Chidhakwa Grilled by Senators Over Marange Diamond Scandal

• The Diamond Report
A NOW DAILY INVESTIGATION
By John Chimunhu
A second batch of “blood diamonds” from the disputed Marange fields in Manicaland, Zimbabwe went on sale at the Antwerp World Diamond Centre in Belgium on Wednesday.
Notable by its absence from the auction was the scandal-ridden state diamond firm Marange Resources.
Auctioneers said the sale, running from 12 – 21 February 2014, had attracted “substantially bigger” packets than those offered in December, which realized a “paltry” $10.7 million. Investigators and activists said executives from Marange were looting the best gems for sale on the black market while submitting worthless industrial stones to Antwerp to cover up their corruption.
Chinese Red Army joint venture Anjin Investments, Diamond Mining Company, Marange Resources, Jinan and Kusena diamonds submitted 279 723 carats at Zimbabwe’s maiden sale of Marange diamonds at Antwerp in December. Also in December, a single diamond (300 carats) smuggled from Marange was sold in Hong Kong for a record $30 million.
The Minister of Mines, Walter Chidhakwa, who is President Robert Mugabe’s cousin and considered one of the “untouchables”, was recently taken to task by Senators over reports of corruption involving state officials in the disputed Marange diamond fields and at the Ministry of Mines.
Transcript:
SENATOR KOMICHI: We would
like to hear from the Minister of Mines. There are stories and
speculations that diamond is no longer there at Chiadzwa and this is
coming from the media. Can you please clarify that matter to us?
THE MINISTER OF MINES AND MINING
DEVELOPMENT: Thank you Madam President. I would like to thank
the Hon. Senator for the question. Let me say that when I visited Marange
towards the end of last year, I had two requests from two companies in
Marange. The requests were to the effect that diamonds are finished and
we want more claims in order to continue diamond mining. The question
that I asked them was, have you done any exploration to see whether
you have conglomerate or kimberlite diamonds? They said no. I then
said, I think it is pre-mature for you to say that the concession does not
have anything until such time as you have conducted exploration.
Madam President, there is desire by companies in Marange to have
more properties allocated to them. It is easy to do alluvial diamond
mining. It requires less capital. The grades were fairly high compared to
other alluvial diamond mining activities in other parts of the world.
Unfortunately, the companies did not prepare themselves for much more
expensive activities in mining, which is going into the earth’s crust to
look for diamonds. Because of that, some of them are now not prepared
to go into the earth’s crust and therefore, are asking for more
concessions so that they can continue to do more alluvial diamond
mining.
The position of Government is that we will not allocate new
concessions to companies until and unless they demonstrate to us, that
they have done exploration and that the exploration reports demonstrate
to us that they no longer have diamonds in total. So the issue is not
whether we have diamonds or not. The issue is that the companies have
run out of alluvial diamonds which are easy to mine and are not willing
to go and spend money to mine the diamonds in the earth’s crust. I have
had discussions with them. We are pushing them and we will continue to
ensure that they do not come and scrape the top and go away. We will
not allow them to do that. – [HON. SENATORS: Hear, hear]-
I wish Madam President, through this House to send a message to
the companies that we mean serious business. These are national
resources which are finite. Diamonds will not be with us forever. We
must do something with them while they last so that future generations
can look at us and say, this generation was given diamonds by God and
they did a, b, c and d with the diamonds. Therefore, let the companies
know that we are serious about what we are doing. I want you Madam
President to know that we will be undertaking serious structural changes
to Marange in line with calls by His Excellency, the President to
consolidate the sector so that, we are able to go into the earth’s crust. We
are not prepared to spend time on the surface when God has given us
something in the earth’s crust.
So we still have diamonds. We are 25% to 30% holder of world
reserves. We still have diamonds, not just in Marange. We are doing
work now outside Marange and in Chimanimani and in other parts of
Manicaland. Also diamonds are available in other parts of the country
but, what we need to do is, more exploration in order to know how much
we have, and how many years we can still mine our diamonds. Thank
you Madam President.
*SENATOR CHIEF CHARUMBIRA: Hon. Minister, you have
said you are not going to allocate more concessions to these diamond
miners. We have read in the Press that your intention is to allocate the
Chiadzwa mining field to just one company. So please, explain to us
what you mean by that? Is that not being double worded?
MR. CHIDAKWA: It is not contradictory. We recognise that
when you sign agreements with investors, you must honour them. It is
our intention to honour the agreements. The agreements are in respect of
specific concessions and you cannot, unless it is by agreement with the
other investors….
*SENATOR CHIEF CHARUMBIRA: On a point of order. I
have asked my question in Shona and so the minister should respond in
Shona.
MADAM PRESIDENT: But, point of order as well to you
Senator Chief Charumbira. You talked in the language that you wanted
because you felt you could express yourself in the language that you
understand freely. The minister is not compelled to answer in the
language which you used when posing your question. He should also
respond in the language which he feels competent in debating in and that
is not a mistake. It is the minister’s right to do that.
