Zimbabwean President Robert Mugabe got the
world jawing angrily in early March this year. He used his traditional
birthday interview with state television to reveal that his country had
produced diamonds worth more than $15 billion over six years, yet only
about $2 billion of the gems had been accounted for (https://soundcloud.com/zimpapers1980/president-interviewwav).
He dumped the stinking carcass at
the doorstep of the eight mining companies that had been operating in
the sprawling diamond fields of rural Marange in eastern Zimbabwe and
claimed he had no clue how the leakages happened.
That way, the 92-year-old statesman
who has been in power for 36 years skirted, quite conveniently, the
role played by the ruling elite in the leakages.
Illegal miners
The common tale is that diamonds
were discovered in Marange in 2006. Thousands of poor illegal miners
swamped the area and fed local and international underground syndicates
with the gems until 2008 when the governments sent in soldiers to
violently flush out the hungry alluvial gem miners. That paved the way
for commercial production that commenced on a low note in 2009.
By 2015, a total of eight companies were extracting the diamonds, with most of them in joint ventures with the government.
The discovery of diamonds in the
area dates far earlier than the gem rush in 2006, though. De Beers, the
world's largest diamond company, held an Exclusive Prospecting Order
(EPO) over Marange from the early 1980s via a subsidiary, Kimberly
Searches Ltd.
The order expired in 2006 and the
British-registered African Consolidated Resources (ACR) took over the
exploration rights. ACR challenged government's subsequent takeover of
the mining rights and initially won through a high court order but the
same court reversed its decision in September 2010.
A parliamentary committee on
mining, headed by Edward Chindori-Chininga, the late legislator from the
ruling Zanu-PF, estimated in a June 2013 report that Zimbabwe had the
capacity to supply 25 per cent of the global market from Marange and a
couple of mines elsewhere.
Repeated concerns
However, there were repeated
concerns from civil society, opposition politicians, international
watchdogs and some government officials that not much was coming out of
the gem fields, amidst widespread reports that the diamonds were being
systematically carted out of the country to various destinations.
By 2014, alluvial diamond deposits
were running ultra-thin, meaning that extraction had to go deeper in
search of conglomerates, but the mining companies were ill-prepared for
the tech-intensive development.
Late last year, the government
expressed dismay at the "mysterious" losses of diamonds. It announced
that it would be stopping the mining companies so as to form a
consolidated outfit that it is now spearheading.
Zimbabwe has nothing to show for
six years of the multi-billion commercial diamond mining that attracted
mostly negative international attention for human rights abuses at the
gem fields and a looting frenzy by Mafia-type syndicates.
The signature of the ruling elite
looms large in the leakages. Senior government officials and their
allies closely linked to diamond extraction, tellingly, amassed
overnight riches whose sources have remained a mystery.
Obert Mpofu was the Mines and
Mining Development minister between 2009, when commercial mining
commenced, and late 2013 when President Mugabe shifted him to the
transport portfolio in a Cabinet reshuffle. He had been in business for a
long time, but his profile was modest until he landed the Mines
ministry.
His high value investments
subsequently straddled transport, banking, tourism, properties, mining,
ranching and the media. At one time, he was rumoured to own half of the
world-famous resort town of Victoria Falls.
Mpofu's empire started crumbling when he was moved from the Mines ministry. The Zimbabwe Mail
newspaper he jointly owned with Robert Mhlanga, a former senior
Airforce of Zimbabwe officer who chaired the board of Mbada Diamonds,
one of the leading mining companies, collapsed when Mpofu left the Mines
ministry. So did Allied Bank which he had bought during his tenure at
the ministry.
The minister insists his hands are
clean and claims he built his wealth from a golden handshake he got when
he left a Zanu-PF-owned company, Treggers, in the late 1980s.
His tale has not convinced many.
Sceptics include former Finance minister under the 2009-2013 Government
of National Unity (GNU), Tendai Biti, who now leads the People's
Democratic Party (PDP). "Obert Mpofu has a lot to explain to Zimbabwe
and the world over how he handled our diamonds. He must be brought
before an independent commission of inquiry," Biti told the Africa Review.
He is bitter that President Mugabe
protected Mpofu from Cabinet scrutiny during his tenure at the Mines
ministry. Biti accused Mpofu of barring him from directly engaging with
the mines following poor receipts into Treasury, repeatedly forcing him
to revise national budgets downward.
