Govt diamond miner operating illegally: Parly

HARARE - The Zimbabwe Consolidated Diamond Company (ZCDC) is operating illegally, after Mines minister Walter Chidakwa formed the entity without an Act of Parliament to guide its operations, it has emerged.

Mines ministry permanent secretary Francis Gudyanga was yesterday grilled by the parliamentary portfolio committee on Mines and Energy chaired by Masvingo urban Member of Parliament Daniel Shumba.

The parliamentarians told the permanent secretary in no uncertain terms that the newly-formed ZCDC was operating illegally.

“… when it concerns matters of the public, in particular deployment of resources to take over an entire diamond sector of the country it is not just the Companies Act that determines operability, it will just provide guidelines. State enterprises in this country are guided by Acts of Parliament.

“The question the committee is asking is — is there parliamentary authority through an Act empowering you to set up that company? A simple yes or no question,” Shumba said.

“There is no Act on which ZCDC was formed,” Gudyanga said, adding that the company had been formed as a contingency measure.

ZCDC was formed after Zimbabwe diamond miners rejected a consolidation proposal by government in which government was set to have 50 percent in the new company, while other players were to proportionally share among themselves the other 50 percent stake based on their balance sheets.

The committee learnt that ZCDC had remitted about $1 million to treasury, with a yearly fiscal contribution projection of $2 million.

During the last six years, diamond firms contributed $637,3 million in terms of payments to government — an amount which steadily plummeted to a $23,4 million fiscal contribution in 2015 from the $125,2 million which made its way into the fiscus from the miners in 2010.

Comments (1)

This is extremely poor reporting. Left out crucial information like : since formation of ZCDC has paid to treasury $1m yet diamond companies used to pay $30m a month. Chairperson of ZCDC has no experience of diamond mining and could not answer any question including production figures. He is a former pupil of prof Gudyanga. All board directors were appointed by Gudyanga and are from his home province of Manicaland. Gudyanga is secretary of mines and chairs three mining companies which report to him and appoints all board members. He directed MMCZ to pay $1.3m to an agricultural company for work done on behalf of ZRP which coincidentally installed irrigation equipment on his Manicaland farm. He refused to explain by saying it was sensitive information. The diamond mining industry is just as opaque as it was before the consolidation, since the structure and financials was not revealed. No one seemed to know anything.

bexilford - 22 June 2016

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