*MR. CHIDAKWA: Thank you Madam President. Let me make
my explanation in English, so that Ndebele speakers will not be
offended by the fact that I have used the language which they may not
understand because we will only be contributing in Shona. If you allow
me Senator Chief Charumbira, let me speak in English.
Madam President, we signed in respect of those concessions. We
must make sure that those concessions are exhausted. What we intend to
do is not to renew our relationship with companies beyond our
agreements on the existing concessions, but we must allow the joint
venture agreements to live up to the end of the life of the mine, as
contained in the agreements.
Consolidation is something that we are considering because we
realised that not many companies actually have got the financial
resources to do the mining underground, that gets us to the better
diamonds. So consolidation, from our point of view, is a policy that we
are developing. We are working on why we should go that route. We
are evaluating the performance of the structure that we have had to date,
to see what its weaknesses are and we are hoping that going into the
future, we must have a structure in the diamond sector that is consistent
with the problems and challenges that go with underground mining. So,
there is no contradiction. We will not only ensure that we live up to the
expectations of our joint venture partners but we will also ensure that we
have a structure that gives Zimbabwe the best possible benefit, that
exploits Zimbabwe’s natural resources to the best possible extent.
Thank you Madam President.
SENATOR MUTSVANGWA: Thank you Madam President.
Firstly, I just want to thank the Hon. Minister Chidhakwa for honouring
this Senate by attending to question time. Madam President, maybe, I
speak for the Senate that we are disappointed by the fact that ministers
do not seem to take question time seriously.
Ministers are implementers of Government policies. We are here
to do oversight and we can only do that by asking questions. You can
wonder why we have so many problems happening in the parasatals.
Ministers are the ones who take care of the shareholder’s interest in the
parastatals and it is important that they come to this Senate so that the
Members of Parliament are able to ask questions, to see as to how these
problems are coming up. Madam President, maybe they are not aware
of Thursday as a question time in the Senate.
MADAM PRESIDENT: They know through the Leader of
Government Business.
SENATOR MUTSVANGWA: Well, we need this to be
communicated to them, that we are disappointed by the fact that they are
not coming. We have questions that have been on the Order Paper for
more than three months now.
I am happy to say that the question I have, the Minister had already
started tackling it. The diamond industry, as we all historically know, is
run as a monopoly, but in this country it is a fragmented industry and I
am sure that now the Minister has just talked about consolidating, it
means we have seen that we are being short changed by the fact that it is
fragmented. We are happy to hear that something is being done to make
sure that Zimbabwe benefits from the resources God gave us. These are
God given resources to the people of Zimbabwe and hope that they can
benefit the people of Zimbabwe.
Minister, I come from Chiadzwa and I am the Senator for Mutare,
Chimanimani. What I would like to know from you is that there have
been Community Share Ownership Schemes which have been launched.
We have read and heard about successful activities happening in some of
these areas, where the Community Share Ownership Schemes were
launched. In Zimunya, Marange, the Share Ownership Trust was
launched by the President and that was the end of it. Nothing has
happened and this is over a year and a half now.
What I would like to know is, is there no standard as to how this is
being done? Why are there variations? Why are we hearing that
Hwange, Mimosa and Zimplants there is progrees happening and why in
certain areas there is no progress going on? I thank you Madam
President.
MADAM PRESIDENT: The Minister can answer but I think the
question belongs to a different ministry.
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): Thank you Madam
President, you are right. I am actually on very slippery ground but let
me say that I have been involved in trying to encourage a direction in
our companies that ensures that we honour the promises we made when
the Community Share Trusts were made. All I can say is that this aspect
is led by the Minister of Indigenisation and Economic Empowerment
and all we can do on our part is to encourage the companies to say we
want you to participate in the Community Share Trust.
I want you to know, also, that during my visit to Marange, I raised
the matter with the companies. I reminded them that they had made a
commitment and that commitment needed to be honoured. I say this
about Marange as I have said about other parts of the country. I had the
occasion to meet with one of the chiefs in Hwange, Chief Mutoko, and I
said the same thing, that we will encourage the companies to honour
their promises. I have had discussions with the Chairman of Hwange
Colliery and I have told them they need to honour their promises.
I am also in discussions with my counterpart. I know that he is
required in many parts of the country to ensure that the programme
moves in the various parts of the country. I have said to him that I am
available to assist and make sure that the companies respond to the call.
Thank you Madam President.
SENATOR MARAVA: Thank you Madam President and thank
you Minister for availing yourself here. Madam President, Shabani
Mine once employed about 5 000 people. It is now a ghost town but the
former employees are still there and they are living there although some
of them are being removed from their homes without any compensation.
They were left by the employer without any means of living; no pay or
anything and right now, some of them survive on selling firewood and
tomatoes.
Madam President, these former employees are living in dire poverty.
My question to the Minister is that, is this mine ever going to re-open
and what emergency measures is Government taking in respect of the
worker’s plight, who are stuck there right now. What is Government
going to do to avert this disaster?
