Mbada rakes in $1bn

via Mbada rakes in $1bn – DailyNews Live by Tendai Kamhungira, Mugove Tafirenyike and John Kachembere  18 MARCH 2014

As the storm over diamonds revenue in government rages on, Mbada Diamonds has become the first diamond mining company to publicly declare their revenue and how they used it amid pressure on other firms in the Chiadzwa area to do the same for transparency purposes.

President Robert Mugabe and government have been piling pressure on the diamond firms to be transparent with their revenue.

With factions in government trading accusations and counter accusations that the five diamond firms operating in Marange were under declaring revenue because executives at the firms were stealing money, Mbada yesterday declared that they made $1 billion in the four years they have been in operation.

In the statement, Mbada said they paid $424 million in taxes, dividends and advances to government and spent nearly $34 million on corporate social responsibilities.

The firm used $214 million in capital expenditure, $225 million in direct production and related expenditure and $138 million in operational expenditure.

Mugabe last week said government would investigate corruption in the diamond industry while some government officials, have for the past few weeks, accused diamond firms of stealing diamonds and money meant for the State.

The saga was touched off by officials from the Marange-Zimunya Community Share Ownership Trust (MZCSOT) who recently told Parliament that certain Zanu PF members were interfering with the operations of the trust, resulting in companies operating in the area failing to honour their alleged $10 million each pledge to the community.

The parliamentary portfolio committee on Indigenisation is also leading an investigation into the operations of the diamond companies.

This comes after Mugabe was in 2012 presented with a $50 million dummy cheque in which the then minister of Indigenisation, Savior Kasukuwere said all the five diamond mining companies pledged to contribute $10 million each towards MZCSOT.

But all the mining firms told Parliament last week that they never pledged any money towards the trust and suggested that Kasukuwere had misled the president.

In the statement yesterday Mbada, said besides contributing to the State and advancing money to government, they had used more than $34 million in corporate social responsibilities, which is $20 million more than the $10 million Kasukuwere said was supposed to be handed over to the Zimunya/Marange Trust.

“However, notwithstanding these challenges and living true to our guiding principle of “harnessing diamonds for the people”, the corporate has tried to ensure that not only does it contribute to the national fiscus but it also strives to benefit the generality of the people of Zimbabwe who are the ultimate owners of the resources.

“Mbada Diamonds has carried out extensive corporate social responsibility initiatives. Whilst balancing these responsibilities, the corporate has also kept its vision of operational growth by continually investing into upgrading its operational capacity annually as well as conducting extensive and exhaustive geological activities.

“The vision of Mbada Diamonds is to continue to impact the everyday lives of the ordinary citizens of our great nation. From 2014 onwards, the corporate intends to invest heavily into mining conglomerate and deep seated kimberlitic material which is projected to bring more revenue compared to alluvial mining which is on the decline. This new phase of mining will require extensive capital outlay which is the corporate’s primary objective from 2014 onwards.

“We take our business seriously and we also take our capability of positively impacting our people in our environment seriously. We wish to share our $1 billion landmark achievement with our employees and stakeholders and to assure all that our intention is to bring positive development to our country and to thank those who have rendered us the support.”

However, Mbada feels that there are some people in government, who have deliberately embarked on a mission to destroy them as alluded to in their parting shot of their statement yesterday.

It reads: “Lastly, but not least, to our detractors, we wish you good luck,” but the statement was not elaborated.

Mbada Diamonds has also been under fire for delaying to pay suppliers with reports that the company was struggling. Government insiders also said Mbada and other diamond firms were facing closure due to poor investment and lack of adequate production. But the company seemed to respond to this in their statement.

“This (success) would not have been possible without the stakeholders that support our operations. Whilst our economic environment poses operational challenges which have also affected us as a corporate and cumulatively our stakeholders, we will continue to strive to alleviate these challenges to the best of our abilities.”

Insiders claim factional battles in Zanu PF have targeted diamond firms. The diamonds revenue saga has hit the headlines in the past two weeks especially after the diamond firms claimed that ministers lied to Mugabe.

The chairman of the parliamentary committee on Indigenisation and Empowerment, Justice Mayor Wadyajena told the Daily News his team was simply carrying out its oversight role as dictated by the Parliament’s standing rules and orders.

“I do not report to any minister, official, the press or whoever,” Wadyajena said.  “I am my own man and we investigate, compile a report, make recommendations and table them before Parliament.”

Commenting on allegations that his committee was targeting a rival faction, Wadyajena said he was not party to any faction and that he was not aware if such factions exist.

“Whoever told you that may be better placed to clarify on the so-called factionalism, because in Zanu PF I am only aware of the first secretary (Mugabe)’s faction,” he said.

There is however, a discord on the funding of the community share ownership trust and some mining companies have professed ignorance over the $10 million pledge.

Diamond mining firm Jinan last week told Parliament that the company was not formally told about contributing $10 million towards the community share ownership scheme.

“We have not contributed anything towards the MZCSOT because we are not aware of it and because we have not been on the market,” said Jinan deputy director Zacheus Ncube.

The mining company, a joint venture between the Chinese and the government-owned Zimbabwe Mining Development Corporation (ZMDC), came under fire from Wadyajena’s committee.

In the run-up to last year’s elections, government established a number of community share ownership schemes across the country under an indigenisation and economic empowerment campaign aimed at drumming support for Mugabe.

However, after it became apparent that villagers were duped about the community share-ownership trusts by some government officials, Mugabe is now pilling pressure on the mining firms.

Walter Chidhakwa, the Mines minister, told the media that he was not aware of the companies’ production levels.

He was quoted as saying: “As a partner, this information must be shared regularly, and we must be privy to the happenings at these diamond fields,” he said.

“There is no way I can be a minister of Mines without knowing what is happening in these diamond mines.”

Early this month, other diamond firms told Parliament that Mugabe was made to present a fake cheque to villagers in Marange by his ministers for the community share ownership trust, while they knew that there was no money coming from the mining companies.

Munyaradzi Machacha, Anjin board member, told the legislators that at no point did the companies pledge $10 million each for community development and said they had relayed the information to Kasukuwere at the time, during the launch of the share ownership scheme in Manicaland in 2012, who in turn reportedly said they should not worry about making any immediate payments.

Mbada Diamonds chairman, Robert Mhlanga also told Parliament that his company had not been approached on the $10 million pledge.