Govt struggles to pay US$18 million debt

Source: Govt struggles to pay US$18 million debt – The Zimbabwe Independent July 1, 2016

THE cash-strapped government is struggling to pay a US$18 million debt it owes to Diamond Mining Company (DMC) for its equipment, amid indications that it has only coughed up US$3 million since April.

By Herbert Moyo

DMC was one of seven diamond mining firms in the Marange which were shut down by government in March as it moved to form the Zimbabwe Consolidated Diamond Company (ZCDC) where it has a 50% stake.

Other companies which were forced to merge are Anjin, Mbada Diamonds, Marange Resources, Jinan, Gye Nyame and Kusena.

Mines Minister Walter Chidhakwa cited the lack of transparency and accountability in diamond mining operations as well very low remittances to treasury as reasons for forcing the companies to merge.

While companies like Mbada and Anjin rejected government proposals, DMC entered into negotiations which resulted in the parties agreeing to a US$18 million payment.

Chidhakwa confirmed last week that the government had negotiated with DMC, although he did not disclose how much the deal was worth.

Sources in the Mines ministry, however, said government agreed to pay US$18 million in instalments.

“The government is struggling to pay. It was supposed to pay US$1 million per month but has failed to cough up over the last two months,” said one source.

Government’s troubles with the DMC debt have also thrown into doubt its capacity to pay for the DTZ-OZGEO diamond concession in the Taka forest in Chimanimani (Manicaland) which it is angling to take over and include ZCDC.

Government signed a memorandum of understanding in April to take over the DTZ-OZGEO concession as well as plant equipment.

DTZ-OZGEO is a joint venture between Econendra of Russia and the Development Trust of Zimbabwe (DTZ), which is directly linked to the ruling Zanu PF party.