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): This sounds like my first
briefing with His Excellency, the President because Shabani is one of
the three companies that we discussed in our first meeting and he said to
me, get it going. All because of its impact, the 5 000 people you have
referred to, their families, the extent to which asbestos permeates our
economy. The majority of our roofs are asbestos and there is that impact
on the economy.
I went into the matter with an intention of understanding what
exactly the problems are. We start with the mining – the grades are good
which means we can do mining. The equipment is antiquated. We had
problems with the marketing but we still have a significant enough
domestic market and the world has accepted that Zimbabwe’s asbestos is
not as harmful as other types of asbestos in the world. Therefore, we can
sell to other countries as well.
As you do your research, you also realise limitations. We won a
court case in South Africa and we got an interdict. Mr. Mawere went
back to the same Supreme Court which had given an instruction to the
High Court to say, he has lost the case and he went to the same Supreme
Court only to delay and gain time. We are back again in the Supreme
Court. When the very companies you are looking to support you as joint
venture partners hear that you are still in court, the response is not very
positive. Yes, we continue to look for resources and partners. ZMDC has
already created a profile of the company, the grades, the advantages and
benefits to the company. We hope that the issue at the Supreme Court in
South Africa will be dealt with and finalised. We have no doubt that we
will win the case but it simply stops us from doing what we ought to be
doing, that is getting the company going.
We need approximately US$16m to slowly begin to get activity to
start. One of the things that we tried to do with the Minister of Finance
and Economic Development – just looking at all these projects that are
not operating and therefore, not giving benefit to the people around as
well as to the nation, was to try and say if we can leverage resources and
we get these companies operating so that these companies will in turn be
able to repay their own debts once they become operational. I am
confident that we will begin to get these companies like Elvington in
Chegutu, Sabi, Shabani and Kamativi and we need to get all those
companies going. The grades are good and they are in demand. Tantalite
is in demand but we need resources. I want you to know that on my part
we are doing the best we can and I have no doubt that we will get it right
but it will take a bit of some time.
I want to take this opportunity to express my gratitude to people in
these companies who have persevered for this long. I want, through this
Senate, to assure them that we know they are there. We know they are in
difficulties and we are doing the best we can to ensure that these
companies – Shabani, Mashaba and others that are in the same situation
are given the life that once was.
MADAM PRESIDENT: Since we only have one minister right
now who is going to be answering the written questions for oral
answers; I guess it is in order for us to extend the questions for oral
answers.
*SENATOR CHIEF MUSARURWA: Thank you Madam
President, for affording me this opportunity, may God bless you for such
a gesture. I could not sit down because I knew you would not shame the
chief by letting me sit down before asking a question. Before I ask my
question, I would like to thank you for praising us for being an organised
Senate who observe the Rules and Orders. May I, also congratulate you
for being elected into this mining ministry which is one of the very
essential ministries in the economy of the country.
My question is, we are now looking at value addition of our
minerals and you have talked of diamonds. If you look at the diamond
industry in India, you will find that it is a very big industry and they
employ over 60 000 employees, they have so many employees for such a
big industry who neither do not have diamond mines. My belief is that
these diamonds come from Zimbabwe. Even in a country like Israel,
they have a big diamond industry yet they do not have mines.
My question is, how far have you gone in the programme of value
addition of our diamonds so that you create employment for our children
and future generations. Thank you.
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): Thank you Madam
President. Let me thank the Hon. Senator Chief Musarurwa for that
question, it is a key question. It is what we must become, if we do not
become that then I think we are doomed.
The history of the development of African economies is founded
on raw materials; raw material is agriculture and mining. All the jobs
that we have created to date have been jobs in the primary sectors of the
economy, in the production of raw materials. Now, we produce raw
materials and we export raw materials for the price of raw materials.
Therefore, the foreign exchange that is coming into the country is
consistent with the income of raw materials but we import finished value
added commodities from other countries at high prices because they
have value added those commodities and we buy them.
When you earn at a low price and yet you are buying at a high
price, it means that you will never be able to balance your books. The
International Monetary Fund (IMF) can come here 50 times a year and
say, balance your books. We will never be able to balance our books
because we are buying expensive things and selling cheap things. We
also need to sell expensive things so that the other countries can give us
money in higher denominations and that comes from value addition,
value addition right across the board.
When I look at the future industrialisation of Zimbabwe, it is going
to be industrialisation that arises out of our ability to value add. We
must value add our tobacco so that we export cigarettes not tobacco; we
must value add our tea so that we export tea bags not tea leaves; we must
value add our diamonds so that we export cut, polished diamonds and
even move further into jewellery. The amazing thing is that God said to
us, jewellery is made out of primarily three metals – platinum, gold and
diamond jewellery. He said to us, ‘I will give you the three of them so
that you can create jewellery’, but we have not done that. We must do
that.
You asked the question and I thought I would say this because I
wanted to respond to the fact of the importance of the question that you
raised. You said ‘where are we with diamonds?’
I had occasion two weeks ago, Madam President, to meet with all
the cutting and polishing companies that ever set foot in Zimbabwe. I
want you to know, Madam President, that there are not less than 20
companies in this country with cutting and polishing equipment that is
sitting and not doing anything. These companies have trained people in
some cases but when I asked them what is the problem? Why are you
not cutting and polishing diamonds?
