23 February 2016

Zimbabwe: Diamond Firms Get 90 Days to Wind Up

Photo: Denford Magora
Marange Diamond Fields

Government has given diamond mining companies in Chiadzwa and Chimanimani 90 days to remove their equipment and other valuables from the mines after it stopped their operations yesterday.

The firms whose mining special grants expired and were not renewed will, however, be expected to hand over all diamond products to Government personnel who have been deployed there.

Mines and Mining Development Minister Walter Chidhakwa announced this development during a Press conference in Harare yesterday.

Representatives of the mining firms attended the Press conference after the decision had been announced to them earlier in the day.

Special grants in the two areas were issued to Anjin, Diamond Mining Corporation, Jinan, Mbada Diamonds, DTZ Ozgeo, Rera, Gye-Nyame, Kusena and Marange Resources

"Since they no longer hold any titles, these companies were notified this morning to cease all mining activities with immediate effect and to vacate the mining areas covered by special grants for diamonds," said Minister Chidhakwa.

"They have been given 90 days within which to remove their equipment and other valuables. During this period, access into the premises will be by request, which will be considered by the Ministry of Mines and Mining Development."

Minister Chidhakwa said Government decided to consolidate all diamond mining in Zimbabwe into one company -- Zimbabwe Consolidated Diamond Company to improve efficiency and accountability.

He said this was the trend in other diamond producing countries in the region such as Botswana, Namibia and Angola.

He said the consolidated company's mandate was carrying out exploitation, mining, marketing and value-addition programmes for the diamond resource in Zimbabwe.

Minister Chidhakwa said it was therefore important for Government to consult all stakeholders in order to come up with an inclusive and mutually beneficial consolidation process.

"Consultation with the existent diamond companies which took over seven months to allow for extraordinary shareholder general meetings achieved no consensus between Government and the companies on the consolidation issue.

"There was evidence of the desire by the companies to extend the process of negotiation for undeterminable periods at a time when the industry is in decline and definitely in trouble. This was not and remains an unpalatable choice for the Government.

"Marange Resources, DMC and Jinan held EGMs. Marange Resources accepted the proposals. DMC and Jinan decided against the consolidation proposals. Mbada and Anjin have been dragging their feet and have up to now not formally made their decision.

However, the investors in the JV companies, Grandwell and AFECC, respectively made unilateral submissions to the Government opposing the consolidation proposals," said Minister Chidhakwa.

He said Government had shut its doors for further negotiations with the firms since they did not show interest in consolidation for the past seven months.

Minister Chidhakwa said the consolidated firm was meant to benefit both the companies and Zimbabwe.

He said the consolidated firm would own concessions in Chiadzwa, Zvishavane diamond kimberlites currently under Murowa and Beitbridge diamond kimberlites under River Ranch Diamonds as well as those to be discovered in future.

"For seven months, we opened our doors. For seven months, my teams tried to talk to the companies. For seven months, we did not get a positive response. Surely what more opening of doors would one ask for? No, we will not reconsider. This is the final position of Government.

"I want to say this is in one way a sad day and in another way a good day. A sad day because we have to part ways in this manner. We extended a hand of friendship to the companies. We said we wanted to work with you in one big happy family.

"We said we wanted you to pool your resources -- financial as well as technical and technological. And we said we would make available to all of you as one big family, as one big company, we said we would make available to you all the diamond deposits from Zambezi to Limpopo," said Minister Chidhakwa.

He said, however, all the companies still refused, in the process leaving Government with no choice but not to renew their licences.

The minister, who was flanked by Home Affairs Minister Ignatius Chombo and Mines permanent secretary Professor Francis Gudyanga, said it was now incumbent upon the consolidated company to deliver and contribute to the economy.

Government owned 50 percent shareholding in all the companies except Marange Resources it wholly owned.

Minister Chidhakwa said it was therefore inevitable that the companies came up with mechanisms to share their assets and liabilities such as statutory obligations and salaries.

A Chinese national who probably represented Jinan or Anjin Investments queried if Government was not breaching an investment agreement between the Zimbabwean Government and the Chinese government where the two countries were expected to protect investments by their countries.

He added that Government had not invited them to renew their licence.

But Minister Chidhakwa said the agreement did not allow companies investing in either countries to defy the law.


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