Mpofu, 66, illegally appointed or
influenced the appointment of most of the people to represent government
stakes in various companies involved in Marange diamond production and
marketing, according to a parliamentary study that was headed by
Chindori-Chininga. The legislator, a former Mines minister, came from
Zanu-PF and died in a mysterious car crash months after the release of
the damning report in June 2013.
The report is brazen in its
condemnation of Mpofu who signed himself off as Mugabe's "Ever Obedient
Son". "Board appointments…were being done by the Minister of Mines in
clear violation of Section 5(2) of the ZMDC Act… Due to the unilateral
appointments by the minister, certain individuals with a conflict of
interest were appointed."
They held shares
Four key individuals with Zanu-PF
links are named. They must have been disqualified from sitting on boards
of the companies because they held shares in some of the diamond firms.
Robert Mhlanga is a name that
sticks out prominently. Mhlanga, who was the chairperson of Mbada
Diamonds, was a shareholder in Liparm, a subsidiary of the giant mining
company that the Chindori-Chininga report said was arrogant and
untouchable.
Besides jointly owning the Zimbabwe Mail
with Mpofu, he shared more than his first name with the Zimbabwean
president. He is a former Air Vice-Marshal in the Airforce of Zimbabwe
(AFZ) and was Mugabe's helicopter pilot for a long time.
Uncorroborated reports claimed he
represented Mugabe's business interests and the president was the one
who directly ordered his appointment as Mbada chair. He was also
implicated in a 2002 sting operation against Morgan Tsvangirai, the MDC
president, who was then accused of treason for allegedly plotting to
"exterminate Mugabe" but the opposition leader was subsequently
acquitted.
Played key roles
Mhlanga made big news when he
acquired prime real estate on the Durban north coast and Sandton in
Johannesburg, South Africa. South African media reported in mid-2012
that Mhlanga had bought a $24.5 million mansion in Kwa-Zulu Natal,
'complete with two man-made lakes, bullet proof windows, a helipad and
an underground bunker beneath a security building". Some said the
mansion would be Mugabe's get-away or retirement home but no proof has
been provided yet.
Deeds records in South Africa show
that, in one day in January 2011, Mhlanga bought three properties worth
$7.4 million in Durban and Sandton and purchased more properties
elsewhere, sometimes at above-market prices.
Other officials associated with Mpofu played key roles in the diamond industry.
Goodwills Masimirembwa was the
chairperson of ZMDC, the government arm tasked with overall diamond
production as well as the establishment of mergers, and which had 50 per
cent ownership in most of the mining firms. Masimirembwa has been
following Mpofu wherever he goes.
Prior to his ZMDC appointment, he
was the chairperson of a pricing commission that fell under the ministry
of Industry and Trade that Mpofu headed. When Mpofu was moved to the
transport portfolio, Masimiremembwa resurfaced as the chair of CMED, a
government parastatal under the ministry, but he was fired when his
godfather was last year moved to Macro-Economic Planning and Investment.
President Mugabe in 2014 publicly
accused Masimirembwa of soliciting $10 million bribe from would-be
diamond investors, but the President later swallowed his own accusation.
Mpofu declined to comment when contacted by the Africa Review.
"I am not commenting on this because I am no longer the minister of Mines," he said.
Mr Mhlanga and Mr Masimirembwa did not respond to several requests for comment.
Political bigwigs
There is official confirmation of
the role played by political bigwigs in protecting local and
international illegal diamond dealers. The current Mines and Mining
Development minister, Walter Chidhakwa, in March toured Manicaland
Province where Marange is located and had no kind words for the senior
politicians.
"We want to see the politicians who protected them (the syndicates) to loot this country," said Chidhakwa.
There are also anecdotes that point
an angry finger at army generals who could have taken advantage of
murky shareholding at one of the big mining companies, Anjin
Investments.
ZMDC insists a Chinese company,
Anhui, owned 50 per cent of Anjin, while the corporation had 10 per cent
and government 40 per cent.
Security sector
It has never been explained which
part of government owned the 40 per cent and why that was so, given the
fact that ZMDC is a government unit, but observers say the share
belonged to the security sector. Anhui is, in fact, thought to be a
proxy of the Chinese military.
The secret ownership by the
Zimbabwean security sector is believed to have given generals the chance
to divert proceeds from Marange for personal gain and funding of covert
military and intelligence operations.
Indeed, several shadowy projects
were set up in the run-up to the 2013 general elections and these were
funded from diamond proceeds.
A Zanu-PF propaganda newspaper, The Patriot,
for instance, bought numerous new vehicles during this period and paid
its staff well despite having low circulation and failing to attract
advertising.
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