A whole list of problems, I will point out a few. One is that we
charged them a US$100 000.00 for the licence fee to be renewed every
year. There are two things to that. A US$100 000.00 is not a small
amount of money for anybody, it does not matter who you are.
Secondly, the moment that you give a licence that is renewable
annually, you are saying to the boys who are in the system, wait he will
return. If he refused to give us a bribe, he will surely give in next year
and we will deal with him then. Investors do not invest for one year,
they invest for 10 years and now I am using my experience from the
Zimbabwe Investment Centre and the EPZ Authority. I know that
investors do not invest short term particularly in the sector that we are
referring to.
Therefore, let us give investors 10 year licences, – [HON.
SENATORS: Hear, hear] – let us give them longer periods so that they
can establish and create jobs. Not just jobs that are created in Chiadzwa
but this time, jobs that are created with an advanced skill. Why do we
need jobs at that level of skill?
Madam President, countries do not grow because there are a few
rich people in that country; countries also do not grow because there are
multitudes of poor people. Countries grow because we have created a
middle class of people who are not very rich but can afford many things;
who are not very poor so are there and they can demand this, they can
demand bread, they can send their wife to a hair salon and pay for it,
they can buy a small car and you have thousands and thousands of these
people who have money – [HON. SENATORS: Hear, hear] – those are
the people who drive economic growth. That is the middle class that we
must create and it comes out of skill and value addition.
So, when you value add your diamond to cutting and polishing or
jewellery, you are also value adding your children. You are value
adding their skill and brains because they are now at a different level of
participation in the economy. We said no, we will reduce the licence fee
and give it a longer term. We had a very funny situation where you
allow the companies to go and buy diamonds to cut and polish. We set
10% for cutting and polishing domestically, but if you go and buy those
diamonds because you will never know which ones can be cut; the ones
that cannot be cut, you are supposed to sell them at a 50% discount to
Minerals Marketing Corporation of Zimbabwe (MMCZ).
I said to myself, is that a business arrangement? How does
somebody discount a diamond to the extent of 50% and sell them to
MMCZ for what purpose? No, we cannot do that and so, we will stop
that and ensure that a system is devised. I have asked them to devise a
system; we also need to look at the security considerations and so on and
so forth. By and large, we have agreed with the companies on what
needs to be done in order to get them back and create the jobs, skill and
we move onto the next stage. Thank you Madam President.
SENATOR SINAMPANDE: Thank you Madam President and
thank you Minister for availing yourself in this Senate. You have left
your important duties and decided to come and answer questions here,
we thank you for that.
My simple question is more or less similar to the question which
has been asked by Senator. Marava. Minister, you have mentioned
Kamativi Mine which has been shut for quite a long time that is for 14 to
20 years now. Can you kindly give us a time frame when are you
intending to re-open the mine? I am saying so because there is
infrastructure that is there which was built long back and there is no one
who is looking after those buildings and so they are dilapidating. Please
can you do something? Thank you.
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): Thank you Madam
President and thank you senator for that question. It is difficult for me to
give a time frame, but I want you to know that Kamativi is one of the
companies that we also think, as having a lot of prospects, the reason
being, the price of tin has reached levels and the last time I checked it
was sitting at US$23 000 a tonne. That is an unprecedented price of tin.
We have started getting all sorts of inquiries, but more interestingly is
that tin occurs together with tantalite and tantalite is what is on your cell
phones. All the electronic gadgets that we hold everyday have got
tantalite in them.
However, the interest now is a combination of tin and tantalite and
we were pursuing investment partners in the light of these additional
minerals so that we can revive the company. Honestly, to give you a
time frame is very difficult. All I can say, as I said to the hon. senator
here, there are companies that we must ensure that they become
operational and Kamativi is just one of those companies that we must
make operational.
The ZMDC – I will be going to South Africa and there are quite a
number of companies that have come. If you know Kamativi, you will
know that there are a number of South African companies that have
come to Kamativi looking for that opportunity. So, we will be out there
in Cape Town for the mining indaba. The mining indaba is where most
mining businesses come; conglomerate and share views. You look also
for potential partners as you interact with businesses out there. So,
Madam President, let me assure all the hon. senators that we are working
on it and we want to make sure that the company is revived. Thank you.
SENATOR MUMVURI: Thank you Madam President. My
question is directed to the Minister of Mines and Mining Development.
Why has it taken so long for the Government to appoint the ZMDC
Board for the smooth operation of the mining operations? Thank you.
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): When you appoint a board,
you look at what it is that you want to achieve and then you select the
kind of people which have the expertise to enable you what you want to
achieve. ZMDC must be bigger than Anglo-American for the simple
reason that, all the concessions that we hold in reserve are held by them
on their balance sheet. But, on their balance sheet, it simply says,
western areas Hwange. There is no price to it and there is no value to
say, what is the worth of western areas Hwange because when you do a
balance sheet, you say caterpillar – value US$50 000 and then you put
them like that. Now, if all the properties that are listed on the ZMDC
balance sheet were given a value, certainly it would be bigger than
Anglo-American. So, it is a critical company. It is a company that we
need to ensure that it drives the mining sector, exploration activities and
so forth.
