Diamond firms dismiss claims

via Diamond firms dismiss claims – DailyNews Live by Mogove Tafirenyika 9 MARCH 2014

Firms mining diamonds in Chiadzwa say they never pledged $10 million each and were never consulted on the Marange-Zimunya Community Share Ownership Trust (MZCSOT) as claimed by Chief Gilbert Marange and some government officials.

This emerged after officials from Mbada Diamonds, Jinan Mining, Marange Resources, Anjin and Diamond Mining Company (DMC) appeared before a parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment yesterday to answer to charges that they were reneging on their promise to provide $10 million each to the trust.

Two weeks ago, MZCSOT chairman Chief Marange informed the committee that of the five diamond firms, only Mbada Diamonds and Marange Resources had paid only $200 000 each to the trust from the $10 million promised.

The committee, chaired by Zanu PF Gokwe Nembudziya MP Justice Mayor Wadyajena, heard oral evidence from Mbada Diamonds chairman Robert Mhlanga, who said the $200 000 his company had contributed towards the trust was out of the diamond firm’s own volition.

But Mhlanga said Mbada had actually invested more than $30 million dollars in Marange and Manicaland at large, with 40 percent of it going towards Marange.

Mhlanga said nobody had ever approached his company to request for the $10 million payment. He said his company was not even represented when President Robert Mugabe officially launched the MZCSOT in July 2012.

“I would say with certainty that we never made any pledge to contribute to MZCSOT,” Mhlanga said. “Whatever, contribution we have made is because we strongly believe that when there is need to help, we do help.

“There is a lot of misconception that has taken place over the issue but if you check, we have actually contributed to the community far more than the $10 million dollars we are alleged to have pledged.”

Turning to indegenisation, Mhlanga said he agreed with the principle that people must own resources but emphasised that there was need to work with investors, saying the two needed to be properly balanced.

“We would actually want to see locals own even more than that but the challenge is that to own the shares, one has to buy them.”

He said there was need to create a conducive environment to attract foreign direct investment.

“If we do not have a conducive legal framework that guarantees foreign investment, we will continue to look at our assets and resources without doing anything about it,” he said.

Mhlanga said Mbada Diamonds contributed over 75 percent of all the revenue that government collects from all diamond mining firms in Marange.

He said his company had bailed out government when it was struggling to raise civil servants’ salaries, forking out between $15 and $20 million to Treasury. He also said board members at Mbada received $5 000 per month contrary to perception that they were raking in tens of thousands of dollars per month.

Mhlanga also explained that diamonds were a national resource and as such should benefit the whole nation besides Marange and Manicaland.

Marange Resources, which has also contributed $200 000 to MZCSOT, informed the legislators that it pledged $2 million instead of the $10 million reported.

Mark Mabhudhu, the company’s chief executive officer, said they were aware of the need to honour the pledge but said the company had been adversely affected by the current liquidity crisis facing the economy.

Mabhudhu said his company had already contributed about $22 million through corporate social responsibility programmes between 2011 and 2013.

Jinan Mining said they were made to believe that the $10 million was to be paid collectively by the five diamond mining firms.

Enock Moyo, the Jinan chief executive officer, claimed that the cheque that Mugabe presented to the Marange community was a dummy because they had indicated that they did not have cash at hand.

Moyo said Justice minister Mnangagwa, who was then minister of Defence and his ex-Indigenisation counterpart Savior Kasukuwere, had told them that they were free to fulfil their pledge over a period of five years.

He said they have not made good on the pledge owing to low productivity which has led to a dire financial situation at the Marange mine.

“I personally spoke to minister Kasukuwere who, working with minister Mnangagwa, made us believe the money was not immediately needed as he said we could do with part payments,” Moyo said.

“Resources have been dwindling and we have only been accessing low value alluvial diamonds and so we have been battling to ensure that the company survives.”

DMC, on the other hand, said they were surprised to learn that the $1,5 million they had pledged was needed as a lump sum. The firm said it had assumed the cash was supposed to be paid in tranches.

Ezekiel Zabanyama, the DMC chairman, said they had informed the Zimbabwe Mining Development Cooperation (ZMDC) that the amount was too steep for them to make a one-off payment.

Zabanyama claimed that the absence of a proper administrative structure at ZMDC after the dissolution of its board had led to a communication breakdown.

He said ZMDC instructed them not to honour their pledge until further notice.

“This (failure to honour the pledge) was not due to lack of commitment on our side, but a breakdown of communication,” Zabanyama said.

“There is a lot of confusion and when we asked for guidance on how we should go about it, we did not get it.”

Wadyajena’s committee refused to entertain oral evidence from Anjin marketing manager Munyaradzi Machacha, saying the company’s directors needed to appear rather than junior officials.