$45m govt cash seized

HARARE - About $45 million in diamond revenue was on Friday seized by a South African company in Belgium after it had been granted an interim order against President Robert Mugabe’s cash-strapped government over a cancelled platinum concession, the Daily News can reveal.

This comes after Amari Platinum Holdings Limited (Amari) had taken the crisis-ridden administration to the International Court of Arbitration (ICC) with a $500 million suit and Harare risks losing more assets, and cash to global creditors taking advantage of its decision to “transact in hostile jurisdictions”.

Although government officials and other backers were hopeful of overturning the ex-parte ruling on the basis that it had been given against funds belonging to private players, Mines minister Walter Chidhakwa’s decision to sell diamonds in Antwerp had created fertile grounds for a new battle or turf wars in Zanu PF and Cabinet.

“You will recall that when Mike Munn’s company was granted this interim relief, it seized this money on the basis that it belonged to the Zimbabwe Mining Development Corporation (ZMDC),” said a source yesterday.

“But what is peculiar is that these guys took advantage of the decision by government to sell its diamonds in Belgium and, clearly, we have not seen the last of these seizures if they continue to transact in hostile jurisdictions.”

“Out of Zimbabwe’s $10 billion debt, there are several creditors with executable judgments and these include the Zimbabwe Iron and Steel Company funders, former white commercial farmers and European investors whose bilateral agreements were violated,” they added.

Government went ahead to participate in the Antwerp auction despite reported protests from diamond companies who anticipated that their cash in “hostile” European territory where Zimbabwe is under sanctions would be seized.

In March this year, Mbada Diamonds chairman Robert Mhlanga urged government to stop selling diamonds at the centre of global diamond trade in Antwerp, Belgium saying there were risks involved.

Addressing the parliamentary committee on Youth, Indigenisation and Economic Empowerment, Mhlanga said:  “I have strong reservations about Antwerp because they are our yesteryear enemies. We have actually reeled under sanctions, thanks to Brussels and for us now because they have claimed to have lifted sanctions and we run to them. Personally, I have my own reservations,” Mhlanga said.

“I don’t think that is good. I strongly believe that Zimbabwe as a country we have capacity to hold auctions in this country where hundreds of companies can attend. There is a multiplicity of benefits when you invite people to do tenders in your own country. You bolster your own tourism industry… I don’t believe in appeasing a foe.”

Mhlanga’s advice was ignored resulting in the current scenario where government has lost millions.

With the cash-strapped government lurching from one crisis to another due to its haphazard management of resources — just as it did when it seized African Consolidated Resources (ACR)’s Chiadzwa gem fields — critics said the latest development was likely to open floodgates for such legal actions.

Apart from Amari and ACR, the Impala Platinum-owned Zimbabwe Platinum Mines has lost nearly 28 000 hectares of land in the Selous-Chegutu area after the Zanu PF leader’s administration seized it.

In the Amari case, the company argues the 2010 move by Chidhakwa’s predecessor Obert Mpofu to unilaterally cancel their memorandum of agreement with the ZMDC was wrongful, especially after it had invested well over $4,5 million in key exploration work.

Although Zimbabwe has managed to escape a higher damages demand, it had also won some relief after a Zambian court had invalidated an earlier ruling by the ICC on the grounds that it was fraught with many inconsistencies.

As it is, government lawyers — through an offshore firm — are preparing for a bruising battle to reverse the ruling on September 19 in Lusaka and “retrieve” the money that has been lost so far.

Highly placed government sources told the Daily News yesterday that government lawyers were preparing for a “showdown” hearing in Lusaka where they will argue that the ZMDC was not in a position to present its case to the tribunal.

However, it is the spectre of losing millions for Mugabe’s government that has serious implications for the bumbling regime that is already failing to pay or provide for many services, including civil service salaries.

Zimbabwe, which was holding its third diamond auction in Antwerp following the lifting of sanctions on the gems by the European Union in 2013, was expecting to fetch over $70 million in proceeds.

Faced with a huge budget deficit due to dwindling revenues emanating from massive company closures, declining foreign direct investment, and low aggregate demand in the economy, government recently introduced a raft of tax measures to boost its coffers.

Amari was the largest foreign investor in the mining exploration sector between 2008 and 2009.

Mining experts and Mines ministry officials say the Serui Platinum Project, which was going to be a world-class venture, would have become one of the biggest platinum producers in the region.

