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  • Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles

  • Chiadzwa mining: a tale of shady deals and characters
    Dumisani Muleya, Zimbabwe Independent
    March 19, 2010

    The Chiadzwa diamond mining saga has complex plots and sub-plots. It involves a chain of companies and individuals with a shady past and whose records are difficult to trace, in some cases for that reason. The issue has its genesis in 2002 when South African diamond mining giant De Beers' subsidiary, Kimberlitic Searches (Pvt) Ltd, was granted a four-year Exclusive Prospecting Order (EPO) in Chiadzwa. The EPO expired on March 28 2006.

    Then ACR, which is registered in the United Kingdom and listed on the London Stock Exchange, applied for the prospecting licence and got the authority.

    It proceeded to peg claims in the disputed area (EOP 1523) and applied for registration of numerous blocks of claims in the names of Canape Investments (Pvt) Ltd, Dashaloo Investments, Possession Investments, Heavy Stuff Investment and Olebile Investment.

    ACR was then granted a diamond prospecting licence on April 4 2006. On July 21 2006 a Mutare assistant mining commissioner wrote to ACR saying their claims had been cancelled because Kimberlitic Searches had already submitted an application for an extension of the EPO.

    On September 15 the Mining Commissioner in Harare wrote to ACR saying the letter rescinding their claims was incorrect and that the claims were still valid.

    In August 2006 the Mines minister Amos Midzi reserved an area which included ACR claims.

    In September the minister wrote to MMCZ advising them that he had reserved an area incorporating ACR claims to prevent illegal activities. He also said MMCZ must facilitate investment with local and foreign companies.

    Later in the same month Midzi visited the area with MMCZ officials and addressed illegal miners telling them that MMCZ was the only authority lawfully permitted on the site.

    In October he warned ACR to stop clearing and fencing the claims.

    In November the assistant mining commissioner for Mutare told ACR that he had been instructed by his head office to cancel their claims.

    In January 2007 ACR chief executive Andrew Cranswick was summoned to Borrowdale police station in Harare where police seized three sealed boxes containing 129 400 carats of diamonds.

    These are the diamonds the Supreme Court recently ruled should be kept at the Reserve Bank until the case is finalised. Police have seized the diamonds in violation of the Supreme Court ruling. Mugabe and Mpofu have defended the move, risking criminal contempt of court charges.

    As we report elsewhere, mineral claims are easy to change ownership because the Mines ministry is riddled with corruption and EPOs are granted and cancelled sometimes depending on who pays the highest "facilitation fee"!

    ACR prospecting licence and mining rights were taken and given to the state-owned ZMDC and MMCZ to carry out mining operations on behalf of the government.

    But the trouble was that MMCZ has no legal mandate to mine. ZMDC had no money to fund the operations. Investigations show that ZMDC, which mined from 2006 to 2008 at Chiadzwa, got US$12 million from gold mines and put it into Chiadzwa.

    It also borrowed offshore from its current mining partners, which throws further light on why the controversial mining rights were given to Mbada and Canadile. When ZMDC started mining in 2007 the Mines ministry gave it permission to hunt for a partner.

    Meanwhile, ACR took the issue to the courts in a bid to regain its prospecting licence and the diamond claims in Chiadzwa. The Attorney-General's Office declined to represent the state. Instead it offered an opinion stating that in its considered view the mining claim belonged to ACR.

    However, Mines minister Obert Mpofu opposed the ACR application. The other respondents were ZMDC, MMCZ and Police Commissioner-General Augustine Chihuri.

    Justice Charles Hungwe ruled in favour of ACR and said his order should stand notwithstanding an appeal. Mpofu and others appealed and the Supreme Court said all mining activities must stop pending the finalisation of the appeal. It suspended Hungwe's order. The case continues.

    The main players in the Chiadzwa saga:

    • The Zimbabwe Mining Development Corporation (ZMDC), a statutory body established in terms of the Zimbabwe Mining Development Corporation Act. The ZMDC is government's mining arm.
    • Minerals Marketing Corporation of Zimbabwe (MMCZ), a statutory body established in terms of the Minerals Marketing Corporation of Zimbabwe Act. MMCZ is the state minerals marketing agency.
    • New Reclamation Group (Reclam) of South Africa and Core Mining and Minerals (Pty) Ltd. The two companies were brought into the diamond deals by Mpofu through Mbada chairman Robert Mhlanga who is well-connected all the way to President Robert Mugabe.
    • Mbada is a 50/50 joint venture between ZMDC's subsidiary Marange Minerals and Reclam's subsidiary Grandwell Holdings
    • Canadile Miners, a 50/50 joint venture between Marange Resources and Grandwell Holdings
    • Mhlanga chairs Mbada, while Canadile is chaired by former army officer Lovemore Kurotwi.

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