BY CLIFF CHIDUKU

WITH its economy tanking, Zimbabwe is looking to mining for salvation.

But platinum ore exports may be leaking millions of dollars in potential revenue the country needs to plug an acute shortage of foreign currency, fuel and drugs, according to local mining experts.

While accurate data is not readily available, the experts say Zimbabwe has not enjoyed the full benefit of its natural resources in part because exports are paid for without including the valuation of several other mineral elements in the platinum group of metals (PGM). Other problems include misreporting of the quantity of exports and the absence of smelters in Zimbabwe to process platinum locally.

However, the platinum producers deny illicit leakages and say they are abiding by all export regulations.

PGM contains ruthenium, rhodium, palladium, osmium, iridium and platinum. These elements tend to occur together in the same mineral deposits. Platinum is one of the top three foreign currency earners for Zimbabwe alongside gold and tobacco.

Norman Mukwakwami, an independent mineral economist, however, notes that with loopholes in platinum mining, Zimbabwe’s ambitions to raise annual mining earnings to US$12 billion by 2023 from the current US$2,9 billion appear unattainable. Zimbabwe has three PGM producers, Zimplats, Mimosa and Unki. A fourth entry, Karo Resources, which broke ground in August 2018, is eyeing to produce at least 1,4 million ounces of PGM by 2023 and has set up a base metals refinery. The Chamber of Mines said Karo Resources was still at the exploration stage.

Mukwakwami said PGM producers were capitalising on leakages in the sector, ranging from weighbridge problems to lack of smelting plants.

“It’s not realistic to achieve that feat when PGM producers are under-declaring exports,” he said.

Mukwakwami has carried out research work for civic society organisations on several issues that affect the extractive industry, including government policy, mining law, illicit financial flows and conflicts between industry and communities.

“In the past, the companies were simply not declaring the minerals that government did not know about. Since PGM deposits contain several elements, they are not individually refined in Zimbabwe as producers export semi-processed ore, matte, which still contains all minerals.

“Statistics show that of the PGMs, only exports of platinum and palladium were declared between 1990 and 1996 with rhodium being reported beginning in 1997. Exports of ruthenium and iridium were only reported beginning in 2002,” Mukwakwami said.

“Analysis of the data shows a near consistency in the amounts of each of the PGMs contained in the ore: 50% platinum, 40% palladium, 5% rhodium, 3% ruthenium and 2% iridium. It can thus be estimated that from 1990 to 1996, 17kg of rhodium was not declared in exports, while between 1990 and 2001, 342kg of ruthenium and 161kg of iridium was not declared in exports.

At today’s prices, this is $1,2 million worth of rhodium, $2,7m worth of ruthenium and $6,9m worth of iridium. This amounts to a total of $10,8m worth of PGMs that leaked out of the country over a decade.”

At the moment, Zimbabwe does not have a platinum refinery plant, therefore, PGM producers export ore concentrates.
However, Zimbabwe’s biggest PGM producer, Zimplats, is a subsidiary of the South African Implats and its exports are to its parent company, thus Implats is benefiting from the other minerals after refining them, but will not pay anything to Zimbabwe.

Since PGMs are exported in raw form, Mukwakwami says it is hard to quantify the actual prejudice.

“While it is difficult to quantify trade misinvoicing in the sector, it is clear that there are weaknesses in regulating exports; that can easily be exploited by companies. One weakness is that the average truckload of matte for export from PGM companies undergoes no independent verification of its weight or composition by government officials,” he said.

“It is MMCZ (Mineral Marketing Corporation of Zimbabwe)’s responsibilty to verify these figures and their approach is to station officials at the mine’s laboratory where tests (assays) are carried out and that same official also observes the weighing of trucks at the weigh bridge. This creates loopholes as officials can be bribed, or the loading equipment and weigh bridge can be calibrated to falsify results.”

Mukwakwami said osmium provided a gap that PGM producers have been exploiting.

“Another issue is that of osmium. This is PGM contained in the exports which companies claim they have no market for and thus do not pay any royalty or tax on.”

He said the market price of osmium (US$400 per troy ounce) has not changed in recent years owing to poor demand, few uses and challenges it poses in terms of storage because of its toxic nature when it oxidises.

Mukai Mangezi, a consulting geologist with MuGre Global Mineral Exploration, said: “The best way of getting value of its mineral, especially platinum, is that Zimbabwe needs a policy shift and embrace beneficiation. It is practically difficult to account for all PGM elements when exporting ore.”

Mines deputy minister Polite Kambamura concedes that Zimbabwe is losing out from ore exports, and is pushing mining companies to beneficiate their produce.