However, there is a process of appointing a board and that process
has to be given approval by the President. Before it gets to the President,
it must also be accepted by others. So, we are in that process but I do
not think we are too far away from the appointment. In fact what I did
is, by the time I announced the dissolution of the board, I had already
compiled the list of names for the new board. We had already sat to say,
what mandate are we giving them to ensure that they are consistent with
the ZMDC law. So, I think that getting into February we must have the
board of directors and the board of directors must give us direction on
where we ought to go. Thank you
*SENATOR TAWENGWA: Thank you Madam President. I
would like to thank the Minister for coming to this House. I remember
last year we went to Antwerp in Europe where our diamonds were sold
for the first time besides the auctions which were done in this country.
When the sanctions were lifted, where the values of the diamonds lifted?
Is it going to be a benefit to our country? Are the sanctions really a
necessity to the progress of Zimbabwe because we notice that there are
people within this country, even within this august Senate, who say there
are no sanctions? How are the sanctions affecting the sale of diamonds?
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR CHIDHAKWA): Yes, in our political
discussions, there is no problem saying anything. I have no problem with
a political discussion and we say what we want. But in a discussion of
realities, I think we ought to just get down to the realities and say what is
the situation? There are sanctions, I want you to know and we were very
happy that ZMDC was lifted from sanctions. There were people who
were fighting very hard; people in Brussels, people in Dubai, people
were very grateful for the work they did and people whom I think will
help us to get into other European countries to convince them that we
need to do business with Europe. I think we are making head- way. So
we were not able to get into Europe from that perspective. Yes, people
say the Belgians were selfish; they wanted to get diamonds for their
cutting and polishing companies. Surely, countries by their nature, look
after their interests. We as Zimbabwe, also must look after our interests.
Because we look after our interests, if our interests coincide with
somebody in Belgium, we will work with them and get what we want –
we worked with them and got what we wanted.
We went to Antwerp for the first time and I said to the companies;
we are moving away from the international tender system that we are
currently using, which is where, after sorting the diamonds, you put
them there and companies come to tender. They put their prices and the
highest bidder gets the diamonds. We thought that perhaps that system
needed to be improved. In order to improve, you want to bring in a
multiplicity of other systems, so the auction system is another option and
we thought we would bring it in. The companies can have the option of
going to the auction system but even in the auction system, we should
not restrict ourselves to Antwerp because there is the Dubai, Shangai
diamond exchange. We want our companies to be able to have access to
all these markets in order to get the best price there is.
It is not just the marketing mechanisms that are important when it
comes to diamonds. I did say last time that we needed to clean our
diamonds and the 31st is our deadline, meaning that our diamonds have a
carbon coating and that coating because maalluvial anoerera nemvura
over many years saka anoita kacoating pamusoro. We need to take
away that coating in order to see the colour and the clarity of that
diamond.
So, we say the companies must clean so that we are able to
enhance our income and 31st is the deadline. We expect the companies
to conform and if they do not; I know that they have not set up
equipment and I have said to the permanent secretary, we are not
removing the deadline, we are simply saying to the companies, find
somewhere to clean them until you set up your own facilities and the
expectation is that, that will be done and we are putting in place
mechanisms to have that done. We hope that will enhance the value
markets, cleaning enhances value. I have said to the companies, we
want you to compare Antwerp with what we were doing and see which
gives us the highest value and they must compare industrial versus
industrial diamonds, gem quality versus gem quality diamonds.
I think that we will get increased value but how much value we
get, by way of increase – I do not know. This is what we now must
experience as we go to the various markets. The removal of sanctions
enabled us to go into these countries. It enabled the big companies to be
able to deal directly with ZMDC because in the past, they were not able
to deal directly with ZMDC because if they did that, they were punished.
Now, they can go to an auction and buy Zimbabwean diamonds at the
auction and pay money to ZMDC without any problems.
In the past, they would have to find little boys who will go and say
I will link you to this company which manufactures, cuts and polishes
and then bring the diamonds – it just did not work well. Now we are
hoping we can put in place a truly international system that enables us
not only to achieve transparency but to achieve also better prices for our
commodities.
SENATOR TIMVEOS: Thank you Madam President. Hon.
Minister Chidhakwa, I wanted to just ask how are you going to tackle
corruption? We have been reading a lot about corruption, your Ministry
and Chiadzwa, even the board of directors or the bosses were said to be
paying themselves over US$100 000 and almost US$200 000, an
example of what is happening. What are you going to do to tackle
corruption? Thank you very much?
THE MINISTER OF MINES AND MINING DEVELOMENT
(MR CHIDHAKWA): Thank you Madam President, thank you hon.
Senator for that question, it is a question that we must ask everyday and
we must answer every day until and unless we say to ourselves this is
bad for our economy, we will not move, particularly in the mining
sector. Yesterday I addressed our officials at the Geology Service
Centre, where our geologists are housed. I said to them the first thing
that you need to know is that God did not create you corrupt.
