The Odum of Ala Igbo
Hail Biafra!
What happened was Mugabe and his Government decided to give licenses to an assortment of Chinese firms, political cronies , the army and state mining companies. He did this to buy some of them off for political reasons. The diamonds were of the alluvial variety and once those were exhausted the companies started stalling on putting in more capital. In addition to that the Government was losing money because a lot of the cash was being siphoned away. It is pretty much an open secret that party connected officials, Chinese investors and other local people got the bulk of the cash. These issues were brought up multiple times and Mugabe's Government played the usual anti-West rhetoric and praised the Chinese investors. If Zimbabwe had used the Botswana model it would have increased transparency and maybe forced some of the money to pass through state coffers. Mugabe went the opposite route and created a smorgasbord of operators who benefited. The horse has already bolted and the old man is like 10 years too late to fix the problem, if he ever wanted to do so in the first place.
Alluvial diamonds always cause this sorts of problems