HARARE – Zimbabwe National Water Authority (Zinwa)’s top management has been fingered in an extortion scam under the guise of a de-silting programme that has seen them demanding shares in mining firms operating close to rivers and dams.
According to miners who spoke to the Daily News, the Zinwa officials have threatened not to renew their water licences and influence the closure of mines operating close to any water source, if they do not sign a memorandum of agreement (MoU) with UniZin Resources (UniZin).
“We are being made to sign these papers with the Zinwa people in return for protection. A lot of investors are now withdrawing their investments from small-scale mining due to the extortionist nature of UniZin,” said a miner who preferred anonymity.
According to the MoU which is being forced on to miners and seen by the Daily News, UniZin is described as a commercial arm of Zinwa, with expertise in mineral recovery, sand processing, ?development projects, management and undertaking exploration and mining activities, a claim denied by the ministry of Water.
Zinwa’s executives Samuel Sunguru, Marcos Jinya, Eneas Nhidza are listed as company directors of Unizin, which they claim is owned by the water authority despite Samuel Juru — a non Zinwa employee — being listed as the controlling shareholder.
Minister of Water Resources Development and Management Samuel Sipepa Nkomo professed ignorance of the company and said it had no blessings from his ministry.
“I am not aware of any company by that name,” Sipepa Nkomo said.
“It is the first time I am hearing of it. As Zinwa falls under my ministry any activity they would want to venture into should be approved by my ministry and this was definitely not approved.
“It is not sanctioned by the ministry. The only company that I know and was approved is Livewater which has seen them venturing into bottled water,” he said.
According to the nine-page MoU seen by the Daily News, Unizin proposes a joint venture company (JVC) skewed in its favour, with the special grant applied for at the miner’s expense, but granted under its name.
“The parties intend to establish a joint venture company for the purpose of undertaking the project. Investor (claim or mine owners) will hold a 49 percent stake and Unizin the remaining 51 percent in the JVC,” the document reads.
The agreement also requires the mine or claim owners to contribute all the required funding capital for the JVC, with an initial capital required being the sum of $1,5 million.
“UniZin’s contribution to their shareholding shall be their technical expertise, as well as their institutional and other support as shall be necessary to procure any regulatory approvals and security for the project Investor contribution to its shareholding shall be the injection of capital, for both recurrent and capital expenditure (the purchase of all necessary equipment) and the joint monitoring of infrastructure development for the purpose of the setting up of the project.”
On top of the demands, the national water authority management is also claiming that miners pay a non-refundable $15 000 fee for an assessment of their mining sites, with a feasibility study also being included at a cost of $15 000.
Miners are also being asked to fund the cost of site visit for the assessment of their water licences.
In written responses to the Daily News, Zinwa management denied any wrongdoing and said UniZin was recently constituted and has not yet started operations, thus not yet entered into any partnerships as it is still laying out its modus operandi.
“UniZin is a joint venture company between Zinwa and Universal Recovery (Pvt) Limited (Universal) and its establishment is being finalised,” said Zinwa.
The management argued that the company — which was established in October 2012 — will be earmarked for de-silting major rivers and reservoirs in Zimbabwe.
“As you might well appreciate, there is a lot of siltation occurring in our river systems and dams and we are losing a lot of water. The changing climatological conditions are impacting negatively on the rainfall patterns, hence poor crop yields. Effective water resources management, which includes water harvesting is therefore of paramount importance,” said Zinwa management.
“To this end, Zinwa recently acquired drag-lines to use in the de-silting programme so as to improve river flows and water storage. The initial arrangement was that Zinwa would just de-silt the rivers and dams and then UniZin (in which Zinwa had no shares) would recover minerals from the silt but this never took off the ground as there was no de-silting machinery then.
“Zinwa realised that it would gain mileage if it got involved in the mineral recovery process as the revenue obtained from there would be ploughed back into the de-silting programme, thereby sustaining the programme since there is no budgetary allocation from the government,” said the management — adding that the reconstitution would see Zinwa owning 80 percent shares and universal 20 percent.
The Zinwa management highlighted that the Zinwa Act does not preclude the water authority from venturing into activities related to its core business of water resources planning, assessment, development and management.
“Zinwa intends to de-silt its river systems and reservoirs and intends to recover minerals, if any, from the silt; the revenue of which will be ploughed back into the programme in order to sustain it as mentioned above,” they said.