefits. This is despite the discovery of the first commercial diamond claims in the country in 1997 at Rio Tinto’s Murowa and the 2001, 2003 and 2006 alluvial finds in the Marange and 2013 conglomerate find in Chimanimani areas. Prior to this, DeBeers the only company ever to conduct extensive exploration for diamonds locally concluded that there were no commercially viable deposits of the mineral. The company went on to give up its Exclusive Prospecting Order (EPO), but ensuing events have adequately disproved its claims. Since then, Chiadzwa is considered to be the largest find of alluvial diamonds and to have the world’s largest deposits valued at over US$800 billion. Confirmation of these estimates is pending thorough exploration which is still outstanding to date.

In order to extract the maximum possible value from diamonds, the missing piece in the puzzle is a local beneficiation strategy. This will allow the country to tap as much of the value of the diamond locally and retain the same before the deposits run out. Exporting the rough diamond through maximum extraction and exports has not achieved its stated objectives of improving the livelihoods of the locals or transforming the economy, as expected of such a valuable mineral.

Diamond industry quick facts

The global diamond jewellery industry was worth an estimated US$79 billion as of 2013 (DeBeers 2014). This translates from just over 146 million carats of rough diamonds produced in 2013. However, not all diamonds produced end up in jewellery. Meanwhile, according to the International Monetary Fund (IMF) Zimbabwe is reported to have the highest minerals per capita indices. Its Chiadzwa fields have the potential to produce 12 million carats of rough diamonds per year to beyond the year 2020. Given that the price of a carat of rough diamond varies between US$30.00 and US$18,000.00 it is of worth to pay attention to developments emanating from this industry. Zimbabwe’s diamonds are however being sold at a discount because of the country’s desperation to raise fiscal revenues due to liquidity challenges brought about by the restrictive measures put up by the foreign governments making it tough to trade freely. This means diamond are underperforming and the country is losing value to middle-men and precious jobs to foreign countries. However, by locally adding value the country could multiply what it is currently earning many times over. The simple statistics below demonstrate this.

Globally, producers were reported to have shared just US$18 billion in 2013 from 146 million rough diamond carats sold. Of this figure Zimbabwe reported a gross value of US$664 million from the sale of its diamonds, an amount that still needs to be shared between the government and its Joint Venture partners after paying off operational costs. In the final analysis, the government makes a paltry amount, meaning the State is still left holding the short end of the stick. This has to be compared against estimated earnings of US$79 billion for the global jewellery industry. Comparably easy, rich pickings made by a coterie of downstream players who usually do not even have diamond mines in their own countries. There is thus need for increased advocacy to locally beneficiate diamonds by setting up facilities modeled along the lines of the Zimbabwe Diamond Center so as to capture most of the value locally, since the most money stands to be made at the subsequent stages of diamond beneficiation.

While DeBeers still dominates the market, it is closely followed by producers like Russia’s Alrosa and new kids on the block like Zimbabwe which is still relatively in the early stages of developing the diamond mining industry. Figures for Rio Tinto might be contaminated since it also mines diamonds in Zimbabwe and its data has not been disaggregated for this purpose. However, despite this, the very fact that Zimbabwe’s Chiadzwa diamonds have been disaggregated and considered 4% of total global production is not a mere feat.

The diagram below shows the 2013 consolidated percentage production figures for each source:

Figure 1

Source: The Diamond Insight Report (DeBeers 2014: 38)

Developments along the diamond value chain

The diamond value chain refers to the various processes through which the diamond passes  until it reaches the market. It consists of six stages: exploration and production; rough diamond sales; cutting and polishing; polished diamond sales; jewellery manufacturing and finally retail jewellery sales. The greatest value addition and growth in value comes at the jewellery manufacturing and retail sales stages.

The diagram below show the value trends as the diamond passes through various stages of processing:

Figure 2: The diamond value chain

Source: Bain and Company (2013: 5)

Clearly, there is more value to be gained from diamond beneficiation through jewellery manufacturing and retail sales, than simply selling in the rough. There is also a growing recognition that diamond jewellery is considered valuable if it is made by reputable jewelers and sold from famous luxurious shops. Therefore, branding is everything in the industry. Locally there in now need to grow good brands building on the advantage the country has in controlling supply. In the USA a diamond ring sells for an average cost of US$3,700.00 in the up market retailers, at least two months’ salary for middle class white collar workers.

This illustrates that a diamonds’ value increases significantly as it passes through the value chain. Bain & Company report that it nearly quintuples as it passes through the value chain. However, the greatest value of up to US$50 billion is added at two stages: the jewellery manufacturing and retail stages (Bain & Company 2013: 4). However, critically they also report that diamond mining alone still achieves the highest profit margins of up to 20%. This presents numerous opportunities for Zimbabwe to pursue along the entire value chain, from the mine to the market since it possesses significant quantities of diamond deposits.

References

Bain & Company Incorporated and Antwerp World Diamond Centre. 2013. “Journey through the Value Chain,” The Global Diamond Report. Bain and Company Inc.: Boston.

