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PRIOR to its amalgamation with other diamond producers in the Chiadzwa Diamond fields, Marange Resources had liabilities in excess of $90 million and was on the verge of shutting down.

Former CEO of both Marange Resources and the Zimbabwe Consolidated Diamond Company (ZCDC) Mr Mark Mabhudhu told the Parliamentary Portfolio Committee on Mines and Energy yesterday that Marange was on the brink of insolvency before the merger early last year.

“Marange had lots of creditors at the point that this process (the merger) was commenced, to the extent of around $90 million, maybe reaching $95 million.

“The reason stems from some previous arrangements which did not work well, for instance getting a loan from the bank they apply interest and you expect to produce but production doesn’t happen,” he said.

He added that some of the monies accrued were Zimra (Zimbabwe Revenue Authority) penalties.

“But technically the operation was really close to running insolvent.”

Marange was wholly-owned by the Zimbabwe Mining Development Corporation — which also had stakes in all the other diamond mining companies.

It was one of the companies granted licences to mine diamonds discovered in the Chiadzwa area of Manicaland.

The others are Chinese-owned Anjin, Mbada Diamond Mining Company, Gye Nyame, Kusena, Jinan and Diamond Mining Company.

Mr Mabhudhu however said Marange showed significant improvement in terms of production within the framework of the merger, as it yielded 1,5 carats per tonne of ore mined compared to the other mines which produced an average of 0,5 carats per tonne of ore mined.

According to the ZCDC’s production trends, the merged entity produced over half a million carats (that is, an average of 170 000 carats per month) at an average price of $86 per carat.

Mr Mabhudhu however did not last in the ZCDC job after he was dismissed two months into his role and told the Parliamentary Committee that he has unsuccessfully tried to engage ZCDC chairman Professor Francis Gudyanga over the past nine months.

The case is now in the courts.

The disenchanted CEO — who was dismissed alongside several other executives at ZCDC — lamented a perceived lack of experience of the executive that replaced his, saying it had less than 10 years diamond mining experience compared to the combined 127 years diamond experience that the dismissed executives had accumulated. — BH24