Who controls revenue from Marange diamonds?
A case study of Mbada and Anjin companies
By Global Witness
Executive Summary
In 2008 the Zimbabwean army took control of the Marange diamond fields using troops and helicopter gunships, killing and wounding many small scale miners in the process. Since then diamond mining concessions have been allocated to several companies in questionable circumstances.
Anjin and Mbada are two such companies. Anjin claims to be the world’s biggest diamond company. It is a joint venture between an obscure Zimbabwean firm called Matt Bronze and a Chinese construction company. Mbada is a joint venture between a South African scrap metal company and the state-owned Zimbabwe Minerals Development Corporation.
Anjin’s Zimbabwean board members include senior serving and retired military and police officers, and the Permanent Secretary at the Ministry of Defence. Control by the military and police over a major diamond mining company creates opportunities for offbudget funding of the security sector. There is a real risk of these revenues being used to finance violence during a future election.
In the last financial year 25% of Mbada was passed to a third party, Transfrontier, which has an opaque company structure based in secrecy jurisdictions and tax havens. The beneficial owners of Transfrontier are unknown.
However the firm is named as a ‘sister company’ by a South African firm, Liparm Corporation, whose sole director is former Air Vice Marshal Robert Mhlanga, who is also the chair of Mbada. Mr. Mhlanga was a prosecution witness in the 2003 treason trial of then MDC opposition leader Morgan Tsvangarai.
Mhlanga is reported to have been Chief of Staff Operations at the National Command Centre which controlled the announcement of poll results in the disputed 2002 presidential election.
The presence of Mbada, Transfrontier and associated companies in countries with zero rates of corporation tax such as Mauritius, Hong Kong, British Virgin Islands and Dubai in the United Arab Emirates, raises the questions of where these companies pay their taxes and whether these arrangements are a good deal for Zimbabwe.
Complex legal structures and secrecy jurisdictions can be used to hide who benefits from natural resources. Such secrecy is inappropriate for national assets and has the potential to conceal corruption, tax avoidance or off budget government spending.
Global Witness has repeatedly called for transparency over the ownership of concessions, such as those controlled by Mbada. Revenues from the Marange diamond fields represent a potentially large windfall to support development in Zimbabwe. The country’s citizens have a right to know how these revenues are managed. See the full report by Global Witness
Key Recommendations
Zimbabwe’s Government of National Unity (GNU) should pass legislation banning serving members of security services from control over, or beneficial ownership of, mining companies.
The GNU should immediately review all contracts in the Marange diamond fields, and audit concession allocation procedures and operations conducted so far, to see whether they represent a good deal for Zimbabwe.
Mbada and Anjin should publish details of their ultimate beneficial owners, and those of related companies such as Transfrontier and Matt Bronze.
Global Witness is an international NGO established in 1993 that works to break the links between natural resource exploitation, conflict, poverty, corruption, and human rights abuses worldwide.
