Canadile official spills the beans

The Zimbabwe government announced early this month that it was taking control of a joint diamond mining venture it was operating with Core Mining and Mineral Resources following allegations that the South African firm fraudulently acquired mining claims at the controversial Chiadzwa fields in the east of the country.

The state-run Zimbabwe Mining Development Corporation (ZMDC) said the South African firm was kicked out of the diamond fields also known as Marange after one of its directors was arrested for fraudulently obtaining diamond concessions. ZMDC cancelled the diamond claims of Core Mining with which it formed a joint venture company called Canadile Mining in July 2009 and blacklisted all its 12 directors in a move that saw them barred from conducting mining business in Zimbabwe.

The ZMDC has also suspended five of its top officials for conniving with the South African company to secure mining concessions at Marange. The arrested ZMDC executives were part of the company’s board select committee which conducted due diligence on the approved strategic investors before they signed the joint-venture agreements. The five ZMDC officials and Core Mining director Lovemore Kurotwi have appeared in court on charges of allegedly fraudulently using the name of a Channel Islands-headquartered diversified natural resources company, BSG Resources Ltd, to obtain a contract on behalf of Core Mining.

Greedy individuals

But in an open letter to President Robert Mugabe last week, a Core Mining shareholder accused greedy powers that be of leading a smear campaign to move away from their contractual obligations. In a case reminiscent of the ongoing dispute between the Zimbabwe government and British firm African Consolidated Resources (ACR), the shareholder pleaded with Mugabe to stop the vultures from taking over the company without investing a cent.

He denied the BSG link, insisting the Channel Islands incorporated company was unknown to Cores shareholders and was never part of the discussions with our partners. It is therefore a clear smear to move away from the contractual

obligations of our partners and suits the interests of those greedy individuals that have been offered greater rewards for such actions, while we remain committed to the people of Zimbabwe, said the unnamed shareholder. He did not mention the greedy officials.

He however accused Mines Minister Obert Mpofu of refusing to release US$3.4 million which was Cores earnings from the second auction of Marange diamonds held in August. The ministry also refused to renew work permits for 16 xpatriates employed by the company to assist in operating the mine and to train local staff.

Despite the re-skilling initiatives, Government refused to extend the work visas of the expats and their lives were threatened on the mine to the extent that it was unsafe for them to return, he said. This led to a sharp decline in operations, with tonnages being manipulated and production dropping to 40 percent of the true output of the plant.

Vulture economics

Canadile staff were being influenced and controlled by the very same powers that now wish to apply vulture economics to usurp the mine for their own benefit, with no expertise or consideration of benefit to the people of Zimbabwe, without making an investment of a single cent, the shareholder said in apparent reference to army generals allegedly mining at site.

Mpofu could not be reached for comment.

ACR is locked in a long-running legal battle to regain control of the Marange fields from the ZMDC which has parcelled out ACR claims to two South African-linked companies and some Chinese investors. The British company has warned it will be forced to pursue international litigation against the Zimbabwean government as a last resort if current efforts fail to broker a win-win outcome in its battle to regain control of the Marange diamond field.

Mpofu in March declared that the London-based mining firm controlled by one white man would never mine diamonds at Marange as long as he was in charge of the ministry. Mpofu accused Cranswick of leading a campaign to block Zimbabwes bid to officially sell diamonds from Chiadzwa.

Chiadzwa is one of the worlds most controversial diamond fields with reports that soldiers sent to guard the claims after the government took over the field in October 2006 from ACR committed gross human rights abuses against illegal miners who had descended on the field.