…as diamond consolidation nears end
Taurai Mangudhla and Tinashe Makichi
Mbada Diamonds’ protracted fight to regain full control of its diamond-rich claims and equipment at Chiadzwa rages on with indications that the company’s investors Grandwell Holdings are demanding Zimbabwe Consolidate Diamond Company to vacate its premises.
July 3, 2018 documents gleaned by the Business Times show that Mbada Diamonds shareholders Grandwell Holdings, through their lawyers Scanlen & Holderness, wrote to ZCDC seeking to stop extraction of ore at its claims by mid-day yesterday.
Scanlen & Holderness’s move is based on previous judgments delivered in their favour at the courts.
Government sources say Mbada Diamonds is trying to whip emotions in its favour as a Diamond Policy is being finalised. The company is apparently seeking to preserve its assets while legal and political processes take effect.
Scanlen Holderness top lawyer Stanford Moyo is representing Mbada Diamonds. However, Moyo yesterday distanced himself from the case saying it was being handled by another lawyer. Moyo referred this publication to Scanlan and Holderness saying someone was now in charge of the case.
Investigations by the Business Times show Moyo is in fact representing Mbada Diamonds with his signature on a July 3 letter to ZCDC on behalf of Mbada.
ZCDC CEO Dr Morris Mpofu said his company was acting within the confines of the law.
“We are a law abiding citizen and we are acting within the rights of our special grant which stands,” Dr Mpofu said in a brief comment yesterday.
Mbada was booted out of its claims in March 2015 on implementation of a controversial consolidation of seven mines- Anjin, Diamond Mining Company, Jinan, Mbada Diamonds, Gye-Nyame, Kusena and Marange Resources- that operated in the Chiadzwa area.
Anjin has also regained access to its land and plant in Chiadzwa.
Close sources say Anjin has been operating on grounds of care and maintenance, pending discussions for a mutually beneficial agreement with Government and legal battles around the consolidation and subsequent booting out of companies from their claims and production plants.
The sources say the care and maintenance is the first stage in a process expected to see the company regain its assets.
Anjin spokesperson Munyaradzi Machacha confirmed the company had been given access to equipment for care and maintenance.
“I am not aware about intentions for Anjin to start operating, but we did start care and maintenance of equipment to retain value of our assets because the equipment was down for years and rusting,” Machacha said.
The 2015 consolidation exercise went through, under the then leadership of Mines Minister Walter Chidhakwa who is believed to have been a key member of the ousted Zanu PF G40 cabal, on claims of intending to sanitise the industry by way of bringing transparency and accountability amid claims of looting and pilferage of the precious stones through well-knit syndicates.
But, close sources say it was instead a politically motivated decision targeting the army, top army personal and politicians who were perceived to be supporting the ascendency of President Emmerson Mnangagwa to take over from Robert Mugabe.
This, they say, was meant to cut financial streams rather than bring benefits to the economy.
“If anything, there is now more chaos under the ZCDC, many lost their jobs, there was a lot of interference from the Minister (Walter Chidhakwa) and his permanent secretary (Francis Gudyanga) in the hiring of staff at ZCDC,” said a source who requested not to be named.
Chidhakwa and Gudyanga were fired by President Mnangagwa and have been dragged to court on charges of corruption and abuse of office.
“Consolidation was not a terrible idea if it was done properly with mines getting compensation and or shareholding in the new mine and expanding the project instead of laying off workers and treating dumps.
“It was folly to kick out companies that had claims and invested in the area without compensation. It was just the same as land grabbing and affected investor confidence,” added the source.
Information at hand suggest that the current administration, led by President Mnangagwa has taken a pro-business and pro-economy approach which prioritizes international re-engagement, rule of law and creating an enabling environment for production.
As such, President Mnangagwa’s office has been seized with restructuring the diamond industry and open to bringing back the companies that used to mine in Marange, but under new terms and conditions that foster transparency.
Investors in the diamond sector that used to operate at Chiadzwa welcomed the stance by President Mnangagwa’s administration.
“The new regime is different from the old one in that it is open to dialogue with investors who invested millions into mining ventures. Whatever the outcome, whether we are reassigned to mine in a different area or compensated.
President Mnangagwa is on record last month saying a new Diamond Policy will be introduced in August to regulate, guide operations and marketing of the precious stones.
However, the kingpins in the local diamond industry have been fighting hard to maintain control of the lucrative industry, playing all sorts of games including misleading Mines Minister Winston Chitando and throwing spanners to scuttle development and implementation of a new diamond mining model.
An intelligence report earlier this year revealed that diamond leakages are still a problem, raising a red flag amid serious allegations some top managers and politicians connived with buyers to manipulate prices. A diamond deal to process and market Zimbabweans stones in Botswana being pushed by ZCDC has also been at the centre of debate with information it was oversold and will benefit a few individuals.
The Botswana deal was allegedly structured with the heavy involvement of Minerals Marketing Corporation of Zimbabwe’s Israeli consultant Raphael Bitterman and involves individual who are heavily conflicted.
ZCDC publicly dismissed the allegations as baseless.
However, a leaked MMCZ internal report in our possession for the country’s January diamond tender has exposed variances averaging 319 percent and as much as 6 389 percent between the ZCDC reserve prices for its diamond parcels and the market bids.
This left questions around competence of ZCDC’s diamond valuators and added to .indications of possible salting away of revenues at the diamond miner.
For the January/February 2018 tender, the MMDC report shows that ZCDC expected to fetch $54,4 million at an average reserve price of $85,61 per carat, but instead, the highest bids on all eleven parcels could only amount to $17 million at an average price of $26,80 per carat.
