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This article participates on the following special index pages:
Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles
Diamonds:
A good deal for Zimbabwe?
Global Witness
February 13, 2012
http://www.globalwitness.org/library/diamonds-good-deal-zimbabwe
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Who
controls revenues from Marange diamonds? A case study of Mbada and
Anjin companies
Executive
Summary
In 2008 the
Zimbabwean army took control of the Marange
diamond fields using troops and helicopter gunships, killing
and wounding many small scale miners in the process. Since then
diamond mining concessions have been allocated to several companies
in questionable circumstances.
Anjin and Mbada
are two such companies. Anjin claims to be the world's biggest
diamond company. It is a joint venture between an obscure Zimbabwean
firm called Matt Bronze and a Chinese construction company. Mbada
is a joint venture between a South African scrap metal company and
the state-owned Zimbabwe Minerals Development Corporation.
Anjin's
Zimbabwean board members include senior serving and retired military
and police officers, and the Permanent Secretary at the Ministry
of Defence. Control by the military and police over a major diamond
mining company creates opportunities for offbudget funding of the
security sector. There is a real risk of these revenues being used
to finance violence during a future election.
In the last
financial year 25% of Mbada was passed to a third party, Transfrontier,
which has an opaque company structure based in secrecy jurisdictions
and tax havens. The beneficial owners of Transfrontier are unknown.
However the firm is named as a 'sister company' by a
South African firm, Liparm Corporation, whose sole director is former
Air Vice Marshal Robert Mhlanga, who is also the chair of Mbada.
Mr. Mhlanga was a prosecution witness in the 2003 treason trial
of then MDC opposition leader Morgan Tsvangarai. Mhlanga is reported
to have been Chief of Staff Operations at the National Command Centre
which controlled the announcement of poll results in the disputed
2002 presidential election. The presence of Mbada, Transfrontier
and associated companies in countries with zero rates of corporation
tax such as Mauritius, Hong Kong, British Virgin Islands and Dubai
in the United Arab Emirates, raises the questions of where these
companies pay their taxes and whether these arrangements are a good
deal for Zimbabwe.
Complex legal
structures and secrecy jurisdictions can be used to hide who benefits
from natural resources. Such secrecy is inappropriate for national
assets and has the potential to conceal corruption, tax avoidance
or off budget government spending. Global Witness has repeatedly
called for transparency over the ownership of concessions, such
as those controlled by Mbada. Revenues from the Marange diamond
fields represent a potentially large windfall to support development
in Zimbabwe. The country's citizens have a right to know how
these revenues are managed.
Key
Recommendations
Zimbabwe's
Government
of National Unity (GNU) should pass legislation banning serving
members of security services from control over, or beneficial ownership
of, mining companies.
The GNU should
immediately review all contracts in the Marange diamond fields,
and audit concession allocation procedures and operations conducted
so far, to see whether they represent a good deal for Zimbabwe.
Mbada and Anjin
should publish details of their ultimate beneficial owners, and
those of related companies such as Transfrontier and Matt Bronze.
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