HomeLocal NewsMbada Diamonds drowns in debt

Mbada Diamonds drowns in debt

MBADA Diamonds (Private) Limited, previously the largest producer of gems in the troubled Chiadzwa diamond fields, is drowning in massive debts accrued during its ill-fated mining stint.

By Obey Manayiti/Elias Mambo

 Mbada Diamonds is contesting the government’s decision in court, arguing it has been financially paralysed, failing to pay a long list of service providers.

Mbada Diamonds is contesting the government’s decision in court, arguing it has been financially paralysed, failing to pay a long list of service providers.

The company’s mining licence was withdrawn alongside those of other firms when the government forcibly tried to merge the companies into the Zimbabwe Consolidated Diamond Company (ZCDC) in February last year.

Although Mbada is contesting the government’s decision in court, it has been financially paralysed, failing to pay millions to service providers.

As a result, Mbada Diamonds’ assets have been attached and auctioned over the debts.

In a bid to have a united voice, more than 200 creditors came together to push for the recovery of their money from the mining firm. Although their spirited bid reveals a combined US$35 million debt, the cumulative debt is said to be over US$200 million, a figure Mbada denies.

The biggest creditor is Pungwe Mining Company, owed US$18 612 510. The company specialises in mining equipment and has been fighting vigorously to recover its money.

Pungwe Mining Company has auctioned Mbada Diamonds’ plane that was used to transport diamonds from the mine in Chiadzwa to the sorting house at Harare Airport.

The 12-seater Cessna 208 Caravan has since been bought by businessman and Zanu PF legislator for Bindura North Kenneth Musanhi for nearly US$1 million.

Apart from the aircraft, the company has lost heavy mining machinery which includes earth-moving and mining equipment with specialised technology. Some of the equipment is now being used to recapitalise the struggling ZCDC.

Mbada Diamonds has also lost an assortment of top-of-the-range vehicles, including Mercedes-Benz, Land Cruiser, Ford Ranger, among other models, due to the hefty debt. Some of the vehicles have already been auctioned.

Besides big and expensive items, Mbada Diamonds has also lost office furniture, office equipment, household furniture and other mining equipment.

Other creditors include Gecko Operational-Rand (owed US$2 220 874), Friendly Environmental Services (US$1 498 280), Zinwa (US$1 436 202), Odzi Sub-catchment Council (US$41 640), Chimanimani Rural District Council (US$25 000), while Warman Zimbabwe is owed US$697 285.

The company also owes ZRP US$266 100, Zesa (US$437 679), Econet (US$198 933), TelOne (US$19 685), Environmental Management Agency (Ema) US$99 330, Sakunda Energy (US$75 160), Petrotrade (US$30 453) and Crest Hospitality (US$57 338).

David Kassel, a powerful Mbada director, said in an interview his company had accumulated huge debts, but doubted claims they could now be up to US$200 million.

“If you have no revenue, obviously you can’t pay your creditors or obligations,” he said. “We have liabilities running up to US$200 million?; I’m not aware of that. Certainly we came under pressure to pay creditors after closure, but US$200 million is an interesting story. It’s not reflected in our accounts. Yes US$35 million is possible, but I would like to see the US$18 million claim by Pungwe Mining. If we owed diamond teurs (investors) about US$14 million, where do all these other bigger figures come from?”

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