‘Anjin has no direct agreement with Govt’

‘Anjin has no direct agreement with Govt’ | The Herald March 16, 2016

Anjin Investments has emerged as the biggest loophole through which proceeds of Chiadzwa diamonds were spirited out of the country amid revelations that the company never remitted any of the proceeds to Treasury. It has also emerged that the company, which had the biggest operation, had no direct agreement with the Government to extract diamonds from the area.Well-placed sources told The Herald Business that a lack of accountability because of the structure of the agreement saw the company fail to remit meaningful proceeds to the fiscus. This was in spite of the existence of a Cabinet-approved structure which stipulated a sharing ratio of 75:25 in favour of Government including royalties and other taxes.

However the sharing ratio was not implemented and it has now emerged that Government only got about 20 percent of the declared proceeds not only from Anjin but from the majority of the mining companies in Chiadzwa including those where the State had interests.

“The mining companies created an intricate and obscure layer, which had multiple shelf companies with multiple listings in places such as Hong Kong, Dubai and Israel. This enabled the companies to cover the trail of diamond sales and proceeds including the construction of an airstrip which facilitated the shipment of the mineral out of the country direct from Chiadzwa.

“At best, Government would get about 20 percent of declared proceeds which includes 15 percent royalties due to the tax collector, Zimra,” said the source.

As a result, according to President Mugabe, $15 billion was looted from diamond mining by companies since the organised mining began in the Chiadzwa area in 2009.

The sources say there were discrepancies between the CD1 forms declared to the Reserve Bank of Zimbabwe and what came to Treasury from the diamond auctions.

“In fact Anjin, refused Zimra oversight while even the Minister of Mines at that time (Obert Mpofu) had no knowledge of the terms of the Anjin agreement, which was said to be in higher offices elsewhere. And this made it difficult for Government to bring them to account.”

The majority of companies are now resisting to be part of the consolidated structure meant to address issues of accountability and transparency.

Mines and Mining Development Minister Walter Chidhakwa recently said most of the companies invested to mining alluvial diamonds while no investment was made on exploring kimberlite deposits which are difficult to mine and process. “Most of these diamond JV companies were cherry picking easy to mine/high grade alluvial deposits and not blending with low grade ore (conglomerate) which is difficult to mine and process.

When diamond production commenced in 2009, individual companies pledged varying amounts of investments into diamond mining sector. Anjin Investments pledged $132 million, but to date no amounts of their investments is known as they have not submitted any audited accounts to Government. DMC pledged to invest $50 million and has sunk $41 million, Jinan spent $137 million having pledged to invest $200 million. Mbada diamonds pledged $100 million while it invested $48 million.

Minister Chidhakwa said closer scrunity of the contribution of the diamond sector to fiscus reveals the fragmentation that called for consolidation. The sector’s contribution to fiscus since 2010 to 2015 amounts to $637 335,956, an amount which was at one time projected to be the expected contribution for a single year. 2011 saw the highest contribution at $168.54 million while 2015 had the lowest at $23.5 million.

Finance and Economic Development Minister Patrick Chinamasa, without condoning the chaos that gripped invasion of Chiadzwa, is on record saying the socio-economic impact of diamonds, was felt more in the economy, especially Mutare, during the diamond rush of 2006.

The fact that outrageously little benefit was realized from diamond mining, flies in the face of the pomp and anxiety that gripped the nation around 2009 amid claims Zimbabwe could supply 25 percent of the value of diamonds traded on global markets for the precious stones.

COMMENTS

WORDPRESS: 3
  • comment-avatar
    tonyme 6 years ago

    Does this explain how some ministers became rich overnight. They approved the construction of an airstrip knowing very well that the Chinese and Israelis were sidestepping all legal procedures so they can loot wealth from the country including bio-looting as well. We used to think Lobengula was a betrayer, but look at the educated people how they have sold the entire continent even during the age of enlightenment.

  • comment-avatar

    On this one ask Mnangagwa, who has a son married to an Anjin chef daughter.

  • comment-avatar
    amina 6 years ago

    Where in the world has the military ever been involved in mining, but in Zimbabwe with Mugabe as the commander in chief, first president and secretary of zanu pf, the and the chancellor of all zimbabwe state university, the chairman of au ans sadc it happened. what a fool is mugabe, with all those titles yet he is busy sleeping.