Tuesday, 7 June 2016

MINES MINISTER'S JOB ON THE LINE

Mines minister Walter Chidakwa is facing a major battle for his political career after it was revealed yesterday that Zanu PF hawks want his head on the chopping block for lying to President Robert Mugabe, the party and the nation about missing diamond revenue to the staggering tune of $15 billion.


The ominous news for Chidakwa also comes after the government controversially decided to appropriate all Marange diamond claims earlier this year — amid claims that this was part of Zanu PF’s brutal factional and succession wars.

To add to the under-fire minister’s headache, it was also recently announced that the government’s Zimbabwe Consolidated Diamond Company (ZCDC), which took over from Chiadzwa diamond companies such as Marange Resources, Mbada Diamonds, Anjin Investments, Diamond Mining Company, Jinan and Kusena, had sacked its top management for maladministration and incompetence.

Among those fired were chief executive Mark Mabhudhu, mineral and exploration manager Takawira Zhou, finance director Stewart Musekiwa and human resources director Desire Jam.

This was after the company only managed to remit a reported paltry $1 million to Treasury in May from the sale of 120 000 carats, contrary to what Chidakwa had promised last month when he said Zimbabwe could produce one million carats of diamonds per month and earn the country $800 million in dividends annually.

Senior Zanu PF and Mines ministry officials who spoke to the Daily News yesterday said Chidakwa’s failure to do sufficient research on the missing diamond revenue, as well as the operations of ZCDC, was not only an embarrassment to the government, but had also left the minister “exposed”.

“Everyone is seriously concerned that with the 2018 elections around the corner, there won’t be enough resources for campaigning,” said a Zanu PF official with close ties to the military.
“It is now clear that the closure of Marange diamond companies has worsened the cash situation in the country, as well as compromised government’s ability to pay civil servants,” the bigwig added.

Another official claimed that Mugabe was, as a result, under pressure to replace Chidakwa “with someone who understands the mining industry and with the capacity to mobilise resources”.

“Several government ministers are lobbying for the return of (Obert) Mpofu to the ministry. Despite his own weaknesses, Mpofu had the party at heart as he made sure we had enough resources for the 2013 elections,” the second source said.

A Mines ministry official also told the Daily News that “the chaos happening in the sector is reflecting very negatively on the ministry and the government”.
“The problem with the minister and his permanent secretary (Francis Gudyanga) is that they do not consult widely, and also rarely take suggestions from technocrats. For instance, while consolidation was not a bad idea, the way it was rushed through without proper consultation is a disaster,” the official said.

There are also claims that Chidakwa refused to rope in global audit and advisory firms such as Ernst & Young and PricewaterhouseCoopers to help calibrate a viable model for ZCDC and the industry.

The Centre for Research and Development (CRD) also said earlier this year that it was concerned that the government had started the consolidation process without undertaking necessary due diligence processes.

“We are deeply concerned that prior to the merger, government has not instituted independent audits on all mining operations in Marange where government is a major shareholder.

“There is also no feedback from the minister of Mines on the order he gave to mining companies to submit audited financial reports to government in June 2015.
“Audited reports on Marange diamonds were critical to provide direction to the mergers if the issue of transparency and accountability was to be of priority to government,” the Farai Maguwu-led pressure group said.

On his part, Enoch Sithole of the National Union of Mines, Quarry, Iron and Steel Workers of Zimbabwe told the Daily News that the union had also written to Chidakwa to register its disapproval of establishing the consolidated government diamond company.

“A member from a sister union has even written to the minister regarding the way the company is being run. As it stands, and in terms of the Labour Relations Act, they were not supposed to dismiss workers, yet we hear people are being let go randomly,” he said.
Economist Vince Musewe said ZCDC was set to keep under-performing until new leadership came into power.

“We know Zimbabwe has 82 State enterprises all of which are making losses, are marred in corruption and are under-performing. Why then would we be surprised that another parastatal is under-performing?

“The parastatal is systematically failing just like the other State-owned enterprises because there is need for new leadership from the Head of State level to ministerial appointments, all the way down so that we see change and improvement at the newly-formed company,” he said. daily news

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