Zimbabwe diamond industry run mafia style

from the Zimbabwe Independent..

June 21, 2013

THE three-year investigation by the parliamentary portfolio committee on Mines and Energy on the diamond mining industry in Zimbabwe has unearthed shocking revelations with Mines minister Obert Mpofu, conceding the industry is run like “a mafia” globally.

Elias Mambo/Herbert Moyo

The report of the findings presented in parliament last Wednesday has opened a can of worms with disclosures of irregularities that have dogged the industry since the discovery of diamonds in Chiadzwa.

According to the report, during one of its committee meetings, Mpofu “conceded that globally, the diamond industry is run like a mafia, with very few ‘clean’ individuals”.

“Since the inception of formalised mining in Chiadzwa, the committee observed that the sector has been dogged by issues of transparency and accountability in the production, marketing, fiscal contributions and general administration,” reads part of the report.

The report highlights alleged abuse of office by Mpofu, militarisation of the Marange diamond fields, leakages of diamonds and fraudulent partnering processes as some of the problems bedevilling the sector.

“A lot of land in Chiadzwa is still under the protection of the army and inadequate studies have been conducted to ascertain the presence of the diamonds. The committee observed that de-militarisation of Chiadzwa is going to take a long time and it was important that it is done in phases so as to reduce any negative perceptions about Chiadzwa,” states the report.

Subsequent investigations by local and international watchdogs have often raised concerns about the army’s complicity in the plunder of diamonds as well as human rights violations — charges which the Zanu PF side of government has denied on several occasions.

The army involvement in Chiadzwa has for years been raised as a major area of concern, so much so that the demilitarisation of the diamond fields was listed as a key requirement before the country was allowed to resume international trade.

The committee also exposed how the board members were unilaterally appointed by Mpofu.

Mpofu is cited as having acted outside his mandate and unilaterally appointed the board of directors of the Zimbabwe Mining Development Corporation (ZMDC), a move which has seen the state enterprise being manned by individuals with a conflict of interest.

Obey Chimuka, Ashton Ndlovu and Cougan Matanhire, for instance, are some of the appointees who are listed in the report as having a conflict of interest.

“Chimuka used to be a board member of Marange Resources and yet he owned a company which traded in diamonds. Matanhire was a board member of Canadile Miners and yet he had links with Minerals Marketing Corporation of Zimbabwe (MMCZ), while the chairman of Mbada Diamonds was listed in the due diligence report of ZMDC as a shareholder of Liparm, which is part of Reclaim Group, but later crosses the floor, from being on the side of the investor to represent the interests of government,” the report states.

However, the committee observed that if the ZMDC board had been allowed to perform its legal mandate, such kinds of conflicts may have been avoided.

The investigations also opened a Pandora’s Box on how companies to partner ZMDC were chosen without cabinet endorsement.

“The committee observed with dismay that the (Mines) minister and his officials did not want to disclose who selected the joint venture partners, Mbada Diamonds and Canadile Miners.

“They created the impression that the selection process was done by an unknown person or body and this is clearly unacceptable,” reads the report.

“The selection of Reclaim and Core Mining to enter into joint venture partnerships with ZMDC was not done in accordance with any known precedents, procedures or with reference to any legislation in the country.”

Also exposed was how the former ZMDC board chairperson, Gloria Mawarire, tried to mislead the committee into believing that the choice of the two investors was made through a cabinet decision.

The report also states that “the failure to get information on the process used to select the two initial investors was highly frustrating and could not motivate the committee to seek further information on how the rest of the other investors, namely, Anjin and Diamond Mining Company were selected or how future investors would be selected.

Link to the article: http://www.theindependent.co.zw/2013/06/21/zim-diamond-industry-run-mafia-style/

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