Ministers duck Mugabe’s $15bn gems bombshell

via Ministers duck Mugabe’s $15bn gems bombshell – The Standard March 13, 2016

The government has refused to elaborate on President Robert Mugabe’s claims that diamonds worth a staggering $15 billion could have been stolen from Marange under the watch of State institutions.

BY NDAMU SANDU

Mugabe made the sensational allegations in an interview published on March 5 by the State- controlled media to commemorate his 92nd birthday.

The claims stirred a hornet’s nest with Zimbabweans demanding answers about the alleged grand theft.

Mines and Mining Development minister Walter Chidhakwa and his predecessor Obert Mpofu last week flatly refused to comment on the president’s claims, which helped to buttress that diamonds were being stolen at a grand scale by companies and individuals linked to the ruling Zanu PF.

Chidhakwa simply said: “I will not comment on Marange diamonds,” when asked about the issue.
Earlier on, Chidhakwa said he needed to rest since it was a weekend.

He could not budge even after he was reminded that he was a government official and should provide answers to questions asked.

On Friday, Mpofu said he was not a clumsy minister who would speak on a portfolio held by a Cabinet colleague.

Mpofu was at the helm of the Mines ministry when diamond licences were handed out to the Zimbabwe Mining Development Cooperation (ZMDC) and when diamond mining in Marange reached its peak.

“The president has spoken and the minister has spoken. I am no longer minister of Mines so you need to speak to the minister of Mines,” was all Mpofu could say last week.

In the interview with ZTV, Mugabe said government had not received much in terms of revenue from the diamonds since the companies started operating in Marange after the 2008 diamond rush.

“I don’t think we have exceeded $2 billion or so, no and yet we think that well over $15 billion or so have been earned in that area,” he said.

Mugabe’s disclosures followed Chidhakwa’s order last month for Marange diamond producers to cease operations as they were dragging their feet to be amalgamated into the Zimbabwe Consolidated Diamond Company (ZCDC) — a new company formed to halt leakages in the diamond sector.

The affected diamond producers are Anjin, Diamond Mining Corporation, Jinan, Mbada, DTZ OZGEO, Rera, Gye Nyame, Kusena and Marange Resources.

Government wholly owns Marange Resources and had a 50% stake in each of the remaining seven companies.

In ordering Marange diamond miners to stop operations, Chidhakwa accused the gem stones producers of operating without licences (which expired in 2013) and of cherry-picking easy to mine or high grade alluvial deposits and not blending with low grade ore (conglomerate), which is difficult to mine.

He said the mines were not properly explored and the resource was being mined before it was fully proven.

He said over the past seven years, the diamond companies paid to government just over $600 million.

Chidhakwa said Anjin had failed to produce audited accounts detailing its investment into the mine.

This dovetails with a 2012 report by Partnership Africa Canada (PAC) that the miner had multiple perception problems that undermined its ability to be considered a legitimate mining interest.

“Almost a year after receiving the KP’s [Kimberley Process] blessing to export, questions continue to be asked how a company with no previous mining experience won the largest and most lucrative concession in Marange,” PAC said in a report, Reap What You Sow: Greed and Corruption in Zimbabwe’s Marange Diamond Fields.

“Anjin currently operates eight mines, yet has the output expected of three.

“This suggests two possibilities: either their mining operations are so amateurish they are wasting good ore, or there is major leakage underway.

“The lack of regular production reports makes it difficult to know which is more likely.”

The operations of diamonds producers have been shrouded in secrecy, with Treasury complaining that revenue was not coming to the fiscus. A parliamentary portfolio committee on Youth Development and Indigenisation had to invoke parliamentary rules after diamond producers skipped appearing before the committee for nearly a year.

Former Finance minister Tendai Biti spent his stint during the era of the inclusive government chasing shadows after diamond producers failed to contribute meaningfully to Treasury coffers.

Biti accused a coterie of individuals of benefitting from Marange diamonds.

In an apparent reference to Biti, Mpofu in 2012 accused those that were critical of mining for failing to support the industry.

“What worries me most is that whoever speaks loudest about mining has not contributed a penny to the mining sector, as they have done with the rest of the economy. Look at all the presentations; the National budget, the MTP (Medium-Term Plan) and the Mid-Term budget review. They all complain about mining, saying it is not giving much to the economy. You cannot reap where you have not sown,” Mpofu said then.

In a 2012 interview with The Standard, Mpofu said one could not talk of transparency on Marange diamonds as long as sanctions were in place.

“How do you become transparent when you know there is a lion waiting for you to just walk in front of it and maul you? That is the effect of sanctions. If they know how you are trading, they will interfere with that,” Mpofu said.

“They just want to know who is buying what and when and how he is paying so they pounce on that transaction through their international networks.”

Observers said last week that the buck stopped with Mugabe and he should clean the mess by providing clear evidence of the looting so that the country works on measures to recover the looted funds.

Marange diamonds were seen as the saviour of a nation starved of budgetary support after Harare broke ranks with Western capitals over human rights abuses and escalating democracy deficit.

Under the guise of protecting the resources, government was evasive on the operations and sceptical of anyone who it suspected wanted to sabotage the sale of the diamonds.

One such unfortunate person was Kimberley Process monitor Abbey Chikane who had crucial documents stolen from his bag by state security agents. The contents of the documents were splashed in state media. He would tell our sister paper, NewsDay, in 2012 that he had anticipated such an occurrence.

“We were in a situation where there was too much tension among all the parties internal and external and I understood exactly why it happened. It did shock me but I just understood that, especially in Zimbabwe, it was bound to happen,” Chikane said.

Despite the controversy surrounding the looted $15 billion, government is moving with speed to ensure transparency.

In an update on the ZCDC operations, Finance minister Patrick Chinamasa said the company had registered success in its operations as daily figures were being accessed by Treasury.

He said the company had already extracted 100 000 carats of diamonds from Marange, Kusena and Gye Nyame. He said government had put $3,5 million in the diamond mining company so far.