THE Zimbabwe Independent, which has over the years been investigating the goings-on at Marange diamond fields, carries the sixth instalment of the latest Global Witness report Financing A Parallel Government? which makes interesting revelations about Chiadzwa.
In this article Global Witness confronts Anjin over allegations that it is part-owned by the military, funds the security sector and has failed to pay taxes, among other issues.The report by the UK-based non-governmental organisation which campaigns against natural resources-related conflict, corruption and associated environmental and human rights abuses sheds light on activities unfolding at Marange diamond fields.
It is possible, just, that Matt Bronze is a genuine mining company which owns half of Anjin. It is also possible that Brigadier General Tarumbwa owns half of Anjin’s shares in a personal capacity, or on behalf of well-connected individuals. However, Global Witness believes that it is more likely that Matt Bronze is a front for the military and police as corporate entities.
Factors such as Tarumbwa’s formal role as a senior law officer at the Ministry of Defence, the involvement of Tarumbwa and the former Permanent Secretary of the Ministry of Defence in the incorporation of Russzim, the presence of the current permanent secretary on Anjin’s executive board, and the possible role of Defence minister Emmerson Mnangagwa in granting the mining licence, lead us to conclude that Anjin is likely to be part-owned and part-controlled by the Zimbabwean military, police and Ministry of Defence.
This claim is denied by Anjin who wrote to us: “Anjin Investments (Pvt) Ltd has never been controlled by Zimbabwean military or police. It is AFECC and Matt Bronze (Pvt) Ltd that benefits from Anjin Investments (Pvt) Ltd.”
Global Witness wrote to Anjin Investments asking for their response to claims that they provide money to the Ministry of Defence, military and police. They denied the allegation and wrote, “Such a phenomenon has never been found during the operation of Anjin Investments (Pvt) Ltd.”
When confronted with the statement that the Ministry of Defence, military and police are the real beneficial owners of Matt Bronze they replied: “As for how the government related company Matt Bronze (Pvt) Ltd distributes its benefits, Chinese side knows nothing at all.”
In Zimbabwe’s 2012 national budget the MDC-controlled Ministry of Finance set out expenditure totalling US$3,4 billion, and specified additional spending that would occur only if Treasury received US$600 million from diamond revenues promised by the Zanu PF-controlled Ministry of Mines.
However, to date diamond revenues have yielded little. In May Finance minister Tendai Biti said Treasury had only received US$30,4 million from diamond companies for the period January 1 to March 21 2012, and that Anjin had paid nothing to Treasury since it began trading.
Said Biti: “We have not received a single cent from Anjin, yet Anjin is seven times bigger than some of the other (diamond) companies. Clearly, we fear as the Ministry of Finance that there might be a parallel government somewhere in respect of where these revenues are going, and are not coming to us. There is opaqueness and unaccountability surrounding our diamonds.”
Global Witness put this complaint to Anjin Investments. They responded that the allegation was “pure rumour” and provided copies of payment vouchers to Global Witness. The vouchers indicated Anjin conducted four sales between February and May 2012 totalling US$93,2 million, and used those revenues to pay US$14,9 million in royalties and commissions to the Minerals Marketing Corporation of Zimbabwe (MMCZ) and US$2,7 million in resource depletion fees to the Zimbabwe Minerals Development Corporation (ZMDC). There was no indication that any taxes had yet been paid to the Zimbabwe Revenue Authority.
It may be that the MMCZ or ZMDC have not yet passed on proceeds to Treasury. It is possible that early revenues are being used to recoup significant capital expenditures incurred by Anjin, said by Kimberley Process monitors to be US$380m by late 2011. However, it is clear that, while payments have been made to the MMCZ and ZMDC, the claim that Anjin has not yet paid any taxes to the Ministry of Finance is plausible.
Kimberley Process monitors have noted that at present five independent processing plants are in operation at Anjin, with a further two plants under construction. Rapaport research, an industry analyst, reported that “the concession owned by Anjin has production of 750 000 carats a month that is expected to rise to approximately 1,2 million carats a month after the implementation of two new processing units”. A director of Anjin is reported to have claimed that it is now the world’s largest diamond company:
“We are now the largest diamond company in the world and this has been confirmed by KPC (Kimberly Process Certification Scheme). We are the largest diamond mining company in the world because we have surpassed the KPC minimum requirements. We are the largest in terms of the size of our area of operation and the amount of ore we are capable of processing every day. We are also large in terms of the field, we have got the largest deposits in the world.”
Global Witness initially dismissed such claims as bombastic, but one informed industry observer has told us that, in terms of size, Anjin could be “the next De Beers”. If we are right in our analysis, then the Zimbabwean military, police and Ministry of Defence part-own and part-control half of a large and potentially very profitable diamond company.
Global Witness believes that the activities of Anjin Investments (Pvt) Ltd should be investigated by relevant authorities to see if their actions undermine Zimbabwean democratic institutions or risk funding future human rights abuses and therefore meet the threshold for being placed on targeted sanctions lists.
Biti’s allegation that “there might be a parallel government somewhere in respect of where these revenues are going” is a serious accusation, with profound consequences for Zimbabwe’s Government of National Unity. Sadc plays an active role in mediating the political process in Zimbabwe. Sadc facilitators should give the problem of off-budget financing of security forces a high priority in forthcoming negotiations, with the aim of securing democratic, civilian control over the budgets for the security services. It may also be necessary for Sadc to appoint an expert panel to investigate these claims.
— To be continued next week.