“It is a fact that we are losing value in exporting concentrates. This is the reason why government had proposed a 15% tax on exportation of unbeneficiated platinum. This was a way of pushing companies to add value to PGM locally, thereby making sure all PGM elements are accounted for,” he said.

“We are alive to the fact that there could be ‘other’ base metals, but if we process it locally we are certain to get value. The beneficiation thrust is in line with achieving US$12 billion earnings annually by 2023.”

But MMCZ said although Zimbabwe has no PGM refineries, all ores are processed in South Africa and all elements are recovered and accounted for.

“MMCZ can confirm that refineries in South Africa are not recovering osmium from Zimplats material. To curb any leakages, MMCZ has stationed metallurgists at all PGM mines to monitor and verify production, exports and sales declarations. The monitors check the accuracy of any figures to be declared and used for invoicing by the producers,” MMCZ general manager Tongai Muzenda said.

Platinum Producers Committee chairperson Alex Mhembere, who is also Zimplats chief executive, dismissed allegations that PGM producers are under-declaring some elements in platinum ore.

“The three platinum producers in the country (Zimplats, Mimosa and Unki) are reputable organisations with linkages to leading PGM producers in the world. And contrary to the assertion, for several years now the MMCZ has permanent officers deployed at each PGM producers’ premises. These officers monitor the entire production process up to the final export invoices that are in fact issued under the MMCZ banner.

“All three platinum producers follow elaborate and internationally-accredited metal accounting systems. The systems are anchored on sub-systems of sampling, measurements and assaying by internationally-accredited laboratories through the entire value chain, including drilling and blasting, crashing and milling, flotation processes and smelting. We stand tall and very proud of the work and controls we have in place,” he said.

A 2018 Chamber of Mines report says Zimbabwe’s platinum output increased by 3% to 14,6 tonnes in 2018 from 14,3 tonnes in 2017. The country’s three platinum producers continued to operate at full capacity despite depressed platinum prices, and output was projected at 15,5 tonnes in 2019.

In a drive to attract investors, the government last year scrapped the indigenisation policy; regarded as an impediment to investment, as it prescribed that 51% shareholding of any foreign investment should be ceded to locals. The extractive sector, particularly platinum mining, has been the main centre of attraction to investors.

While it is difficult to quantify how much Zimbabwe loses through illicit financial flows (IFFs), a study by the African Forum and Network on Debt and Development reveals that between 2009 and 2013, the country lost US$2,83 billion through illicit flows in the mining, wildlife and fisheries sectors, translating to an annual average of US$570,75m.

IFFs are illegal movements of money or capital from one country to another with Global Financial Integrity classifying it as a movement when funds are illegally earned, transferred or utilised across country borders.

 This story was written for NewsDay as part of Wealth of Nations, a media skills development programme run by the Thomson Reuters Foundation. More information at www.wealth-of-nations.org. The content is the sole responsibility of the author and the publisher.

BY CHARLES LAITON

AFTER a captivating month where Vice-President Constantino Chiwenga and his estranged wife, Marry, threw brickbats at each other in riveting court applications in their ongoing divorce proceedings, the public might have had their last as the couple has decided to resolve its differences outside the courtroom.

The move came at a time graphic details of their strained relationship, alleged drug abuse, accusations of witchcraft and illegally acquired vast wealth were laid bare through affidavits deposited by each party at the High Court, where the divorce proceedings were set to be heard.

Chiwenga set the ball rolling last month, when upon his return from a four-month long stay in China where he was hospitalised, he caused Marry’s arrest on allegations of externalisation, money laundering and attempted murder and eventually locked her out of their matrimonial home in Harare’s leaf Borrowdale Brooke.

The former general also forcibly took over custody of the couple’s children, accusing Marry of being a drug addict and too sickly to look after them.

Upon her release from remand prison, Marry took Chiwenga to court demanding the return of the children and access to the house.

She then followed that up with a huge maintenance bill – broken down as US$40 000 per month maintenance for her upkeep and a total of US$7 500 per month for their three children, among other demands.

She also exposed the retired general’s alleged presidential ambitions even before President Emmerson Mnangagwa’s tenure has expired and how Chiwenga had been captured by Sakunda Petroleum’s Kuda Tagwireyi, a prominent fuel dealer who pampered him with top of the range vehicles for personal use.

Yesterday, Marry was at the High Court in the company of her lawyer Taona Nyamakura where they met Chiwenga’s lawyers Wellington Pasipanodya and Advocate Lewis Uriri with a view to have the matter deliberated on, but the hearing was deferred.