God created you by the circumstances around you and you allowed
yourself to be corrupt. You think it is a small thing and I keep telling
them that it begins by saying ndikangowanawo kaUS$300
kekubhadhara school fees then next time you will say kaUS$300 inga
kanotowanika next time you say US$1000, next time US$5000. The
information that you are giving up for US$300 is worth billions of
dollars for this country and we yield very valuable information about our
resources to foreigners for very small amounts of money. The
department that is accused of corruption the most is the Chief
Government Mining Officers in the districts. While they give
allocations, they say we will allocate you this claim, the people sense
and say, well it looks like a very rich claim and pay the Government
officer, then another person is allocated on it, another will offer more
money and he will be allocated on it and they will continue to do that.
When I got to the Ministry the first day, I looked at the papers and
I saw that I am first respondent on a matter that I have not known kuti
yakamboitikira kupi and I said, how do I become a first respondent on
this matter. The issue is that we must create institutions and systems
that are able to detect and deal with corruption and I want to give you an
example. There is what is called the cadastre system, the cadastre
system is a system that divides the country into small little boxes on the
computer and using GPS systems, you are able to say this claim runs
from this point to this point, you allocate that on the computer. If
somebody comes for an allocation and needs to take away his name; you
can put security systems that ensure that the moment you want to
allocate, the computer refuses to produce anything, it says there is
already somebody allocated.
If you want to take away the person who is there, you must send a
message to your senior official until you get to the permanent secretary
and to the minister, now if you are going to change and give your friend
akupa mari, you have to corrupt this whole chain kunosvika nayo
kumusoro and hazvina kuchipa kuti ucorrupte vanhu vese ivava.
We think we should have systems in place. Zambia is not a big
mining country but it has these systems. They implemented the systems
about two or three years ago. I asked one of the officials and he said;
minister you are a third minister who has asked for this to happen. There
are two other Ministers of Mines who also requested that we implement
this; since you have also come up, your track will be covered and things
will continue normally and corruption will be taken care of. We must
also keep educating officers in the various departments that national
interest is important.
In the companies that you were referring to honourable, allow
people who are working there to believe that if I can work hard enough
to create enough money to pay the salaries of our chief executives; if I
can pay the salaries of the people who work here and my own salary, I
am done. They forget that these are Government companies which must
serve the people of Zimbabwe. We have started investigating, we are
working on Marange now. By the end of the month we will have the
results of Marange and we will tell this Senate the results. We will also
act. Thank you Madam President.
SENATOR A. SIBANDA: Thank you. Madam President. I
would like the Minister to tell the Senate how much it costs to register a
claim and can we as women venture into mining, especially women
Parliamentarians? Can the Government also fund us? Do you also
encourage women to get into mining?
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR. CHIDHAKWA): Thank you Madam
President. Let me thank the hon. senator also. There is something
called ‘Women in Mining’. They shock me, because when you see them
on the ground and you see them in our offices running around with their
paper work, you will say this is good. But I think it is not good enough.
Most of the mining by the majority of our people is happening in
the gold sector. I think it is a sector we can really promote small scale
mining. The chrome and gold sectors are sectors where we can promote
real activities because it has succeeded in other countries and there is no
doubt that it can succeed here. I did not have respect for them until I
looked at the numbers. I noticed that in one year, they were doing 6 000
kgs of gold. That is very significant. In that year it was 50% of total gold
production. This tells you that if our people are supported and given an
environment to participate, they will participate and they will do so
actively.
It costs US$300 to apply for a 10 hectare claim. You would then
need peggers. I think they also charge about US$300. I do not
remember whether we left it at US$300 when we reviewed all the
licence fees. They will appear as soon as the budget is announced. I am
happy that this Senate has also had an opportunity to look at some of
these things. We have reviewed the price downwards but I do not
remember whether that one has been reviewed.
You can have access to a claim but we do not have geologists to
assist you. Yesterday when I went to the geology office, I learnt
something completely new. The people you see reading in the library
are either agents of the big companies. They are looking at an area; let
us say the Mutare River. They are looking at all the history that has ever
been written about mining in that area. Has there been any mining in
1910 or 1915. They are reading all those things because all those things
will tell you that in this area, there are possibilities of gold or chrome
mining.
So, our people need to make it very intellectual; we need to get our
children to go to the library. It is a very useful library. I want to
continue to market it. I learnt something yesterday which I did not
know. I want people to go there. I want the geologists to tell me that it
is fully subscribed because people must understand. That is what the
white people do. They read about the Runde River and they see portions
of it and then they go and do exploration. The results will tell them and
you will see them starting to build machines because they have done that
work. I want you to do that. If you cannot do that yourself because you
are busy, get your children to do that because it is useful activity.
We are working on a facility on the gold sector to get some
equipment. We are setting up service centers which will provide
technical expertise. We will have geologists located there so that they
will give you advice on how to go about your mining. We will have
mining engineers who will tell you how to sight your mine and so forth.
