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Mpofu diamond corruption exposed

PARLIAMENT has once again raised the red flag over the manner in which the country’s diamonds are being extracted in Chiadzwa with the latest report by the legislature condemning Mines Minister Obert Mpofu for breaching the country’s laws.

Mines Minister Obert Mpofu (centre) is a man of significant means
Mines Minister Obert Mpofu during the final session of the Kimberley Process Plenary in Jerusalem

In a damning report by the Parliamentary Portfolio Committee on Mines, the Mines Minister came under attack for appointing people with conflicted interests to subsidiary companies under the State-owned Zimbabwe Mining Development Corporation (ZMDC), which has a shareholding in all the companies operating in the controversial Chiadzwa diamond fields.

Most importantly, the committee chaired by the late ZANU-PF Guruve South lawmaker, Edward Chindori-Chininga, noted that the board appointments were in violation of the ZMDC Act. It was also noted that despite its octopus-like shareholding in diamond mining companies in Manicaland in which government has a 50 percent interest across the board, ZMDC was not actively involved in their affairs.

The findings were tabled before the House of Assembly recently following extensive investigations by members of the Portfolio Committee on Mines between 2010 and this year.

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The report took long to see the light of day due to the turf war between the Executive and the legislature over access to information and entry into the Chiadzwa diamond fields by the lawmakers.

Even though the committee had intended to visit the diamond fields in 2010, it was twice denied entry due to the contestation for power between the two arms of State. Permission was only granted two years later.

But more headaches were to follow as Members of Parliament were blocked from conducting public hearings with communities around the mining operations on grounds that it was inappropriate security-wise to do so.

The report said Mbada Diamonds and Diamond Mining Company (DMC), two of the major mining companies in Chiadzwa, were hostile towards MPs during their visit.

The two firms were said to have capitulated only after Section 9 of the Privileges, Immunities and Powers of Parliament Act was invoked. This paved the way for the police to deliver summons compelling them to appear before the MPs for a hearing .

The committee also observed what appeared to be unhelpful influence from the Mines Ministry meant to discourage Mbada Diamonds and the then delisted Canadile from appearing before Parliament in 2010.

While Marange Resources and Anjin cooperated with the legislators, the committee noted with concern that Mpofu and his ministry officials were reluctant to be held accountable by Parliament. The report also questioned the manner and type of people appointed to serve on ZMDC’s subsidiary companies.

“These were the observations of the committee: (a) Board appointments to ZMDC’s subsidiary companies were being made by the Minister of Mines, in clear violation of section 5 (2) of the ZMDC Act,” reads part of the report.

“Due to the unilateral appointments to the subsidiary companies by the minister, certain individuals with a conflict of interest were appointed. The following people; Obey Chimuka, Ashton Ndlovu, Cougan Matanhire and Dr. Mhlanga had a conflict of interest. Dr Obey Chimuka used to be a board member of Marange Resources and yet he owned a company which traded in diamonds. Mr. Matanhire was a board member of Canadile Miners and yet he had links with MMCZ.”

In a ZMDC due diligence report, Mhlanga was listed as a shareholder of Liparm, which is part of Reclaim Group but later crossed the floor from being on the side of the investor to represent the interests of government.

Members of the committee claimed that ZMDC board chairperson, Goodwills Masimirembwa confirmed to the committee in 2012 that the parastatal was not involved in the day to day running of most of its subsidiary companies in which government has shares but believed that the information they were given by those running the units was correct.

On a field visit to Marange during the same year, MPs observed that ZMDC was more active in wholly-owned Marange Resources while in Anjin, Mbada and DMC, it behaved more like a bystander and yet government has a 50 percent shareholding.

It said many Chiadzwa communities were being relocated without proper resettlement plans, putting villagers in danger of losing their livelihood, especially access to fertile land.

“The committee was informed that about 4 300 families will have to be relocated from Chiadzwa and about 1 800 will be relocated to Arda Transau near Mutare. Since 2010, a total of 693 families have been relocated,” reads part of the report.

“The committee was also informed by the Provincial Administrator for Manicaland (Fungai Mbetsa) that the mining companies were not willing to co-operate in the construction of an irrigation project at Arda Transau so as to build stable and sustainable livelihoods for the communities. The committee would like to implore the mining companies to re-consider their positions and build an irrigation scheme for the community.”

The report follows another separate account by the Parliamentary Legal Committee that casts another broadside at the regulations enacted by Mpofu recently which it said were unconstitutional and must be repealed.

The regulations set mining fees under several categories namely application fees, special licence fees, registration fees and export permit fees among others. These fees were non-refundable even if one’s application had been turned down.

The fee structure set registration of ordinary platinum blocks, for example, at a whooping US$2,5 million while application fees for diamonds claims were pegged at US$1 million. The Financial Gazette