“The matter has been deferred to Tuesday, January 21 for possible argument or confirmation of settlement. We exchanged positions as legal practitioners acting for both sides in the matter and the tentative position is that this is a matter that we both agreed should be settled and not argued,” Nyamakura said, soon after exiting Justice Christopher Dube-Banda’s chambers.

“It will be in the best interest of the children that the parties find each and that the law is followed. But it’s a tentative position, if we cannot reach a settlement by Monday, then it means we proceed with oral argument on Tuesday as directed by the judge.”

Early this week, Chiwenga openly accused Marry of having caused his illness and attempting to end his life in a bid to take over his vast property empire. The Vice President also accused Marry of being a drug addict and consulting witchdoctors in a bid to bewitch him.

Marry hit back revealing that the collapse of the couple’s nine-year customary marriage was brought about by Chiwenga’s alleged paranoia, poor health and the influence of “heavy doses of drugs”. She also claimed Chiwenga harboured ambitions to take over the presidency.

Ironically, Chiwenga had earlier also accused his wife of being a “drug addict” but Marry dismissed the claims, saying she was a better, healthy parent as opposed to an absentee father who stays more in hospitals than at home.

BY DESMOND CHINGARANDE

KWEKWE magistrate Story Rushambwa and clerk of court Bright Mpiyabo, yesterday had their case of illegally facilitating the release of a stolen vehicle to controversial businessman Shepherd Tundiya remanded to February 14 pending the finalisation of investigations.

Rushambwa (48) and Mpiyabo (45), who are being charged with criminal abuse of office, appeared before magistrate Francis Mapfumo for routine remand.

The duo is on $2 000 bail each.

According to court papers, sometime in September 2018 a Mercedes Benz vehicle was impounded from Tundiya by CID Kwekwe as it was suspected to have been stolen from South Africa and smuggled into Zimbabwe.

The vehicle was then handed over to Zimbabwe Revenue Authority (Zimra) for further management. It was then held pending finalisation of investigations by South African Police Service and possible settling of duty in terms of the Customs and Excise Act.

It is the State’s case that on December 9 last year, Tundiya made an ex parte application seeking the release of the motor vehicle and on the same day Rushambwa presided over the matter. He granted an order that the vehicle be released unconditionally to Tundiya.

It is alleged the order issued by Rushambwa was prejudicial to Zimra.

The State alleges the whereabouts of the vehicle are no longer known.

It is also alleged that sometime in October last year, a Toyota Hilux vehicle was impounded by the police anti-corruption unit from John Mapurazi.

The vehicle was taken as an exhibit in a case of fraud in Bulawayo after it was fraudulently imported into the country.

The State alleges the vehicle was then handed over to Zimra for customs management and finalisation of trial. It is alleged on December 27 last year, Mapurazi made an ex parte application seeking the release of the vehicle.

It is alleged Rushambwa then hatched a plan to order the release of the motor vehicle to Mapurazi. He allegedly in connivance with Mpiyabo withheld the record until Rushambwa who was on leave arrived at court to deal with the application.

The State alleges Mpiyabo then placed the record before Rushambwa well knowing he was on leave. Rushambwa, however, presided over the application in the absence of Mapurazi who was now being represented by Tundiya who is not a lawyer. The magistrate went on to grant the order for the release of the motor vehicle to Mapurazi.

The vehicle can no longer be accounted for.

BY CHARLES LAITON

HARARE-BASED freelance journalist, Doubt Asima, who was arrested in August last year on public violence charges after he was found rendering first aid to an elderly woman during an anti-government protest, has been acquitted by Harare magistrate Richard Ramaboea for lack of evidence.

According to the evidence presented in court, the elderly woman had been assaulted by police officers near Africa Unity Square during anti-government protests held on August 16.

During trial, Asima was charged together with one Fabian Mushunga, who was also accused of forcibly disturbing the peace, security and/or order of the public.

The State had alleged that Asima and Mushunga, who were represented by human rights lawyers Jeremiah Bamu and Tinomuda Shoko, engaged in acts of public violence by barricading some streets in central Harare with stones and boulders.

The State further alleged that the two men also threw stones at some police officers, thereby disturbing the free movement of the public and vehicles.

In his defence, Asima argued that his arrest and prosecution stemmed from police’s desire to conceal evidence of their brutality, which he had captured on his camera.

Mushunga said he was arrested while passing through town from Belvedere, adding he was not involved in the protests.

Ramaboea declined to put them to their defence and set them free.

