Q: What is the ruling of buying a diamond mine in Islam? I’m looking to go into partnership in buying a mine. What ruling is there that I need to be aware of?
A. According to our Shari’ah it is totally permissible to purchase a diamond mine or any other mine. Here are some basic rules to remember:
1) A condition for buying and selling a mine is that the original owner or owners should have acquired the land lawfully and started mining on that land. Once this condition is found then the mine can be sold and resold to different buyers. Such a deal will be regarded as a normal sale in Shari’ah, and the rules of a normal sale will apply. This is permissible and the earnings of that mine will be Halaal.
2) It is permissible to purchase the mine on credit; that is, paying for it over a period of time in fixed instalments.
3) If a partnership is created then it is necessary that a fixed percentage be fixed for each partner. It must be stated in the partnership agreement that the parties will share in whatever comes out of the mine according to these percentages. The percentages can be mutually agreed upon and can vary.
4) All expenses related to the mining must be shared by the partners and will be paid out from the profits before distribution.
5) The partners will also share any losses suffered in the course of their mining business.
6) Normally there is no Zakaat on the value of diamonds. However, if the diamonds are for resale, as will happen once the diamonds are removed from the mine, then Zakaat on those diamonds will be compulsory, because now the diamonds are merchandise or stock. You have to consider the current market value of the diamonds when calculating Zakaat on them. Also note that Zakaat on those diamonds will only be due after one Islamic year has passed from the time the diamonds were removed from the mine.
And Allah knows best
Mufti Siraj Desai