Chininga, C. 2013. “First Report on the Portfolio Committee on Mines and Energy on Diamond Mining (with special reference to Marange Diamond Fields) 2009-2013.” Parliament of Zimbabwe Portfolio Committee on Mines and Energy. Presented to the Fifth Session of the Seventh Parliament of Zimbabwe on June 2013. S.C.4, 2012. Parliamentary Monitoring Trust of Zimbabwe: Harare.

DeBeers Incorporated. 2014. “The Diamond Insight Report” Available at   http://www.debeers.com/

http://www.debeersgroup.com/en/news/company-news/company-news/global-diamond-demand-reaches-record-levels.html,

Kimberley Process Certification Scheme. “Kimberly Process Statistics 2012.” 19 June 2013. Viewed on 16 September from https://kimberleyprocessstatistics.org/static/pdfs/public_statistics/2012/2012GlobalSummary.pdf.

McKinsey &Company. 2014. “Perspectives on the diamond industry” White Paper. Available at http://www.mckinsey.com/

Government of Zimbabwe. 2013. National Budget 2014. Printflow: Harare

Sunday Times (SA). “Fabulous wealth in Marange Diamonds” 8 August 2010.

The significance of diamond beneficiation to Zimbabwe Part 2: Potential benefits and prospects

The significance of diamond beneficiation to Zimbabwe

Part 2: Potential benefits and prospects

There are numerous benefits that can accrue from local diamond beneficiation which could help with the envisaged economic transformation of Zimbabwe. These include all of the following: Most of these entail more job creation, skills acquisition, modernization of the local economy, technological advancement, better performance of taxes, more revenue collection for the fiscus, inclusion of the informal SMEs sector, increase in the sophistication of local economy through diversification, widening of government tax base, increased tourist arrivals, increased visibility of the country leading to improved country perceptions/images, re-integration of the country into the global village through trade, industrialization and resuscitation of industry, infrastructure developments and improved standards of living for locals.

Many countries including Belgium, India, USA, Israel, China and Japan have successfully introduced beneficiation reaping benefits along the way. This is in-spite of the fact that most of these countries do not traditionally mine most of the minerals that they beneficiate locally. Rather they source them from producing countries at significantly lower prices than those at which they sell the finished fully beneficiated products. The industrialized nations in the West and East have grown their economies building on these models, cheap raw material imports from least developed nations and expensive finished exports to the same lowly developed countries. Critically, the industrialized countries have robust internal markets for their manufactured products.

Zimbabwe currently suffers from high levels of un-employment and under-employment. This is despite the country having a highly educated population and boasting the highest literacy rates in Africa (92%), competing directly with developed nations. Un-employment can be defined as a high number of people actively seeking employment or high number of employable people out of formal employment; while under-employment implies the under utilization of available skills. By investing into the infrastructure required for diamond value addition activities through more local beneficiation, the country stands to benefit from increased employment creation. More varied jobs are developed together with the introduction and growth of globally competitive modern industries. The Zimbabwe Diamond Centre plans to set up over 500 minerals beneficiation factories each directly employing 240 cutting, polishing and jewellery manufacturing experts. These jobs are usually the very specialized types which concurrently lead to skills development. However, the big employment creation benefits lie in the multiplier effects through growth of linkages with both upstream and downstream industries.

The industries and economies of the future are not only based on a knowledge worker, but also one with relevant skills and abilities in high value industries. One such industry is the jewellery manufacturing industry. Through concerted training skills development programme as part of the framework for minerals beneficiation the Zimbabwe could accrue these benefits. For example initiatives like the Diamond Education Center have significantly impacted on improved skills in minerals value addition through beneficiation in jewellery manufacturing.

Most importantly there are benefits to be made from economic modernization through technology transfer. Most of the equipment currently in use in minerals processing is patented by the inventors and thus becomes expensive to import under licence. However, adopting the minerals beneficiation strategy makes it easier for local fabrication experts to adapt the equipment for local use. This may entail reverse engineering of sophisticated equipment to reduce over reliance on expensive imported equipment. Given that initially the industry will be labour intensive with minimum automation, there will also be need for simplification of complex but relatively routine procedures.

The biggest benefits that come from diamond beneficiation lie in its ability to mobilize huge amounts of financial resources in a relatively short space of time. For a country like Zimbabwe that needs rehabilitation of old infrastructure and the development of new ones, this is a brilliant opportunity. Investments in infrastructure development, like better roads and facilities, are currently lagging and suffer from a dearth of resources. Instead of the country being loaned money by bilateral or multilateral institutions that levy punitive interest rates, we could encourage the development of a local savings fund for providing this financing at concessionary rates ensuring most of the benefits are internalized. The government envisaged Sovereign Wealth Fund could play as leading role in this while all companies involved in the diamond industry would be compelled to engage in extensive Corporate Social Responsibility (CSR) programmes that benefit local communities.

