28 April 2014

Zimbabwe: Govt Orders Audit Into Diamond Mining Firms, Arrests Looming

Photo: Denford Magora
The reddish-coloured diamonds of Marange in Zimbabwe.

IT never rains but pours for the diamond mining firms in Marange.

This is after government has followed up its plans to eject them from the mining area with an order to have them audited for possible financial impropriety during the few years they have spent exploiting the precious mineral, it has emerged.

Government entered a 50-50 venture with the companies and has been getting far less than expected from most of the firms.

Looming arrests also await the companies' top managers found to have deliberately prejudiced government of its dues.

Government said this month it wants to remain with one or two companies mining the gem in Chiadzwa after the more than half dozens firms extracting the precious mineral have failed to satisfactorily account for what they get in the area.

But as fate would have it, the beleaguered firms will not just leave end of this year without scrutiny.

Mines and Mining Development Minister, Walter Chidhakwa said Monday the dishonest companies will face the music.

"We will pursue matters where deliberate actions of misconduct and abuse will have been committed," Chidhakwa during the inauguration of the ZMDC board, appointed last month.

"One of the things that the board must do is to look at financial statements, get financial accounts audited, see whether there were no areas of abuse.

"I am happy the chairman has said to me that they will tell us as bluntly as it is so that we know who has abused in the past so we are able to take action."

To show the amount of disdain for authority by some of the companies, it has emerged that one of the seven firms mining for diamonds in Chiadzwa, Gye Nyame, still went on with its operations even after government had revoked its licence for failure to perform.

Government has had a surprise fall-out with diamond mining firms in the diamond rich Marange area after only a pittance from the mining proceeds has found its way into government coffers with the remainder largely unaccounted for.

Matters came to a head when the companies all but refused to disburse the compulsory $10 million each towards the Marange-Zimunya community ownership trust, an embarrassment to President Robert Mugabe who officiated at the launch of the scheme.

Chidhakwa admitted government was desperate for money from the diamond mining activities in the east and further urged the newly appointed ZMDC board to resist temptation by ensuring every cent due to the government flows into treasury.

"I want to say it from the beginning that your shareholder does not have financial resources," he said.

"All we have is the support that we can give you to ensure that you leverage - that you think of ways of raising resources whether it be raising resources through joint venture partners, through loans and credit so that you provide money to the various institutions."

The new ZMDC board is chaired by Bindura Nickel Corporation managing director and former Mines secretary Mr David Murangari who is deputised by Fidelity board chairman and former RBZ deputy governor Mr Edward Mashiringwani.

The other board members are Mr Patridge Sibanda, Dr Farai Karonga, Mr Luke Akino, Mr Chris Chitambara, former Transport deputy minister Mr Zenzo Nsimbi, a director in the ministry Mr Titus Nyatsanga and Ms Esther Maravanyika.

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