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SW Radio Africa Transcript
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| Violet Gonda presents the final segment of her interview with
Andrew Cranswick, CEO of African Consolidated Resources, the
company in the middle of a legal wrangle with the government over the Chiadzwa
diamond mine. The alluvial diamond fields in Chiadzwa are one of the richest in
the world but corruption is swallowing up all the profits, which could rebuild
Zimbabwe . Cranswick talks about the corruption, the South African ‘crooks’ who
have been given permits to mine Chiadzwa, and his fears that the unrest created
by these diamonds could lead to war, as has happened in other parts of Africa.
He accuses the State of allowing a ‘bunch of South African smugglers’ to manage
Zimbabwe ’s most important cash asset.
BROADCAST: 02 APRIL 2010 |
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VIOLET GONDA: Welcome to the second part of the interview with Andrew Cranswick, the CEO of African Consolidated Resources, the company in the middle of a legal wrangle with the government over the Chiadzwa diamond mine. In the first part of the interview Cranswick talked about the history of, and the controversy behind, the Chiadzwa diamond mine. The alluvial diamond fields in Chiadzwa are one of the richest in the world but corruption has apparently swallowed all the profits. There is no doubt that these resources should benefit the deeply troubled country yet the Zimbabwean people have nothing to show for the natural wealth under their feet. There are some who say diamonds, like oil are a non-renewable resource and should be regulated. So in this final segment I started by asking Cranswick to respond to those who believe that such resources should not be under the control of private investors but by the State. ANDREW CRANSWICK: First of all, all minerals – not just diamonds and oil – are non-renewable. Platinum is non-renewable, nickel is non-renewable, copper is non-renewable. The only mineral that we are mining at the moment that is in some way renewable is phosphate. Now we’re mining a non-renewable resource but if we recycled sewage then it would be somewhat renewable. So it’s not just diamonds and oil, it’s all minerals that are non-renewable and I’ve just outlined the best way, and it’s been proven in countries like Australia, Canada, Tanzania and now Botswana, that if you don’t involve private capital and private equity these things will never be developed. The State has controlled Marange, albeit illegally, the State has controlled and mined Marange for four years and yet not one cent has flowed back to the Zimbabwe people and now we want to let South African crooks manage our natural resource? Is that sensible? That’s rubbish! So should the State be involved? Yes because it takes 12% royalty on diamonds. Should the State be involved? Yes it takes 15% corporate tax on mining companies and gold mining companies, 35% on other corporates. It is involved. GONDA: You keep talking about South Africans smuggling diamonds from Zimbabwe and just now you have described them as crooks. What do you know about their operations in Zimbabwe ?
In the north, the Mbada, the so-called Mbada Syndicate is funded by a company called Reclam or the new Reclamation Group who are scrap metal traders in South Africa and if you read their company documents, the only thing they have ever, ever, ever done or intend to do supposedly is to trade in scrap metal. Now suddenly these are diamond mining experts and the Minister himself admitted that there are crooks in the companies operating. He admitted at the Parliamentary Select Committee - he said I know there are crooks there but the diamond industry is full of crooks so what can I do? He also admitted that the licences were not given with proper procedure. Now Reclam interestingly has been operating at Zisco for ten years now without any tender process being followed, without any tender renewal being followed, no-one checking on what they are exporting compared to the value they are paying, no-one doing a forensic audit which you would expect. They are digging down a mountain of slag from Zisco’s years of operation and shipping out something called chilled pool iron, there appears to be some discrepancies on paperwork which should call for a forensic audit. So in my opinion they have been essentially taking Zimbabwe ’s assets for ten years already and now they want to up the ante a bit and take more of our assets for cheap or free. So this is just, it is unacceptable, I cannot believe that serious and honest people in the government will allow this for much longer. GONDA: Is it true that some of the people who are running Mbada Diamonds are related to the Minister, to Minister Obert Mpofu? Have you heard anything about that? CRANSWICK: Only what I have read in the press from the Parliamentary Select Committee that the Minister decided it appears, to appoint one of Reclam’s own people as his own director and the chairman, Dr Robert Mhlanga has been appointed, yet he is a partner, a long-standing partner, in fact he facilitated and brokered and is involved in the Zisco deal and now he gets appointed as the government representative. How can we have the fox looking after the henhouse? So and then what I hear about other people being appointed, so it’s not transparent, if you look at the joint venture agreement between the Reclam’s subsidiary and the ZMDC it’s heavily loaded in favour of control by Reclam. They have exclusive rights to market all the goods, they are going to do transfer pricing, there’s no security to check whether they are not smuggling some of the goods, so it’s just pathetic. Why would the government, why would the minister go and joint venture with the scrap metals trader on the north of ACR claims and a bunch of smugglers and night club owners in the south instead of doing it with a transparent public company like ACR who has the legal rights anyway and has offered a more favourable joint venture to government than either of the ones underway? It would immediately clear up the Kimberley Process issues, it would immediately clear up the sanctions issues and we would do it transparently – perhaps that’s the problem. Perhaps certain people don’t want it to be transparent because then money can’t change hands. GONDA: And what about human rights abuses?
