CABINET ministers have clashed over the controversial Chiadzwa diamond mining activities and secret sales of gems by state-run agencies which have only given government a paltry US$800 000 despite reaping tens of millions of dollars that cannot be accounted for by the Treasury.
The fight by ministers at a meeting at Munhumutapa Building, Harare, last week brought to the fore the shady diamond mining deals in Marange — from which Treasury could have been prejudiced of millions in hard currency —and accusations of smuggling and theft at the diamond fields.
Last week on Tuesday ministers from Zanu PF and MDC-T fiercely clashed at a meeting over the Chiadzwa diamond deals, leaving government badly fractured and divided over the hotly-contested issue.
Sources close to the meeting said the battle over diamonds mainly pitted Finance minister Tendai Biti against his Mines counterpart Obert Mpofu. The sources said others who joined the fray included Co-Home Affairs minister Giles Mutsekwa and Public Works minister Theresa Makone on Biti’s side. Youth minister Saviour Kasukuwere and his Women’s Affairs counterpart Olivia Muchena joined forces in a bid to rescue Mpofu who was under siege from the firebrand head of the Exchequer.
“So intense was the debate over diamonds that Mpofu was forced to go to the restroom (toilet) at least five times during the course of the meeting,” one source said.
“There was war between the ministers over the diamonds issue,” the source said. “Mpofu was fiercely attacked for failing to explain convincingly what was going on at Chiadzwa. There are all sorts of things happening there such as the corrupt allocation of mining contracts, secret sales of diamonds and the failure to declare proceeds and even smuggling. Mpofu was grilled over all this.”
Sources said Mpofu presented a report on what was happening at the Chiadzwa fields but did not account on many issues which have been bothering ministers for a longtime.
The parliamentary portfolio committee on Mines and Energy has been investigating the goings-on at Marange but was largely frustrated by President Robert Mugabe’s cronies in government.
After Mpofu’s presentation, described by sources as an attempt to whitewash shady happenings at Chiadzwa, other ministers immediately responded, supporting and countering Mpofu.
Sources said Biti grabbed the issue by the scruff of the neck, combating Mpofu at every turn and in the heat of the battle forcing him to leave the meeting at least five times. Biti demanded to know what exactly was going on at Chiadzwa.
“It was an open conflict mainly between Biti and Mpofu. During the proceedings Mpofu left the meeting at least five times going to the toilet,” a source said.
Sources said Biti insisted Mpofu should account for all diamond sales and produce relevant documents on the exports, including CD1 forms. He also wanted to know why cabinet has been kept in the dark and even misled on the diamond mining activities.
Biti’s remarks were in line with the MDC-T’s position on the Chiadzwa diamonds. The MDC-T has complained of “lack of transparency and due process in the handling of diamonds at Chiadzwa and in the granting of concessions and mining rights”. It has also said that the “concessions and mining rights in Chiadzwa should be granted on the principle of transparency and openness involving public auctioning or public tender processes carried out by an independent authority”.
The MDC-T has demanded that “all income from Chiadzwa should be accounted for transparently to the State to enable the same to attend to capital and recurrent expenditure and in particular the adequate remuneration of civil servants”.
However, Zanu PF central committee member and former Information minister Jonathan Moyo yesterday hit back at the MDC-T, saying their position was either “malicious or ignorant”. He accused the party of “peddling falsehoods about Chiadzwa diamonds”.
“The persistent but false allegations claiming lack of transparency in the allocation of Chiadzwa mining concessions are coming from people who are either malicious or ignorant, or both,” Moyo said.
The former Zanu PF politburo member said Chiadzwa mining claims legally belonged to the Zimbabwe Mining Development Corporation (ZMDC).
“The record will show that between December 2006 and January 2007 the government openly and in terms of relevant laws allocated to ZMDC seven special grants covering the whole of Marange measuring about 129 000 hectares. Relevant issues of transparency as to who owns what area ended with this fact which was gazetted,” he said.
“Thereafter it has been entirely up to ZMDC to decide whether to mine in Marange alone or in partnership with entities of their choice. Its pure madness to demand ZMDC must make its business decisions in public or even use tenders in the false name of transparency. ZMDC is a business and no business anywhere in the world does that. Ask Coca Cola, Microsoft or De Beers.”
The state-owned ZMDC is working with Mbada Diamonds and Canadile Miners (Pvt) Ltd in joint-venture partnerships hurriedly formed and given licences without going through transparent procedures last year. Mbada and Canadile signed Memorandums of Agreement in July and final agreements in October last year before they started minting.
Between May 2007 and April 2010, government sold diamonds to Belgium, South Africa and mostly Dubai, United Arab Emirates, but the fiscus did not get anything to talk about. Documents in possession of the Independent show that diamonds mainly to Dubai were sold illegally through shelf companies and deposited into ABC Bank and CBZ Bank accounts via telegraphic money transfers through American Express Bank Ltd and Standard Chartered Bank in New York.
Government has been selling diamonds from May 20 2007 to April 22, 2010 through the Zimbabwe Mining Development Corporation (ZMDC), Minerals Mining Marketing Corporation of Zimbabwe (MMCZ) and ZMDC subsidiaries such as Sandawana Mines (Pvt) Ltd and other entities like Lesley Faye Jewellers, which trades as Premier Diamonds, but no one knows where the money is going,” an informed diamond mining source said.
Sources say those in diamond mining are creaming off through under-invoicing like labelling gems and diamonds, fraudulent evaluation and even blatant activities like exchanging roughs diamonds for gems during the process of exporting.“There are even fears that more than four million carats stockpiled could also be sold in a fraudulent manner. That is why ministers are fighting over this issue,” the source said.
Government says it has built up stocks of 4 580 234 88 carats of diamonds awaiting to be sold if the Kimberley Process Certification Scheme (KPCS) gives the go ahead. KPCS monitor Abbey Chikane has in his latest report on Chiadzwa signalled Zimbabwe could soon be allowed to trade after it was barred from doing so due to smuggling and human rights abuses.
Human rights groups, including the New York-based Human Rights Watch, London-based environmental watchdog Global Witness and local diamond overseer Centre for Research and Development (CRD) in Zimbabwe have accused Zimbabwean security forces, mainly the military, of widespread abuses and killings at the Chiadzwa diamond fields. CRD director Farai Maguwu was arrested for telling Chikane about human rights abuses and smuggling.
Due to human rights abuses perpetrated at the diamonds fields, civic groups have labelled Zimbabwe’s gems “blood diamonds”.