Diamond consolidation another pie in the sky

MUTARE– Consolidation of diamond mines in Chiadzwa is not a panacea to the shoddy dealings in the diamond sector, with some officials heading the process fingered for duplicity by civic society.

Centre for Natural Resource Governance director Farai Maguwu made these remarks at the 4th annual Provincial Mining Indaba organised by the Zimbabwe Environmental Law Association, to bring together stakeholders in the mining sector.

Maguwu revealed that the Permanent Secretary of Mines and Mineral, Professor Godfrey Gudyanga who directs the Mines and Mineral Corporation of Zimbabwe also leads the Dubai Diamond Exchange a subsidiary of the Dubai Multi Commodity Centre.

Maguwu said the DMCC is formed under the Ministry of Mines of the United Arab Emirates with similar guidelines as the Mines and Minerals Corporation of Zimbabwe, to lead the acquisition of diamonds for cheap prices.

Maguwu said this was a clear violation of corporate governance ideals, as both roles were conflicting in their interests, compromising his position. He said the UAE worked clandestinely by weakening internal control systems of developed countries to buy diamonds cheaply and sell them off at higher prices.

“If there is anything that you want to know about ZCDC approach Professor Gudyanga he knows more about it, he is a Director of Dubai Diamond Exchange a subsidiary of Dubai Multi Commodity Centre, of the Ministry of Mines of UAE, which buys diamonds from countries like Zimbabwe through weakening internal controls, and buys them for cheap and then dispose them at a higher price.

“Gudyanga is therefore responsible for a decision of who buys diamonds in Dubai and as the chair of ZCDC he also decides where to sale these diamonds, he is playing a double role in clear violation of corporate governance ideals,” he said.

He added, “We need to wake up, the first issue that was needed was an investigation into what went wrong, we have lost so much revenue and yet we want to continue business as usual we must arrest people so that corruption is dealt with.”

He must give us answers we should not look for anything in the consolidated diamond company. Board should be appointed with the oversight of the parliamentary portfolio committee on minerals to ensure that this committee’s integrity is not compromised.

Mukasiri Sibanda, Economic Governance officer for ZELA said currently there is hope for transparency as the consolidated company has so far released figures on what they have mined.

He however said there is need for government to clearly address outstanding issues in the consolidation of mining companies considering declining production in the diamond fields.

“There is an improvement on the transparency measure in the new company because they have so far declared their dividends in the first two months of production in the company.

“There is a significant decline in the production of diamonds in the mines from a peak of 1 million carats to 150 000 carats in the two months ZCDC has produced. However this information should be accessible to the people to ensure that transparency leads to accountability,” he said.

Cosmas Sunguro of the Zimbabwe Diamond Workers Union (ZIDAWU) said there were outstanding issues affecting the workers is still to be addressed.

He said there are over 2000 workers who were summarily dismissed by diamond mining companies, with over $8 million owed to the workers.

“We are really concerned over the labour issues that have not been fully addressed by consolidations, with over 2000 workers fired without compensation.

“Workers from Ainjin were forced to sign unclear agreements without compensation and this amount is over $8 million and there is no clear engagement from ZCDC on how this matter will be resolved,” he said.