GONDA: Is it correct to say that whenever there is terrible unrest in countries with such resources, the resources don’t last and if this is true are you able to tell us how long will this mine last in Chiadzwa?
Some people argue that Botswana is an exception – it’s not, Botswana ’s diamonds are not alluvial. They are Kimberlite deposits which are difficult to mine by hand and they're buried under desert sand. So Botswana ’s not an exception in that rule. So my terror as a Zimbabwean and as a patriot, never mind ACR ’s interest, is that this is going to lead to war and we’ve already seen death and bloodshed related to this totally unnecessarily and my fear is that it’s going to lead to war. So that’s fear number one in terms of the unrest, much more important than the diamond resource being mined out, human lives are more important than a pretty stone on a finger. The second thing is the life of the resource. At first we thought it was only ten to 15 years life because we intended to mine it quite aggressively in terms of tonnage and so we were very, very concerned about this rape and pillage of it and we still are because it’s not good for the diamond industry and it’s not good for Zimbabwe. But if it’s mined responsibly and by responsibly I mean at a reasonable rate, we don’t want to mine it too fast because it will affect the price of diamonds negatively or we will be cutting off our own nose to spite our face as a country. So if we mine it responsibly and steadily I believe it has got about a 30 year mine life, that particular deposit on our claims. But there are deposits that are similar to it and related to it in Chimanimani that have nothing to do with us and there’s a lot of science, very unique, a lot of science has to be applied, we’ve offered our services for free to the government on this in return for a joint venture. There’s a lot of science that needs to be applied and if we look at the whole Chimanimani system and that area, we believe that this could give rise to diamond mining at various levels for possibly another 50 to 100 years. It’s a national treasure and we’ve got to look after it. GONDA: Let’s talk a bit about the issue of corruption. You’ve talked about South African crooks being involved and you’ve also talked about one or two individuals in government who have vested interest in this mine. What have you managed to gather in terms of corrupt activities, can you give us some examples? CRANSWICK: Violet this is probably the wrong forum to do this in right this minute. I can tell you that there are a number of people investigating a number of officials in three or four different countries around the world. We are not the only people who are investigating them, we have assisted where we could. We do expect that corruption charges will be laid within the next few months against some senior officials. GONDA: In government?
GONDA: You have been accused by Minister Obert Mpofu of being one white man holding the country to ransom with regards to diamond revenue, what is your reaction to this?
GONDA: Who are these Zimbabweans that are assisting these South African ‘crooks’? CRANSWICK: Well in Canadile for example who are mining illegally against a Supreme Court order in the south of the mineral rights that have been declared by the Courts to be worked by ACR , there is for example a company run by a white man by the name of Jan Swart and he is complicit in the shareholding of this business and he’s benefiting from a crime. There are others as well, there’s Lovemore Kurotwi who’s a director and shareholder in Canadile operation. In the north it seems Dr Robert Mhlanga is helping an illegal operation in the north of the claims and that’s unfortunate. Dr Mhlanga is a war veteran, he’s formerly a highly respected member of the Air Force and it’s unfortunate that he is assisting something like this because we’d expect something different from him. GONDA: And what about Minister Mpofu himself, how is he involved? What do you know about his activities there?
