Zim diamonds: An insider’s confession

Source: Zim diamonds: An insider’s confession | The Herald May 30, 2016

Book: The Rise and Fall of Chiadzwa 
Author: Lovemore Kurotwi
Publisher: RAE Holdings (2016)
ISBN: 978 0 797 471 085

When the poor are crunched into by-products of their circumstances, as the rich evolve into monsters of their lust, money matters more than morality. This is the story of Chiadzwa diamond fields, a site of national promise and missed opportunities. Imperilled by financial opacity and institutionalised sabotage, smuggling and corruption, Zimbabwe’s diamond industry has fared below capacity.

For the past decade, Chiadzwa has been widely considered the mainstay of Zimbabwe’s economic recovery but not much has come of it. The messianic halo of the eastern deposits has dimmed, with recent reports indicating that mining companies in the area may have prejudiced Government of $15 billion.

While diamonds have added a sparkle to neighbouring economies, Botswana, South Africa and Namibia, Zimbabwe is yet to make the most of its reserves. Government recently moved to reclaim the promise of Chiadzwa with the inception of Zimbabwe Consolidated Diamond Company to replace erstwhile miners, an intervention that has brought about transparency and profitability, inspiring new optimism.

Fair, fresh start and good riddance to Babylon! However, a post-mortem of the elapsed dispensation is still the cause of popular deliberation and stories are emerging about what went wrong with Chiadzwa. “The Rise and Fall of Chiadzwa” (2016)by founding director of Canadile Mining, is an inside story about how Chiadzwa lost it all.

The book was recently launched in Harare a few days after the courts cleared Kurotwi of fraud charges after a six-year legal battle. Kurotwi was arrested in 2010 for allegedly misrepresenting to then Mines and Mining Development Minister Dr Obert Mpofu that his company, Core Mining, was a special purpose vehicle of a South African company, BSGR, which would finance a joint venture with the ministry in Chiadzwa to the tune of $2 billion.

He was acquitted earlier this month after the court determined that the ministry had not addressed conditions laid out by BSGR for participating in the joint venture, hence the latter’s non-participation.

Kurotwi revisits circumstances surrounding the court battle in the book, but the section can be put down to a highly personal sub-plot which does not lend itself for a third party to endorse or refute beyond what is established in the courts. Although the book tends to be an extended affidavit or legal post-mortem, sometimes to a fault, in this respect, it has far more to offer.

There are interesting insights throughout the book, gleaned from Kurotwi’s title role involvement at the dawn of Chiadzwa and worm’s eye view after Canadile’s mining concession was crossed out. “The Rise and Fall of Chiadzwa” sets out 10 years ago with the rediscovery of alluvial diamonds in Chiadzwa, located in Marange, in the eastern highlands of Zimbabwe.

The story of “magweja,” the daring protagonists of the 2006 gold rush, is now legendary, but Kurotwi revisits the ironies from the transition of the free-for-all panning and smuggling to the formalisation of Chiadzwa under Public Private Partnership Agreements.

Kurotwi calls out the ironic contrast from the excitement and liquidity impetus occasioned by the illegal diamond panners to the frustration and lack of accountability which obtained after formalisation.

“One would expect that with order and sanity finally brought in and proper mining taking place, we would have even greater hype and much higher liquidity this time properly felt in the country as a whole . . . ” argues Kurotwi.

“But that was not the case. As soon as there was orderly mining in Chiadzwa, finance minister after finance minister complained that there was no money coming out of Chiadzwa diamond mining into the country’s treasury,” he says.

Kurotwi faults this on lack of creative accounting, lack of accountability and failure to beneficiate the stones. Towards the end of their brief history, mining companies in Chiadzwa claimed that they were running out of alluvial diamonds and had no capacity to dig dipper, totally bad news considering the optimism that had been vested in the stones.

The proposal by Government’s mining arm, Zimbabwe Mining Development Corporation (ZMDC), to consolidate operations into a single entity for greater productivity, accountability, sustainability and profitability, in light of dwindling fortunes, met resistance from the companies.

The companies’ operations apparently revolved around self-interest as it emerged that they had relapsed from their obligation to develop the host communities whom they had displaced from the rich deposits.

“Firstly, the resettled farmers are a bitter lot because the diamond mining companies reneged on the promises they made before transferring them from Chiadzwa to Arda Transau as a relocation measure in order to make way for orderly mining of diamonds,” Kurotwi says.

“These villagers were also promised job opportunities at the mines but only a few landed posts there. Crucial posts were taken up by foreigners and people from other provinces,” he points.

The companies have not made good their commitment to finance the Zimunya-Marange Community Share Ownership Trust and road networks in the province have not been adequately serviced.

Mines and Mining Development Minister Cde Walter Chidhakwa has since seen the consolidation of mining operations through and has been updating the nation on sales by the newly constituted Zimbabwe Consolidated Diamond Company.

“There is no going back because the mines were a big let-down during their stay in Chiadzwa. Their time is up and it is high time our people benefit from the proceeds of their resources,” Minister Chidhakwa said.

“All the companies never declared a dividend to Government as a shareholder. They always gave excuses of making losses, but how can loss-making ventures continue operating, with some of them asking for new concessions?” the minister queried.

Kurotwi feels his frustrated ambitions bitterly. His trial post-mortem has a lot to say about how Government can create a more enabling environment for citizens to maximise their prospects without being entangled in red tape and political bungling.

He alleges that the Zimbabwe Diamond Technology Centre was his original conception, but he failed to get it past political frustrations and corrupt solicitations. He also relates a missed opportunity to create a vibrant city within the vicinity of the diamond fields, an idea which he says he tabled to indifferent colleagues.

“Hot Springs (situated near Chiadzwa diamond fields) still remains this semi-arid, semi-desert lone spot with hot water shooting naturally from the bowels of the earth as its only attraction,” Kurotwi observes.

“Yet we could have created a serious tourist hub at Hot Springs, initially created out of the lure of Chiadzwa diamonds, but with the capacity to survive on its own long after the diamonds would be exhausted,” he says. The brief but dense book offers several insights whose adoption can result in ordinary people benefiting substantially from the precious stones.

However, there are passages that could be rephrased for clarity and brevity, while arguments for and against policy can be parsed to reflect balance rather than equivocation. The merits of the narrative are slightly clouded by the aggrieved sub-plot against Minister Mpofu’s alleged corruption which might have been corroborated with varied references for credibility.

As to how the consolidation dispensation sits with him, Kurotwi is for the values newly brought about and urges policy consistency going forward.

COMMENTS

WORDPRESS: 1
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    harper 6 years ago

    Obert Munchausen at work again. All that he touches turns to Iron Pyrites.