ZIMBABWE Consolidated Diamond Company (ZCDC) chief executive officer, Mark Mabhudu and finance director Stewart Musekiwa have been fired, a few months after their appointment amid reports that the consolidation of diamond miners in Chiadzwa is now backfiring on government.
Officials at the ministry of mines told The Standard that Mabhudu and Musekiwa were shown the exit on Friday after it emerged that they allegedly misrepresented to government about production forecasts. There were also allegations of corruption and nepotism at the company.
Mines and Mining Development minister Walter Chidhakwa confirmed the ZCDC board met on Friday but said it had not yet given him feedback.
“I haven’t been given the report but the board met yesterday [Friday]. I will be given the report on Monday,” he said.
Officials said the ZCDC was crumbling as all hopes of jump-starting the economy with the diamond sector faded after government withdrew the licences of Anjin, Mbada Diamonds, Marange Resources, Diamond Mining Company, Jinan, Gye Nyame and Kusena
“The official position is that the two failed polygraph tests [tests to determine whether one is telling the truth or lying], but this is just a smokescreen as they were fired for corporate governance issues,” said a Mines ministry official who requested anonymity.
The official said ZCDC acting chairperson and mines ministry permanent secretary, Professor Francis Gudyanga was being accused of shielding Mabhudu since their time at the failed Marange Resources.
“Everyone was surprised that Gudyanga appointed Mabhudu and other executives from Marange Resources as ZCDC bosses yet they knew these guys had failed to run the parastatal which was the worst performer in Chiadzwa in terms of diamond production,” said the official.
“The ZCDC appointments were just about giving jobs to friends and relatives but now the country is paying the price. Gudyanga probably realised that these officials would cost him his job and decided to fire them.”
Gudyanga is reportedly also the acting Minerals Marketing Corporation Zimbabwe (MMCZ) chairperson.
ZCDC has also been accused of misleading Mugabe that up to
$15 billion diamond revenue disappeared, a statement that has come back to haunt the 92-year-old leader and Zanu PF.
Two other ZCDC officials, Takawira Zhou (mineral and exploration manager) and Desire Jam (human resources director) were last month also fired, but Takawira was then recalled a few days later.
Gudyanga’s mobile phone went unanswered while Mabhudu’s was unavailable.
In March Chidhakwa said following the consolidation of mining activities in Chiadzwa, the newly-constituted ZCDC expected that by April 30 it would be selling 500 000 carats every month at an average value of $25 million.
Chidhakwa said the country was projected to earn between $25 billion and $30 billion in the next decade compared to the $2 billion realised since 2006 when private firms were given the green light to mine diamonds at Marange.
The official said it had, however, emerged that ZCDC last month only managed to mine a paltry 120 000 carats of poor quality diamonds which were sold in the May tender, realising only $5,5m.
Of the money realised from the diamond auction, only $1,1 million went to the fiscus while the rest went towards royalties, management fees, administration and marketing costs.
“The country is now facing a serious cash crisis because ZCDC is failing to produce in order to bring in the much-needed foreign currency into the country.
Finance minister, Patrick Chinamasa and others are now putting pressure on Chidhakwa because diamond revenue which used to help sustain treasury has virtually dried up,” said the official.
“It looks like the previous arrangement where different players were mining was better. We actually had one of the companies which used to contribute towards civil servants’ salaries and advancing government with cash.”
Another official said it had also been revealed that ZCDC sub-contracted another company to do the actual mining of diamonds as it had no capacity and this was done without going to tender. According to the Memorandum of Agreement seen by The Standard, ZCDC was paying the sub-contractor in diamonds yet government had directed that all diamonds be sold through the auction system.
“It is unfortunate that the mines minister is non-technical and they take advantage of him,” said a Zimbabwe Mining Development Company official.
“Recently he was in the media glorifying the purchase of an xrt machine by ZCDC at a staggering $2,5 million. But as experts we know that x-ray technology (xrt) is used for mine dumps and those machines are less than that price. They cost as low as $500 000.”
ZCDC reportedly has no mine engineers and geologists who are the most critical in the mining process. The company only has metallurgists. standard