Comments (27)

his government keeps shooting itself in the foot at the expense of the national interest. This is all because the cabinet is a patronage cabinet. Ministers were chosen (according to Mugabe), on the basis of loyalty to and longevity in the party structures. In essence this is like a chipangano type of cabinet. All brawn and no brains. God help us.

connie - 15 September 2014

What do we believe now. In the first paragraph you say 45 million was seized but in the middle of the story you say 450 million was seized. Tozive zvipi nhai. You must check, check, cross check and check again your stories so that we are not confused.

sean mafirakureva - 15 September 2014

Mr Editor, maybe you can help the readers, where was this Amari mine. Is this part of the structures that we see at the round about at "Half-Way" (Selous) to the left as we drive towards Chegutu

s shumba - 15 September 2014

At 90 it is obvious that any leader at that age has no balls to run a country bcoz he is very very very tired and confused no longer living naturally but on medication on daily basis at 90 it is usual and rightly so that you can die any second . So pliz MZEE Mugabe wende kunyumbani ukapuzike nabankana na kuchunga siku lakufwa unazeka baba wende

Diibulaanyika - 15 September 2014

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we d - 15 September 2014

what then. when we expect the economy to recover these things are happening what then are we saying. what more can we expect now.

ma1 - 15 September 2014

Nhamo neman'a hazvisiyane

kitsi - 15 September 2014

Is there an proof to that else we are being taken to the well - kuendeswa kutsime or kutambiswa bhora risina mweya.

maita - 15 September 2014

The president is 90 years old

Harare - 15 September 2014

And his name says it all, Chidhakwa. What do you expect from a drunken minister, everything he touches wobbles, like Ziscosteel now our diamonds. Too bad.

badass - 15 September 2014

If ZANU PF had a way, these problems would be hidden from us. Folks these are the benefits of: not paying bills, taking away wealth you have never worked for, corruption and an appetitie to spend what you don't have done at the national level. An individual ungadayi BP yakwira, usati warota husiku usisa vate, uchenye, yes touchy touchy. On an individual basis you file for bankruptcy, pay the little you can manage as approved by the court and then have a fresh start. You can have afresh start at government level. George Bush (mwana) iye Jonji forgave a loan of $1 billion owed by Mozambique. Other African nations debts were also forgiven. This was the time Mugabe and Blair were having their little sparing. Our leader and some ministers said the West can go to hell. If they were smart they should have kept quiet maybe we could have been forgiven a little there and so on. Even zvekuti China shame the West vayitoseka kuti China ichabhadharwa nenhapwa here? Kana iwe uine chikwerete unotorerwa chako changoti musoro budiseyi mumvura chivedzo genje.We are in for a big fight for a long to time to come. I recommend these folks who have miserably destroyed Munhumutapa's former kingdom to do the right. Immediately dissolve parliament, call for fresh elections, be responsive to demands about reforms and we can have a fresh start. For those with dirty laundry yavasingadi kuti izivikanwe unowuya usiku vanhu vavata totaura obuda munyika kunogara kumwe kana usingadi kugara muchizarira.Asi ukaramba uchiti ndini faka simbi, vanoramba vachiti, kakata kakata kakata nzou hayiremerwe nenyanga dzayo.

Chiguri Mabarwe - 16 September 2014

Get your facts right. How can you say $45m was seized, you then increase it to $450m and you end up by saying the company had invested only $4,5 M. How can they seize $45m or $450m if they had invested only $4,5m

mbatatisi - 16 September 2014

Ma million anovhara aya

MAMILLION - 16 September 2014

I wonder if the editor checks these articles before they are published. Errors or is it failure to get facts correct. One paragraph says $45m and another says $450m, which is which. Come on mhani.

Be Correct Always - 16 September 2014

when I was reading this passage I never saw anywhere written $450m so I donot no where my fellow readers got that figure. the bottom line here is 90yrs is a budern kana pamusha chaipo tisanyeperane we are in trouble as a nation

mr honest - 16 September 2014

Mhlanga's advice was ignored resulting in the current scenario where government has lost $450 million

novice - 16 September 2014

450m 45m 4,5m 500m 70m 10m dzese idzi dzirimo munyaya all u nid z to read carefully guys b4 u comment otherwise muukuvharwa nechingezi kkkk

rico - 16 September 2014

armed war is now the solution to zim situation what is your reaction to this one

tozvireva - 16 September 2014

Mr Editor please explain to us did Amari etc buy this land to claim it as theirs today? Remember the white pioneer column also greedily parcelled out claims to themselves. Please get to the bottom of who owns what.

Observer - 16 September 2014

We can't continue to be subjected to the jungle law of survival of the fittest that prevailed at occupation in the 1890s.

Observer - 16 September 2014

and we just keep on flying to Singapore for treatment???

Oh Oh - 16 September 2014

Do Zimbabweans really deserve this kind of government? Problems with everyone everywhere. Are we ever going to be a normal country again?

Johno - 17 September 2014

MHLANGA's was 1000% right but thieves refused.He(Mhlanga) deserve to be the Minister

diamond - 17 September 2014

MHLANGA's was 1000% right but thieves refused.He(Mhlanga) deserve to be the Minister of MINES

gudo - 17 September 2014

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