How Canadile syphoned Marange diamonds

By Phyllis Kachere and Itai Mazire
DIAMONDS worth over US$100 million are believed to have been smuggled out of the country by Canadile Miners and sold on the black market with part of the proceeds being pocketed by company officials under the guise of loans. The rest of the money was reportedly laundered back to Zimbabwe and used as working capital by Core Mining shareholders who went into partnership with the Zimbabwe Mining Development Corporation to form Canadile Miners.
Blacklisted gold and diamond smuggler Marco Chiotti, a South African of Italian descent based at Manica in Mozambique, has been fingered as the man behind the illegal sale of the diamonds and laundering of the proceeds.
The estimated US$100 million loss was a result of undeclared diamonds that were illegally sold on the black market plus another 29 000 carats of gem quality diamonds worth US$29 million which Core Mining shareholders failed to account for.
Related storyPart of a confidential report compiled by the ZMDC investigations committee seen by The Sunday Mail reads: "Core Mining has failed to discharge its obligations related to the foreign capital investment, which it undertook to make in the joint venture agreement. The committee reasonably believes that Core has funded the working capital requirements of Canadile through the illicit sale of diamonds, and has caused the proceeds of the illicit sale of diamonds to be recorded as shareholder loans and not as equity investment.”
Core Mining was being fronted by the incarcerated Lovemore Kurotwi, who is now facing trial for illegally selling diamonds.
It is understood that Chiotti would illegally sell diamonds mined at Chiadzwa on the black market and shuttle back to Harare to deposit various amounts into Canadile’s bank account.
Kurotwi would then withdraw those funds and distribute most of the funds amongst Core’s shareholders as loan repayments with the remainder being ploughed back into the mine as working capital.
“From September to December 2009 Chiotti endlessly shuttled between Harare and Mutare to raise capital injected into Canadile in figures of $4 000, $5 000 and $10 000 totalling $694 000 by December 31 2009 .
“The frequency of the shuttling and the values of the deposits suggest that the working capital of Canadile at this time was raised through the illicit sale of diamonds conducted by the shareholders of Core, a clear act of money laundering,” noted the report.    
The report also states that given the active role that Chiotti had in making cash deposits into Canadile’s bank account and petty cash account, he was involved in the smuggling of diamonds mined by Canadile.
After selling the diamonds, the proceeds would be injected into Canadile’s account and later withdrawn as shareholder loans.