GONDA: And was he the one who gave the licences to these mining companies that are actually working in the Chiadzwa area?
GONDA: And there was a recent article stating that ACR ’s mining rights would once again be cancelled. Is this correct and has the cancellation been effected?
GONDA: So while you say that this matter is still under appeal in the Courts, the website Zimonline reports that the Kimberley Process monitor, or Zimbabwe monitor Abbey Chikane will visit Zimbabwe next week to inspect diamonds being mined and it’s reported that he’s most likely to certify the diamonds especially those that are produced by Mbada Investments - so that they can be sold on the international market. If this actually happens what will it mean to your claim? CRANSWICK: Well it will mean a lot of things and it’s quite a worry that it’s going to be done unilaterally in that manner - if it is going to be done. Now our understanding is the same, we have some information that is not conclusive, that the Kimberley Process will recommend the allowance of that sale. We have warned them in a very polite manner that the danger of that is they’re essentially endorsing and becoming complicit in a crime in Zimbabwe , the crime being contempt of Court because in Zimbabwe , contempt of Court is a criminal offence. The Supreme Court is very, very clear that those diamonds are supposed to be lodged at the Reserve Bank pending the outcome of the appeal. The Supreme Court was also very, very clear that all mining should cease forthwith pending the outcome of the appeal. Now you can’t have diamonds without mining so the growing and the growth of that pile of diamonds which has been ongoing, every three days a helicopter arrives at Harare Airport with more diamonds from site, can only be given rise to by mining and in fact the companies have acknowledged they are mining. So the point is that they are in contempt of Court and there’s a double contempt of Court here and the KPS might be endorsing it. We have had a suggestion made by elements in government which we think is a very credible one and one we endorse and that suggestion is that we do not object to the sale of diamonds, we do not apply to the Kimberley Process or the Supreme Court to freeze this sale, but on the sole suggestion that 100% of the revenue from such a sale must go to government, must go to the fiscus and on that basis - which I think is very fair - we would not object to the sale because essentially we want the government and the people of Zimbabwe to benefit. This is an idea that would satisfy the requirement to bring money into the economy that Zimbabwe and the people of Zimbabwe desperately need, and we’ll endorse that sale without fighting it and agree to that suggestion provided that 100% of the money goes to government, 100% of the sale money must go to government and the sale should be 100% fair and transparent and open to bidders to get the best possible price. In the future when the Supreme Court decides the final ownership of those diamonds then the decided owner as decided by the Supreme Court will be due a credit from government which will be deductible from future taxes or royalties and that’s a very, very fair outcome and if Mbada or anyone else dismisses or rejects that suggestion it shows that they are aware they will never be the owner of the diamonds. GONDA: But isn’t that what usually happens? Doesn’t the revenue actually go to the government? What was happening before?
So if the revenue goes 100% to the fiscus, I’m very satisfied with that and we will not object and we cannot be accused of holding the country to ransom or delaying streamer revenues. But Mbada will object because they’ll say they have costs of mining well they have costs of mining – costs of mining – an illegal mining – costs of illegal, illegality should not be borne by the State of Zimbabwe or by ACR so my attitude is there’s no costs. GONDA: And you said that the ZMDC and MMCZ gave nothing to the government and recently declared a one million dividend to government after three years of operating the Chiadzwa mine, so in your view, how much could Zimbabwe have earned in those years, in the last three years alone? CRANSWICK: Well we would have taken at least another six months to be fully operational so the earliest we would have been operational at a reasonable production would have been June or July 2007 so that gives us just over two and a half years of production and we’d offered a 50/50 JV to government - so 50% of the likely gross production we would have probably grossed a gross of two and a half billion dollars. Let’s say that just over two billion dollars of that would probably have been gross profit, then government would have earned half of that at least, not allowing for extra taxes and so on, so the government’s lost at least a billion dollars over the last three years compared to the one million paid to it by ZMDC. GONDA: And it’s said that corruption is rife in Marange so how do you think the sale of the diamonds will be monitored to ensure that the revenue will go to the State, will go to the government?
