Chiadzwa: more shocks

obert_mpofu3We needed the money Mpofu
HARARE - No due diligence was carried out before Minister of Mines, Obert Mpofu (pictured), appointed two South African registered companies to mine diamonds at the fabulously wealthy Marange diamond fields.

According to documents leaked to the media this week, The New Reclamation Group (Reclam) had no diamond mining experience and no plans to enter this field.

Minutes of the Zimbabwe Mining Development Corporation (ZMDC) select committee on the due diligence investigation exercises also show that an unnamed Israeli national is financing Core Mining and Minerals (CMM).

Core Mining advised that they had a principal domiciled in Israel and that principal shall be responsible for financing the entire project. They emphasized that the principals name must remain confidential, said the committee, which visited South Africa from August 4 to 6 to meet representatives of the two companies.

The committee makes it clear that its due diligence exercise was merely academic because the CMM and Reclam were handpicked to partner the ZMDC well before the committee had evaluated the two South African firms.

The committee also says that, in its view, the two South African firms unknown in the diamond industry – were not qualified to partner the ZMDC at Marange because they lacked the skills and expertise required with Reclam, for example, specialising in scrap metal reclamation.

They (Reclam) have no diamond mining as part of their vision and growth strategy, the ZMDC board committee said in the report that was last February handed to a special parliamentary that is reviewing the governments handling of the Marange claims.

Reclam, which is part owned by insurance giant Old Mutual Plc and is southern Africas largest scrap metal company, is represented in Mbada Investments through its subsidiary, Grandwell Holdings.

The ZMDC committee said in addition to refusing to disclose the identity of its principal, CMM appeared not even prepared for the due diligence exercise when the committee visited South Africa.

No adequate team had been assembled in order to attend to the ZMDC team. The select team was incapacitated and could not successfully do its evaluation, the report said.

Mpofu last month told Parliaments portfolio committee on mines and energy that he recommended CMM and Reclam to the ZMDC board.

Mpofu also admitted that he did not follow laid-down procedures when he licensed Canadile and Mbada to mine diamonds at Marange. But he defended his actions as necessary because the government urgently needed cash from the diamond deals and following procedures would have negatively affected efforts to raise funds.

The parliamentary committee is yet to complete its probe.

Mbada and Canadile were brought to Marange in an attempt to bring operations at the notorious field in line with standards stipulated by world diamond industry watchdog, the Kimberley Process (KP).

However, the two companies operations are shrouded in controversy, amid revelations that some board members were once illegal drug and diamond dealers in the Democratic Republic of the Congo and Sierra Leone.

Some of the directors of the two firms are also known to have close ties with Zimbabwes military establishment that is accused of stealing millions of dollars worth of diamonds from Marange and offloading them onto the foreign black market for precious stones.

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