Mbada says losing cash on stockpiled gems

Zimbabwe cannot sell diamonds from Marange (also known as Chiadzwa) until the Kimberley Process (KP) inspects the stones and certifies that they were obtained in line with the world diamond watchdogs standards. The requirement is part of measures to end human rights abuses and other illegal activities at Marange where Zimbabwes army is accused of committing rights violations and diamond smuggling.

Robert Mhlanga, chairman of Mbada Investments, Tuesday told Parliaments portfolio committee on mines that his firm was incurring huge loses stockpiling diamonds instead of selling them for profit. He said: We are suffering (because we are mining but not selling). We are not in the business of stockpiling and the more we stockpile the more insecure that stock becomes because thieves can set in.

Closely guarded secret

Mbada is one of two joint venture firms formed by state-owned Zimbabwe Mining Development Corporation (ZMDC) and some South African investors to exploit the Marange deposits in line with KP standards. The other firm mining at Marange is called Canadile Miners.

The firms that until yesterday had refused to appear before the parliamentary committee have kept their operations at Marange a closely guarded secret, amid allegations that some of their officials were once illegal drug and diamond dealers in the Democratic Republic of the Congo (DRC) and Sierra Leone.

Some of the directors of the two firms such as Mhlanga 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.

But Mhlanga insisted that their activities at Marange were above board and claimed that KP monitor who visited Zimbabwe last month gave his company a clean bill of health.

“As Mbada we want to believe that we are fully compliant on all aspects, even the interim KP report gave us a good bill of health,” he told the House committee.

Mhlanga rejected charges that his firm had attempted to sell 300 000 carats of diamonds without KP certification and without notifying relevant police and government departments.

Diamond auction

The Mbada chairman astonishingly claimed that the diamond auction stopped by the government at the eleventh hour last January was, in fact, just a hoax designed to test the market.

It was purely for our own marketing strategy. At no time did we say we are going to have an auction because there was no way we could sell without going through the relevant avenues such as the KP and the MMCZ (Minerals Marketing Corporation of Zimbabwe), Mhlanga told bemused legislators.

Mhlanga, who was warned on several occasions by committee chairman Edward Chindori Chininga to stick to the truth because he was speaking under oath, also insisted that the appointment of private investors to join with the ZMDC to form Mbada was above board.

This was despite the fact that Mines Minister Obert Mpofu, his permanent secretary Thankful Musukutwa and the ZMDC have all admitted to Chindori Chiningas committee that proper procedures were not followed in appointing the private players to work with the ZMDC at Marange.

The parliamentary committee among other things wants to establish why and who licenced Mbada and Canadile to exploit the Marange deposits without following proper procedures.

Marange 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 British-based Africa Consolidated Resources that owned the deposits committed gross human rights abuses against illegal miners who had descended on the field.

Human rights groups have been pushing for a ban on Zimbabwean diamonds but last November, the country escaped a KP ban with the global body giving Harare a June 2010 deadline to make reforms to comply with its regulations.