RAPAPORT… Five top officials from the Zimbabwe Mining Development Corporation (ZMDC), a company under U.S. and E.U. sanctions, and one official from Canadile Miners have been arrested for fraudulently gaining the rights to mine diamonds at the Marange fields, according to local media reports.
The officials include ZMDC chief executive Dominic Mubaiwa, company secretary Tichaona Muhonde, chairperson Gloria Mawarire, and board members Ashton Ndlovu and Mark Tsomondo. Canadile Miners local representative Lovemore Kurotwi was also arrested, the state-run Herald reported.
Suspects allegedly led government officials to believe that they had sufficient resources to operate a concession at Marange, saying that South Africa-based company, BSGR, was interested in investing $2 billion in Zimbabwe.
Unnamed sources told the Herald that the executives knew that BSGR did not exist but instead the suspects reported to government that the company was fully operational and a suitable investor.
The scheme became apparent when Canadile failed to meet its financial obligations and borrowed $1.5 million from Agribank to start mining operations.
The Herald noted that Canadile’s operations have been suspended and that the ZMDC has taken over operations at the mine.
The fraud allegations comes as Zimbabwe is negotiating to gain approval from the Kimberley Process to resume exports of diamonds from Marange. The government recruited Canadile Resources and Mbada Diamonds to mine the fields in November 2009, and a third investor, Chinese company Anjin, is expected to start operations at a third concession by year end.