BY DESMOND CHINGARANDE

A DEFENCE ministry accountant who allegedly stole US$20 million from his employer and went on a spending spree, buying four houses in Harare and 25 taxis as well as posh vehicles, was yesterday denied bail and remanded to February 11.

Simbarashe Zvineyi (36) appeared before magistrate Francis Mapfumo who remanded him in custody pending finalisation of investigations.

Zvineyi, who is also alleged to have channelled part of the money to the foreign currency parallel market, was advised to approach the High Court for bail.

Allegations against Zvineyi are that between January 2010 and December 31, 2019, he and Danison Muvandi who was a chief accounting officer in the same ministry, hatched a plan to defraud the government.

In pursuit of their plan on several occasions Muvandi, who is still at large, using his position and influence, allegedly misrepresented that there were classified operations to be carried out.

He allegedly instructed the chief accountant, Lameck Jackson, to deposit money into Zvineyi’s accounts at NMB Bank, CBZ, CABS and Steward Bank, using Zvineyi’s vendor number.

It is alleged, acting on the misrepresentation Jackson, transferred into Zvineyi’s bank accounts amounts ranging from US$40 000 to US$66 000 during the decade. The two would then allegedly share the money.

The State alleges that from investigations carried out so far, the Defence ministry has suffered prejudice of US$20 million and only four vehicles have been recovered.

On his second count Zvineyi, during the same period and acting in connivance with Muvandi and after they allegedly defrauded the Ministry of Defence, reportedly laundered the proceeds of the offence by acquiring various properties, which include more than 25 taxis, a Jeep Wrangler, a Isuzu KB300, a Honda Fit and a Toyota Vitz.

He also bought houses in Tynwald, Aspindale, Avonlea and Borrowdale.

Muvandi also allegedly acquired various properties some of which have been recovered.

George Manokore appeared for the State.

BY DESMOND CHINGARANDE

A HARARE magistrate yesterday said he would, on January 30, make a ruling on an application for discharge filed by two former Zesa bosses who together with ex-Energy minister Elton Mangoma, face corruption and criminal abuse of office charges.

Mangoma (64), former Zesa Holdings chief executive officer Joshua Chifamba (63) and Zesa Enterprise managing director Tererai Luis Mutasa (54) appeared before magistrate Francis Mapfumo on a charge of allegedly awarding a US$3 million contract to a South Korean company without following due processes.

The trio filed an application for discharge at the close of the State’s case.

In their application, the accused said the State had failed to prove essential elements of the alleged offence, adding that evidence led by witnesses did not prove that they showed favouritism to the South Korean firm.

Chifamba was represented by Oliver Marwa, Mangoma by Tonderai Bhatasara, while Givemore Madzoka represented Mutasa.

Allegations are that sometime in 2010, one Choi Young of Techno Company, met Mangoma at his government offices and they agreed to enter into a technology transfer partnership with Zesa Enterprises for the manufacture of switch gears.

It is alleged that Mangoma then instructed Mutasa to liaise with the South Korean firm with a view to establishing a partnership.

Mutasa then wrote to the State Procurement Board seeking advice on the procedures to be followed in such partnerships, and was advised to seek assistance from State Enterprises Restructuring Agency (Sera) on how to proceed.

It is also alleged that Sera advised Mutasa to prepare a memorandum which Mangoma was supposed to submit to the inter-ministerial committee on commercialisation and privatisation of parastatals, recommending the identification of a technical partner for the technological transfer through a competitive bidding process.

On receiving the business proposal memorandum and bid documents, Chifamba and Mangoma allegedly connived to by-pass the committee and the competitive bidding process as a means of showing favour and making sure that the South Korean company would automatically become the partner in the technology transfer agreement.

The State alleges that the trio proceeded to award the contract to the South Korean firm. As a result, Zesa Enterprises made an initial payment of US$850 000 to the South Korean firm.

Due to the trio’s actions, Zesa Enterprises allegedly suffered prejudice of US$850 000 and nothing was recovered.

SELF-EXILED former Cabinet minister and Zanu PF politburo member, Jonathan Moyo, has accused President Emmerson Mnangagwa’s government of systematically grabbing his property and others owned by G40 apparatchiks as punishment for refusing to recognise his administration.

BY CHARLES LAITON

Moyo made the claim in his court application yesterday, where he is challenging his eviction from his Mazowe farm by Agriculture minister Perrance Shiri.

He alleged that government grabbed his farm to “fix” him after he recently published a “hard-hitting” book, Excelgate, chronicling how Mnangagwa’s Zanu PF party rigged the July 30, 2018 general elections.

