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Parliament Grills Minister Over $10 Million Indigenization Funds

Diamond companies reportedly donated millions of dollars as part of their proposals to comply with the indigenization law which requires them to transfer majority stakes to local people.
Indigenization Minister Francis Nhema was Thursday grilled by parliament over his failure to produce agreements between the government and diamond mining firms in Chiadzwa stating the companies should pay at least $10 million each into the Marange-Zimunya Community Share Ownership Trust under the country’s controversial black economic empowerment program.

Controversy seems to follow the country’s Marange diamonds. Right from the beginning, operations in Marange have lacked transparency with activists urging the government to be transparent in all its deals with firms mining in Chiadzwa, Manicaland province.

Now a lot seems to be unraveling with the companies in Marange – Ajin Investments, Mbada Diamonds, Diamond Mining Company and wholly state-owned Marange Resources - telling parliament recently that they did not sign any agreement with the government to provide $10 million each towards the Marange-Zimunya Community Share Ownership Trust meant to benefit the local community.

Former Indigenziation Minister Saviour Kasukuwere, who is still to be called to parliament, responded and released letters in the media showing there was some communication between him and former Mines Minister Obert Mpofu asking him to follow up with the companies to pay up.

Mpofu raised a stinker, telling the media he did not know anything about the agreement and Kasukuwere responded by publishing the letters between the two of them.

On Thursday, Francis Nhema, the current indigenization minister had his turn before parliament’s indigenization committee.

He was grilled over the issue. Nhema said there was no written evidence that the four mining companies in Marange had pledged $10 million each. But, he said, a gentlemen’s agreement was reached with the companies at a meeting they held with the ministry.

Nhema said the ministry had assumed that the mining companies would pay the $10 million each since other mining firms, Unki and Zimplats, had contributed $10 million each to community trusts in their respective arrears.

Committee chairman Justice Mayor Wadyajena said it was worrying that government business was being run through gentlemen’s agreements.

Further quizzed, Nhema said he was also investigating whether the companies had really made the pledges, which his predecessor, Kasukuwere insists were made.

Appearing before the same committee last month, representatives of the four companies said they never made any pledges, adding they were told by the indigenization ministry that they should contribute $1.5 million each to the Marange community trusts as seed money for the trust over a five-year period.

They all said they were surprised when President Robert Mugabe announced at the launch of the trust that they had each pledged $10 million each to the trust.

Robert Mhlanga, chairman of Mbada Diamonds, told the committee that though his company is ready to contribute to the community trust, it never made any pledge.

Mbada and Marange Resources are the only two companies that have so far paid $200,000 each to the trust.

Marange-Zimunya Community Share Ownership Trust is not yet operational despite having $400,000 in its coffers. Some trust members told the committee that rampant corruption and political interference are affecting its activities.

Diamond Mining Company General Manager, Ramiz Malik, told the committee last month that his company wanted to pay the $1.5 million they were told to shell out by the indeginisation ministry but it was not clear who they should give the money.

He urged the government to put things right in the diamond industry so the gems can benefit the nation.

The parliamentary enquiry started following Marange Community Trust’s failure to begin operations due to the companies’ reluctance to pay into the scheme amid reports of corruption and political interference.

So far trust board members, mining company representatives and Minister Nhema have testified before the committee. More people are expected to be called to stand before the committee that will come up with recommendations to the government on the way forward at the end of the hearings.