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CHIADZWA diamond mining companies owe several Manicaland suppliers debts running into millions of dollars, Post Business has learnt.With the drive by the Government to merger all diamond companies into one entity, the Zimbabwe Consolidated Diamond Company, questions on debt recovery have raised alarm among local businesspeople owed hefty amounts of money.
There are seven diamond mining companies operating in Chiadzwa namely, Mbada Diamonds, Anjin, Marange Resources, Gye Nyame, Kusena, Jinan and Diamond Mining Company.
Marange Resources, Mbada Diamonds, Kusena and Gye Nyame top the debt list.
Mutare Rural District Council chief executive officer Mr Shepard Chinaka revealed that the council was owed over $350 000 by Chiadzwa diamond mining companies.
According to several businesspeople that requested anonymity, debts by the diamond companies were ranging from $5 000 to as much as $1 million.
Most of the hard-hit companies were in the security, engineering, construction and transport business.
“We feel it is a waste of time to file cases to the High Court because the cases drag for years.
“We have just been pushing for payment but it is now over two-years with no payment in sight for some of us, while some lucky ones got part payments,” said one of the sources.
Some of the local firms owed are now literally on their knees due to labour lawsuits and weighty debts accrued from services rendered in good faith to the Chiadzwa diamond companies.
Chiadzwa diamonds were expected to be manna from heaven to the Manicaland community that to date has little to show in terms of infrastructural development or robust business from the gems.
In March, in a no-holds-barred meeting on the Marange-Zimunya Community Share Ownership Trust between the Minister of State for Manicaland Provincial Affairs Cde Mandi Chimene and Mbada Diamonds chief executive officer Mr Thomas Lusiyano, it was revealed that all was not well for the diamond mining companies in Chiadzwa in terms of revenue flows.
Mr Lusiyano said that diamond companies were being affected by inconsistent Government policies.
“Some of the policy inconsistencies affected the diamond mining industry.
“The diamond tender selling system heavily affected all diamond mining operations as there were delays in having the money released to companies.
“Some of the diamonds were confiscated after they had been sold through Antwerp. We struggled to maintain our equipment as well as meeting some of our statutory obligations because of delays in having our money released from diamond auctions,” he said.
He added that most international buyers now had a negative perception of operations in Zimbabwe after the Antwerp World Diamond Centre debacle last year, which affected the prices of local diamonds.
“Because of the policy issues, we had to close our mine for the first time in December. We were under severe pressure from almost every angle and Government should not kill the goose that lay the golden egg through some of its heavy taxes as well as policies. This industry needs to be looked after,” said Mr Lusiyano in the no-holds-barred meeting.
Mines and Mining Development Permanent Secretary Professor Francis Gudyanga in April announced that the consolidation process would be complete by early May, but recent developments point to a push for an evaluation of all diamond companies by audit firms.
The valuation is expected to establish each company’s worth in terms of assets and financial status.
Mines and Mining Development Minister Cde Walter Chidhakwa said valuation would be imperative in determining the share ownership structure of the amalgamated company, where Government would own 50 percent while other companies shared the remaining 50 percent. But the c ostly audit exercise is also expected to take time pushing, further the anticipated merger deadline from May.
Prominent Mutare lawyer Mr Chris Ndlovu of Gonese and Ndlovu Legal Practitioners urged owed companies to sue the diamond mining companies.
“If the amounts owed are less than $10 000 you go to the Magistrates Court and if it is above $10 000 you take it up to the High court. There have been many successful lawsuits, so people should not hesitate taking the legal route,” said Mr Ndlovu.
Marange Resources corporate affairs manager Ms Muriel Nqwababa could not comment and referred the matter to the human resources manager Mr Jamu at the head office, who was in a meeting the whole day on Wednesday.
Mbada Diamonds corporate communications executive Mr George Manyanya was unavailable to comment on the matter.
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