Bankrupt Chinese Default on Zim Diamond Investments

Now Daily

Chinese Red Army firms corruptly given lucrative diamond mining rights in the rich Marange fields by the regime of Zimbabwean dictator Robert Mugabe have failed to provide the agreed funds, plunging their local joint venture partners into dire straits, it emerged.

The Chinese firms owe hundreds of millions of dollars in pledges made to the government through the state-run Zimbabwe Mining Development Corporation (ZMDC) when they were granted the concessions, information at hand shows.

China pledged $400 million for investments in Mbada Diamonds, Jinan and Diamond Mining Corporation while an undisclosed amount was promised for Anjin Investments. However, only $224 million was availed, leaving a difference of $176 million, according to government documents seen by Now Daily.

“The Corporation (ZMDC) signed joint venture agreements for mining of diamonds on its concessions in Marange. However, joint venture partners did not fulfil their funding obligations as agreed in the joint venture agreements,” says state auditor-general Mildred Chiri in her latest report on ZMDC.

The auditor said the failure by the Chinese to provide the promised funds, for unknown reasons, had created severe cash flow problems for the diamond miners.

“The joint ventures have completed the project implementation phase and are on the production phase. The agreed investments are not likely to be injected as the companies were now selling diamonds and declaring dividends to shareholders. This resulted in undercapitalization in some of the joint venture mines,” Chiri said.

The auditor said she had failed to get figures for the investment by Chinese Red Army firm Anjin Investments.

The Chinese army has been accused of violating the terms of the agreements and of looting diamonds worth billions of dollars in cahoots with Zimbabwean dictator Robert Mugabe, his wife Grace Mugabe, cabinet ministers and the corrupt local security establishment.

Meanwhile, Murowa Diamonds has started rolling out a $60 million four-year development programme following assurances that the diamond miner would not be taken over as part of state consolidation of the corruption-riddled sector. The company was sold to black Zimbabweans by the London-listed Rio Tinto in 2015 after threats by Mugabe to expropriate it.

© Now Media 2016. All Rights Reserved.


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