GONDA: I was actually going to ask you about the government’s involvement in this, in particular ZANU PF because there are some who believe that the diamonds in Chiadzwa are oiling the ZANU PF machinery. What are your thoughts on this?
GONDA: And this money you mentioned that was donated to the MDC by David Mhlanga and co, was it money from the sale of the illegal diamonds?
GONDA: But he is a person who is heavily involved in this diamond saga. CRANSWICK: Yes unfortunately and hopefully Dr Mhlanga will see Zimbabwe ’s benefit is not being served at the moment and perhaps he will legitimise this. I have great faith that he will do that in the future. GONDA: So are there people in ZANU PF and the MDC leadership who sympathise with you, who actually want to see your company mine that deposit?
GONDA: So in your view, who then is controlling the situation especially when parliamentarians investigating corruption are blocked by police from entering the Chiadzwa area, like what happened last week? Do you have any idea who’s behind this?
GONDA: What about reports saying the Minister of Mines owns a lot of properties, there’s this new casino that he’s building, what are your thoughts on this because there’s a lot of speculation that this could be money coming from the diamonds? CRANSWICK: Well all I’m, I have alluded earlier to different organisations in Zimbabwe, in the region are investigating a number of officials in the flow of money from a number of banks and the number of companies and people to other companies that may be linked to certain officials and the outcome of that money – where it’s being spent and how it is being spent is often very traceable and there’s an on-going investigation that we feel will yield a lot of results. We are not funding the investigation but we are being kept abreast of it and we have assisted with it where we can. So let’s leave it at that until the facts come out and speak for themselves. GONDA: OK. I understand that you have been told to report to the police, that there seems to be an intention to detain you by certain elements of the police force. Why is that?
GONDA: What do you suspect is the motive?
GONDA: What effect does this have, what’s been happening in Marange, have on ACR ’s on-going investment and development programmes in Zimbabwe ?
GONDA: From the feedback from the first interview that we ran last week, a lot of people wanted to know, you mentioned that you have black Zimbabwean investors in your company and they wanted to know who they are. Are you able to tell us at this point in time? CRANSWICK: There’s at least 25 of them including many of the people who work at ACR and I don’t think they’d object to have their names known but unless, until they tell me that, I can’t do that but perhaps what we can do is ask people to write into you, email into you declaring their shareholding, some people have been criticised by elements of government for having shares in ACR . Why I don’t know. Many people have shares in Bindura Nickel or Hwange Colliery or other listed entities like Rio Zim, I don’t know why there’s this fascination with ACR . It’s a public company, anyone can buy shares so we have a number of black shareholders living in London, a number of black shareholders living in South Africa, a number of black shareholders living in Zimbabwe who are shareholders so I’d invite them to write to you and declare their ownership if they wish to. GONDA: OK, and a final word. CRANSWICK: Final word is let’s get on and make Zimbabweans wealthy. We can do it. We’re the richest country in Africa by minerals and all that’s stopping it is corruption and lack of transparency and lack of legality. Let’s get on with it guys, this is pathetic, we’re Zimbabweans, let’s get it working properly. The simple answer is we need Zimbabwe to develop, with our respect for the law and that must apply to all investors whether we call them British or we call them Zimbabwean-based British invested companies – whatever we call them, it doesn’t matter where they come from, we’ve asked for foreign investment, we want the country to develop, let’s respect our own laws. We want to benefit the people and the country, that is the only way to do it – bring in the investors. GONDA: Thank you very much Mr. Andrew Cranswick the CEO of African Consolidated Resources, thank you for speaking on the programme Hot Seat. CRANSWICK: Thank you very much Violet. Feedback can be sent to violet@swradioafrica.com | |