In all of this the livelihoods and standards of living improve from better jobs with more income. The diamond industry is amongst the highest paying in the world. Zimbabwe stands to benefit significantly if it can develop and adopt

Zimbabwe is a country of many “bests” from the best sight-seeing events, resorts and wildlife sanctuaries, weather and climatic conditions, hospitality and cultural heritage sites, to possessing some of the worlds bests in minerals exploitation (think platinum, gold, diamonds, asbestos, nickel, chrome, tungsten, coal, natural gas, iron over and above the some of the world’s most literate and easily trainable workforce. Useful side-stream benefits to a robust local diamond beneficiation industry would be increased international visibility of the country as it gains prominence as a safe tourist destination. This could lead to a rise in “Economic-tourism” whereby there are increased tourist arrivals by buyers. Concurrently there will be a growth of valuable local brands since most people in the world associate diamonds and diamond jewellery as the embodiment of wealth and luxurious living.

On the other hand, while the mining sector gives many tax incentives in order to encourage investments in this capital intensive industry, the government still stands to benefit from improved performance of various other fiscal measures. The government can better collect more taxes from numerous tax heads thereby widening the tax base; rather than over reliance on mineral royalties and licencing fees which constitute an important but minor contribution to State revenue. The following are the various taxes: Value Added Tax (VAT) from manufacturing value addition (MVA) processes; Pay-As-Earn (PAYE) and Social Security Contributions like NSSA and the AIDS levy which stand to benefit positively from the anticipated increased employment levels. The government also stands to benefit from various other income taxes e.g. corporate tax, capital gains tax, windfall tax, improved reported profits and dividends coming from enhanced profitability of local companies. This not only increases retention of more value locally but also leads to higher forex earnings from export of more valuable products.

Other downstream industries that will also grow in tandem with local minerals beneficiation include real estate, financial services, retail shops, motor vehicle manufacturing and sales, education, construction, research and development industries.  This entails useful parallel developments like the inclusion of the informal sector into mainstream economy due to companies increasingly sourcing for services locally, thereby improving sustainability of SMEs.

The table list below demonstrates diamond industry value sharing ratios:

Diamond industry value sharing ratios

Segment of Value Chain	Approx. value of global industry as at 2013	Zimbabwe makes	Total value added for stage (globally)
Rough diamond	US$18 billion	US$664 million	---
Jewellery making	US$54 billion	Unknown	US$25 billion
Retail sales	US$79 billion	Unknown	US$25 billion

Source: Adapted from DeBeers (2014), McKinsey & Company (2014), Bain and Company (2013) and National Budget (2014)

The table above shows that while diamond producing companies globally shared only US$18 billion that was made from the sale of rough diamonds, those countries which engaged in diamond jewellery manufacturing and retail shared a windfall of over US$50 billion. This aptly  demonstrates that the while possession of the diamond mining claims and producing the actual rough diamonds counts for a lot, it does not come close in terms of earnings potential to manufacturing value added jewellery. The critical two most valuable stages which produce the greatest value are the diamond jewellery making and retail segments, the subsequent value addition stages in the diamond value chain. The tragedy for Zimbabwe is also that the worth of its jewellery industry is unknown, leaving room open to under declaration of production.

In conclusion, it can be seen that although producing rough diamonds is an important source of competitive advantage, on its own it is inadequate to harness the full value of the diamond. It becomes necessary to add value to the raw mineral through beneficiating it into other useful finished products and goods. These finished goods are more valuable than the primary mineral, accounting for over 60 per cent of the global value added in the whole process. Therefore, beneficiation is seen to have significance for Zimbabwe. It helps the country earn the maximum obtainable value of the diamond and retain the same locally through various interventions like increased employment, higher tax collections, skills development, technology transfer, infrastructural developments, intergenerational wealth transfer and finally improved standards of living through sustainable natural resource exploitation.

The Prospects for Zimbabwe

Fortunately, private sector companies like the Zimbabwe Diamond Center have demonstrated leadership and visionary foresight by making headway to initiate diamond beneficiation in Zimbabwe. The Centre has developed a model which can both be adopted and adapted by government authorities when they consider it prudent to take up the issue seriously. The Center   proposes to set up a world class and outward focused export oriented diamond cutting and polishing industry in Zimbabwe. Initially it has planned a rollout of 500 factories countrywide, each with the potential to employ upwards of 240 staff of cutters and polishers, translating to 120,000 direct jobs created by one organisation focusing on one mineral alone. The multiplier effect scenarios mean a potential full employment situation in Zimbabwe, a feat that can be easily achieved given the relatively high levels of education of its labour force and economic sophistication.

On the ground currently the Center has both infrastructure and equipment that can be used to initiate a comprehensively robust beneficiation strategy. There is factory and office space adequate to accommodate 38 companies at any one time for the purposes of conducting viewing and auctioning of diamonds and diamond products. The Diamond Center also boasts of a secure multi-purpose self contained business center with all the required amenities associated with diamond trading: banking halls, insurance facilities, courier services, office space, jewellery retail space, convenience stores, and leisure facilities.