SC 2012-04 Portfolio Committee Report on Mines and Energy on Diamond Mining (With Special Reference to Marange Diamond Fields) 2009 - 2013

FIRST REPORT

OF THE PORTFOLIO COMMITTEE ON MINES AND ENERGY ON DIAMOND MINING

(with special reference to Marange Diamond Fields) 2009 - 2013

Presented to Parliament June 2013

                                                           

Introduction

The Committee on Mines and Energy through its oversight responsibility conducted an enquiry into the diamond mining sector for the period 2010 to 2013. The purpose of the enquiry was basically to hold the Executive accountable for its programs, policies and actions in the sector, taking into account the fact that the financial hopes on revenue proceeds for Government, in 2012 and 2013 have been premised on the buoyant performance of the diamond sector. The findings and observations of the Committee span over a period of four years. The delay in tabling this Report has largely been due to two reasons. Firstly, there was a contestation of power between the Executive and the Legislature over access to information and entry by the Committee to carry on site visits in Marange. Secondly, the Committee was compelled to keep pace with rapid changes and developments in the sector, which made it imperative to base the findings and recommendations on relevant and accurate information.                           

During the enquiry the Committee was also cognisant of the fact that a lot of negative information on Marange diamonds had been churned out by both national and international media, hence it was also important for the Committee to get accurate information, which it could convey back to the citizens as their elected representatives. The enquiry was fraught with a number of challenges but there were also positive outcomes which emerged during the process such as the KP certification of most of the mining companies in Marange. The Committee unearthed a number of irregularities and loopholes at each of the different stages of the diamond value chain. Despite, these challenges, the Committee believes that if it proper mechanisms, strong administration and adherence to both national and international laws are observed, the country would be able to derive maximum benefit from its diamonds.   

Background Information

There are number of diamond mining companies operating in Zimbabwe which include: River Ranch, Murowa Diamonds, Mbada Diamonds, Anjin, Marange Resources and Diamond Mining Company (DMC). Government, through ZMDC entered into joint venture agreements with a 50/50 shareholding in the following companies, Mbada, Anjin and DMC. Marange resource is owned 100% by ZMDC. When the Committee began its enquiry in 2010, another company was in operation known as Canadile Miners but it has since been de-listed by government and its special grant was taken over by Marange Resources. The sector has remained largely small for a very long time until the huge discovery of deposits in Marange. It is estimated that the country now has the capacity to supply 25% of the global diamond market. 

Methodology

The Committee held several consultative meetings and conducted three on-site visits.  Two meetings were held in camera upon request from the witnesses.  During the data gathering process, the Committee noted with concern that there was no free flow of information because some of the witnesses were either too defensive or uncooperative or unwilling to attend the Committee's meetings.

The key stakeholders in this enquiry were:  the Minister of Mines, Hon. O Mpofu; the former deputy Minister of Mines, Hon M Zwizwai; the KP Monitor for Zimbabwe, Mr. A Chikane;  the former Permanent Secretary of Mines and Mining Development Mr. Musukutwa, former and current Zimbabwe Mining Development Corporation (ZMDC) Board and its officials, Minerals Marketing Corporation of Zimbabwe (MMCZ) officials, ZRP Minerals Unit, Mbada Board    Members, Canadile Miners Board Officials,  Murowa Diamond Mining Officials,  River Ranch Mine Officials, Marange Resources officials, DMC officials and Anjin Officials.  The Committee also met the Taskforce on Relocation of the community affected by mining operations.

The Committee conducted its first field visit, in 2009 where it went to Murowa Diamonds in Zvishavane, River Ranch in Beitbridge and Marange Resources in Chiadzwa. During that period government had not yet signed any joint venture agreement with any company to operate in Marange. After a number joint venture agreements were signed from the period 2010 onwards, the Committee was denied entry twice to conduct on-site enquiries. The Committee was only granted entry into Marange in 2012, two years later after the enquiry had begun. The Committee had an opportunity to visit four mining companies operating in the area, that include, Anjin, DMC, Mbada and Marange Resources.  Mbada Diamonds and DMC were not very co-operative during the Committee's visit whilst Marange Resources and Anjin were forthcoming in sharing information and showing the Committee their operations. The Committee failed to conduct a public hearing with the community living in Chiadzwa and was advised that it was inappropriate due to security reasons. However, the Committee managed to visit Arda Transau where some of the re-located communities were now living.

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