They will also tell you how to deal with issues of the environment. We
will also have Fidelity Refiners also located there to be able to buy the
gold so that people do not lose their gold kumaboora ngoma ekuSouth
Africa. We will set up these facilities starting in the Gweru Area, but we
will ensure that each province has got such a facility which will help our
small scale gold miners as we go forward.
We are also trying to put in place a facility that will buy small gold
mining equipment. We will import it and then have arrangements with
the banks, for you know, it has been there and it has not functioned well.
We need to make it much more efficient so that the equipment is useful.
We will have that during the course of this year to support small scale
miners, including women obviously. Thank you.
SENATOR A. SIBANDA: Thank you very much Madam
President for giving me the opportunity. The Minister is doing a good
job. He is triggering our thinking and our minds. He has explained very
well the benefits of value addition and that we cannot continue to sell
our own cheap and earn little money and buy something more expensive
then the balance sheet will never balance. I just wanted to ask the
minister, what steps is the ministry taking to develop that relationship
with major cutting countries like India, Dubai, China and many others
because we know that in diamond, it is not just about reducing the
licences for the locals? It is a network and you need to be in the network.
It is an international market. What is Zimbabwe doing so that we create
that relationship which will then lead to the domestic market to develop
also so that we can cut and polish our own diamonds so that we can earn
more and not be short changed? I thank you.
MR. CHIDHAKWA: Thank you Madam President. That is an
added benefit of coming to this Senate. I have just got an instruction to
look into the network. I was not there yet, I was just trying to deal with
companies that are already in Zimbabwe to make sure they just do
something. I have not gone to look at the diamond cutting and polishing
networks, the jewelry networks. What I have done is, I have looked at
numbers, for instance you cut and polish. When you sell raw, you earn a
certain amount of money. It rises to 24 billion when you cut and polish
and it rises to 71 billion when you do jewelry manufacturing. This is
world cutting and polishing jewelry industry. You are right that it has
got to do with these very strong networks which are in fact cartels. You
cannot cut and polish unless you are in a network that then gives you a
market. I am only hoping that the companies that we have, because the
majority of them are in joint ventures with companies from Israel, India,
Belgium, I am only hoping that they have done enough homework to
ensure that the cut and polished diamonds will have access into the
international market.
Our last visit to China gave us an insight because we met the
Shangaai network of diamond dealers and you begin to see the very
strong linkages between production; cutting and polishing, and the
jewelry industry. It is a stage that we must get to and we must promote.
What I want now is to get the current companies to start operating
because I know they can create two, three thousand jobs weeks if we can
get them going.
But, you are right – I thank you very much for that direction and
that advice that we must know that there is an international character to
it and we must know how to break into that international character. I
thank you.
SENATOR W. SIBANDA: Thank you Madam President, for
giving me this opportunity to ask a question to the Minister of Mines
Hon. Minister. Chidhakwa. You talked about reviewing the monies that
are charged to people who apply for claims and all that. My question is,
be in my area there is an area called Matobo where Rhodes settled?
There is Rhodes Matopos National Park and there are people who are
very poor who are interested in mining. These very same people that we
want to empower wanted to go and mine in those areas. There is what
they call a special grant, which means you have to go to Rhodes
Matopos National Park and you pay about. You go to the mining office
where you are asked to pay US$5 000.00. So what does that mean? That
poor person who wants to improve his life has got to part away with
US$9 000.00 for him to mine in an area which was settled by Rhodes
who is a person who actually colonised us. That National Park is under
his estate. My question, is what measures are you taking as a ministry to
sort out that problem? I thank you.
THE MINISTER OF MINES AND MINING
DEVELOPMENT (MR CHIDHAKWA): Thank you Madam
President and thank you Senator Sibanda for that question. I think you
are referring to the reservations which are either Ministry of Mines
reservations or National Parks reservations. I think this must be
registered as a National Park, because I think that the whole area there is
National Parks.
There are two things to it; when we hear that there is a mineral in
an area as Government, we go and reserve the area so that we do not get
unlicenced mining taking place which is unorganized. So we reserve the
area. We then sit down to say how do we, in an organised manner ensure
that people can mine in that area? This is where you now apply for a
special grant to enable you to go into this reservation to mine. On our
part, the fees I cannot tell you how much our special grants are now
because it is a whole host of fees that we have had to review. We have
reviewed the fees of those but, when it comes to National Parks, they
have a reservation that relates to the environment, whether it is to
animals or to something that is declared by Government as needing
protection. I think that area has got that kind of reservation. For you to
go and mine in an area like that you would then need the Ministry of
Environment, Water and Climate headed by vaKasukuwere.
I do not know whether they have reviewed their rates but even as it
is, it does not stop people from mining outside the reservation. You see,
when for instance you have got uranium you do not want that to be
mined by anybody. In fact, the Government has to be there to make sure
that it is properly done and so, we give these reservations time and
again. This is not where we promote the poor but we look at strategic
issues of the country. There are minerals that are becoming so strategic
and so rare that you want to protect them in order to mine them for
strategic national interest. You want to know who is mining because you
cannot just let anybody from other countries to come and mine without a
specific agreement with you.
