HomeLocalNews in depth: British investor digs in over Marange diamond concession saga

News in depth: British investor digs in over Marange diamond concession saga

BY KENNETH MATIMAIRE

London-listed mining firm, Vast Resources is holding on to its Marange diamond concession and optimistic that it will be re-admitted into the vast diamond fields through a long overdue partnership with the Zimbabwe Consolidated Diamond Company (ZCDC), investigations reveal.

The development follows an initial investigation supported by the Information for Development Trust (IDT) — a non-profit making organisation examining bad governance — where it emerged that government had shelved the deal.

The British investor partnered with Chiadzwa Community Company (CCC) formerly known as Chiadzwa Mineral Resources (CMR) to form Katanga Mining which was expected to have sealed the deal with ZCDC not later than October 18 2019, according to archived pronouncements by Mines Minister Winston Chitando.

However, government had been dragging its feet to put ink on paper as it emerged from CCC that the former had subsequently put the deal on hold.

Russia’s Alrosa and Chinese’s Anjin Investment — whose investments were announced more or less the same period as Vast —were long given the green light.

This has raised questions about the new dispensation’s sincerity in engaging British investors.

Vast Resources chief executive officer Andrew Prelea opened up that they are not backing down from the deal.

Though Prelea said he could not say much about the deal, he revealed that engagements with ZCDC and the Mines ministry were on-going.

Not yet out

“As we are a publicly listed company, I’m not at liberty to make comment that is not in the public domain.

“We can say that we have maintained dialogue with both the ZCDC and the ministry of Mines and still wish to work in Zimbabwe,” he said during an interview.

Prelea’s sentiments are backed by the company’s latest statement released on April 13.

“In Zimbabwe, the company (Vast Resources) is focused on the commencement of the joint venture mining agreement on the Community Diamond Concession, Chiadzwa, in the Marange diamond fields,” reads the statement in part.

Vast indicated that all its stakeholders continue to express their support and the company remained confident that an agreement will be finalised in due course.

Additional documents gathered, indicate that the Group is using its subsidiary — Botswana Diamonds to financially support and offset Katanga’s operational expenses.

Botswana Diamonds indicated that to date, the Group incurred expenditure of £58 815 (US$77 961) on exploring for new licenses in Zimbabwe (which is yet to be granted) and £11 203 miscellaneous costs.

It is imperative to note that Vast, disposed its gold mining venture – Pickstone-Peereless Gold Mining Company (Pvt) Ltd — after it accrued a US$40 million debt.

Moreover, efforts to get government’s position on the outstanding partnership between Vast and ZCDC through its parent ministry remains contested as the responsible authorities are throwing the dice at each other.

When contacted for comment, the Mines minister, Chitando requested questions in writing which he has not responded to while his deputy, Polite Kambamura directed questions to ZCDC.

“Kindly follow up with ZCDC,” said Kambamura when reached for comment.

ZCDC chief executive officer, Mark Mabhudhu said, “Like I indicated last time to you, the issue of Vast Resources and the community concession are the domain of our principal who is the ministry of Mines and Mining Development.”

Archived details regarding the deal highlight that the ministry of Mines has been the mouthpiece of the outstanding joint venture from its initial stages but has suddenly grown cold feet to clarify the current status of the deal.

Blanked out

A Commodity Outlook 2022 report by the Chamber of Mines released in February, indicates that government is banking only on ZCDC, RioZim, Alrosa and Anjin to boost its diamond output to five million carats this year from 4.2 million carats last year.

The outlook does not feature Vast’s outstanding partnership, which stands to complement diamond production if approved — a clear indication that the British firm is not within government’s medium to long term plans.

Natural resource watchdogs slammed President Emmerson Mnangagwa’s administration for frustrating potential investors with capacity to complement efforts to meet or surpass its 2022 diamond annual targets.

They further questioned how government intends to meet its US$12 billion target by 2023 in the mining sector when it is slamming the door on other potential investors merely because Britain does not share cordial relations with Zimbabwe.

“It indicates problems with regards to the manner in which government is engaging,” said Centre for Natural Resources Governance (CNRG) executive director, Farai Maguwu, who added that corruption was at the centre of the Vast Resources deal.

“High on this issue is corruption, the rent-seeking behaviour of people tasked with engaging the investors.

“So, if one is to dig deeper into that deal, you will find that there are some corruption fees that have not yet been paid.”

He further indicated that Vast’s initial partnership with CCC to form Katanga Mining would benefit the community and accused the ruling elite of abandoning its mandate to empower grassroots communities.

“The deal is not sailing through mainly because the interests of the ruling elite have not been secured. And that’s why they are throwing spanners. But if they (Vast) pay the corruption fees to the right people, the deal will be fast-tracked,” said Maguwu.

His sentiments come at a time several reports have emerged exposing a cancer throughout the country’s extractive sector riddled with rent-seeking behavior, corruption and organised crime.

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