Zim ‘Shocked’ with Accounts of Diamond Mines

Harare: Zimbabwe’s auditor general Mildred Chiri has revealed in her latest government audit report that she was “shocked” to find that most diamond mining companies in the Marange area have been operating “in the red” since 2013.

NewsDay reports that the companies had their current liabilities exceeding current assets by a wide margin. On Marange Resources, auditors discovered that the company incurred a net loss of $1 492 755 in 2014 and $30 464 985 a year earlier.

“As at that date, the company’s current liabilities exceeded its current assets by $74 749 172 and in 2013 it exceeded by $73 920 980,”she said.

“The total assets exclude the value of the mineral reserves, and these conditions along with other matters indicate the existence of a material uncertainty that may cast doubt about the company’s ability to continue as a going concern.”

Chiri said the Minister of Mines and Mining Development subsequently appointed a team to carry out investigations into the affairs of the company where the senior management were sent on leave to pave way for the investigation to be conducted.

She also revealed that Mbada Diamonds had recorded a loss of $49 651 489 in 2013, down from a profit of $56 015 647 posted in 2012, while its current liabilities exceeded its current assets by $89 916 504 in 2013.

“Management did not present a clear turnaround plan on how the company would be able to raise funding to pay its liabilities as they fall due and bring the joint venture to profitability,” Chiri said.

“The joint venture may be unable to realize its assets and discharge its liabilities in the normal course of business.” Harare had since moved to consolidate operations of all diamond mining companies in Marange to promote transparency and stop leakages.