The former Higher Education minister, who twice served as government spin doctor in the late former President Robert Mugabe’s administration, claimed that he was last month served with an order to immediately vacate the Remainder of Patterson Farm measuring 622,9 hectares, although he had indicated to government that he purchased the farmland in 2002 for Z$6 million.

“This has been the case from the year 2004. I have always had problems with this farm whenever I have fallen out of favour with the ruling elite. The current problems can be traced to the political fallout leading to the ouster of RG Mugabe as President of the Republic,” Moyo said.

“I must point out that the military, led by the respondent (Shiri), announced that I was one of the criminals around the President who had to be weeded out. In the event, we were (weeded out).

“I also point out that the withdrawal (of the offer letter for the farm) has been made in the context of the publication, by me, of an academic book in which I expose what I consider to be the manner in which the 2018 elections were rigged. That the withdrawal comes hard upon the publication of that book is not a coincidence, particularly as it comes before I have exercised my full and effectual right to be heard.”

Early this week, Mugabe’s nephew, Robert Zhuwao, also petitioned the High Court with an application for review, challenging the withdrawal of his offer letter for his Zvimba farm.

In his founding affidavit, Zhuwao said he was offered the land under the land reform and resettlement programme back in 2004, but Mnangagwa’s government seized it in April last year on the basis of “false allegations”.

Moyo said the allegations that he had not been utilising his farm were false and could not be substantiated, more so taking into account that he was forced into exile after the military attempted to kill him and his family.

“The withdrawal of the offer letter is based on material falsehoods of a concocted alleged underutilisation of the land, which does not take into account the manner in which the State has sought to sabotage my investment for cheap political ends,” he said, adding: “… It, is however, unacceptable that the respondent’s administration can hound me out of the country and then turn around and say I have failed to utilise the land.”

He said it was also dishonest of the State to claim that a farm that had been fully utilised up until the November 2017 military coup was being underutilised.

“To what period does the under-utilisation relate, given that we are only in (2020)? How have the same officials that benefited from the 2017 military intervention separated the issue of that intervention and the political differences that exist between us from the farm issue?” Moyo queried.

“How can the issue of repossession of the farm only arise, since the year 2004, whenever I have problems with my political contestants?”

The former minister further said his relationship with Shiri had always been sour, given that the former Air Force of Zimbabwe commander has, in the past, labelled him a “liberation war deserter”.

“Respondent and I do not have an exactly cordial relationship … in a 2017 local paper’s publication, he falsely and maliciously referred to me as a liberation war deserter, with links to an outfit aligned to the Rhodesian security services. I do not trust that he can deal impartially with issues that relate to me,” he said.

“Further, his (Shiri) actions must be considered in their context. I was viewed by his administration as one of the chief enemies, leading to a siege on my house and a clear attempt to murder me and my whole family. That the issue of my farm has arisen in this context does not surprise me. That does not, however, make it legal or otherwise reasonably justifiable. It is in this context that I raise the issues that I place before the court for its determination.”

Turning to the issue of immediate vacation of the farm, Moyo said this was in breach of his proprietary rights and the government was not taking into account the close to US$1 million investment that he had sunk into the farming project.

He further said the decision was made without jurisdiction in that the State, having previously sought to acquire the land and having abandoned the process later, purported to once again acquire it in 2006, but he had already bought the same with the State’s consent and concurrence.

“… the offer letter was withdrawn on December 11, 2019 … the withdrawal was said to be with immediate effect.

It goes on to advise that I was to wind up all my operations and vacate the piece of land … I draw attention to the fact that the purported withdrawal comes right in the middle of the farming season after I had made serious investments totalling around $120 000,” he said.

“For reasons that are political, I have not been able to get any inputs assistance from the State and the investment, thus, made represents our unaided investment as a family. In this regard, second applicant’s (Beatrice Ambiyo Moyo) financial interests are directly imperilled.

“Finally, though noticing that I had in November expressed the intention to place before him (Shiri) my fuller submissions having been hampered by the fact of my being in exile and the well-known fact that my house had been attacked and ransacked by members of the Zimbabwe National Army during the November 2017 military intervention, respondent dismisses my desire to assist him make an informed decision and hastily proceeds to reach a conclusion on the matter.”

Moyo said the value of the farm had shot up to over US$723 000 because of his family’s investment.

“I point out that we are involved in both crop and animal husbandry and have, at the present moment, some 120 heads of cattle and 55 hectares of maize, 35 hectares of soyabeans and five hectares of sunflower,” the former Zanu PF and government spin doctor argued.

The matter is pending.