I know that you are people who are interested in mining in a
special area or in a reserved area. You are saying the fees must come
down. Even as the fees come down, we will also look at the strategic
nature of that area and say, are we going to use this one to support our
poor people? As is the case for instance, with minerals such as
platinum, uranium, barium, very expensive minerals.
Even if we lower the prices, we would still protect that as a
strategic mineral. We were working on a policy that say, these are
strategic minerals. Government will have to deal with them very
carefully. Those mines where anybody can mine, we allow people to do
that. They can peg their claims and do their mining whether it is gold
and other minerals. We cannot say diamond because we have said that
we want as much as possible to reduce the number. So we can manage
how it is mined and how it benefits the economy. Thank you Madam
President.
ORAL ANSWERS TO QUESTIONS WITH NOTICE
AMENDMENT OF MINING AGREEMENTS
4. SENATOR MUSAKA asked the Minister of Mines and
Mining Development whether mining agreements for big companies
such as Zimplats and Mimosa in Mhondoro Ngezi can be amended to
incorporate clauses that compel them to fund community developmental
projects such as road surfacing?
MINISTER OF MINES AND MINING DEVELOPMENT
(MR. CHIDHAKWA): Today’s ethos in the mining sector is resource
measuring. The people around the mine want to benefit. This is the
message that I am going to send to South Africa when we go for the
Mining Indaba. You cannot develop a mine and take minerals away
without benefitting the area around you. When you change or amend
agreements, you do so with the concurrence of those you agreed with
initially. I do not think that they would agree because you are asking
whether we cannot amend and put clauses that will require them to put
up road infrastructure and other infrastructure. We did not have to do it
that way.
We did it the other way, of putting in place the Community Share
Trust and putting in place also the workers’ trust. Now the Community
Share Trust is supposed to be directed exactly to the infrastructure you
were referring to. We said before we start talking about your profit, we
want a path that goes straight into infrastructure development and this is
the part. When you say this is mine, it is not enough to just say it is
mine. It is more important to manage it in such a way that it benefits
you. This is exactly the question that we started off with, that the
community share trust is not working.
We have got a legal instrument which was passed by this House
but we are not ensuring that, that instrument is used to our benefit. I do
not know whether it is pushing and pulling between ourselves. The roads
are not being maintained, the cliques and clinics are not being built. The
schools are not being built and yet, if we get together say in an area, we
get US$10 million. It is US$10 million for goodness’s sake, it is not
change. It is money that you can then say, let us buy a grader, bulldozer,
borehole drilling equipment and we can do the drilling on our own. We
can do the road making on our own.
These things can be done but I think we need to take a step further
and say yes, we have acquired it. It is like acquiring land. We acquired
land. But, unless you use it, it will be useless. We must take another step
that says, how do we use it? As individuals, in our respective homes,
make use of it, and in our respective communities, push because the
structure is the same. The Chief Executive, the DA and the chiefs will be
leading the process and making sure that the money is put in a bank
account, and that the projects are submitted. We want to build 10 km of
this road. How much does it cost? Tenders come in, and you sit down
and adjudicate. You make a decision and a road is made or you use your
own equipment if you have bought your own equipment.
That is what we must do because we have got the instruments. So,
it is not necessary to go to the agreements that we have signed because,
those that we have signed with them, will simply remind us that, no, the
things that you want to sort out are contained in the 10% shares that we
gave to you on the community share trust. Thank you Hon. Senator.

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One thought on “Chidhakwa Grilled by Senators Over Marange Diamond Scandal

  1. Abraham kapishe

    hon. minister chidakwa: all is not well at anjin diamond mine were workers have no rights, the workers commitee has no freedom of expression. the language is if u a not happy with the happenings here leave the jobe. the company does not give neither increaments nor bonuses!unpaid overtimes a converted to overtime. the salary gape with sister companies like mbada and marange boggles despite the fact that anjin is the biggest world class diamond company. workers a fed up with opressivd languages such as take it or leave it in a free zimbabwe.worse still, it is amazing that if a worker keves job or dismissed whatever the case may be, the teminal benefits a culculated at zero point zero seven percent! this is happenin in zimbabwe my hon. senators and minister. what it means is if one does not have leave days he goes home with peanuts nn matter one worked for how long. it all the china way while the black mangement is the catalist their brothers plight! to add salt on wound the company even fails to feed its workers but instade makes workers to contribute each sixty dollars monthly from your three hundred dollars basic pay! something is wrong at anjin and we call for professionalism wjthout delay. if l am not mistaken,according to the constitution of zimbabwe, no soldiers or police man must be seen employed or managing any other institution other than their service! nothing is professional at anjin, salaries as little they are are paid on the middle of the following month without without care families, school fees, and rand since majority a lodgers. pse minister take the bull with his horns, dont allow to be intimidated by those who want to please our enemy by distroyin zimbabwe.it is now high time we treat corrupt people as enemy number one and not gentlemen.

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