15 December 2017

Zimbabwe: Diamond Firms in Comeback Talks

Photo: The Herald
Diamonds (file photo).

Mining companies that were chased away from Chiadzwa after government terminated their licences and consolidated the diamond industry are now negotiating a comeback following the fall of former president Robert Mugabe, the Zimbabwe Independent has heard.

In February 2015, government moved to consolidate the diamond mining industry and ceased operations for the other six companies that had been granted joint venture mining rights with the Zimbabwe Mining Development Corporation (ZMDC).

Special grants in Chiadzwa were issued to Anjin, Diamond Mining Company, Jinan, Mbada Diamonds, DTZ Ozgeo, Rera, Gye-Nyame, Kusena and Marange Resources.

However, government ceased mining operations for all the companies and issued them a 90-day-ultimatum ordering them to halt operations for rejecting a proposal to amalgamate the sector.

Mining sources said this week Mbada and Anjin have stepped up negotiations with government so that they can be allowed to resume mining operations.

"The diamond mining companies are negotiating with government so that they can be allowed to resume mining," a source said.

The sources also said Anjin is using its military links to engage with government so that it can be allowed to begin mining operations.

"Anjin did not shut down its offices in Zimbabwe," the source said, adding: "They only moved to Longchen Plaza in Harare and kept on operating."

The then mines minister Walter Chidhakwa said all diamond mining operations in the country would be under one firm in which the state will have 50% shareholding, amid concerns of transparency and accountability in the extractive industry.

"Since they no longer hold any title, 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," Chidhakwa said then.

Since the seizure of its mining rights, Mbada has dragged the ZCDC to court over the abuse of its equipment and the looting of diamond ore.

Mbada and Anjin took the ZCDC to court over the illegal acquisition of the mining rights. The legal battles that ensued resulted in the ZCDC failing to meet its monthly production target of 200 000 carats.

Mbada, through the High Court, obtained a court interdict stopping the ZCDC from looting its ore dumps.

In the application, David Kassel, chairperson of Grandwell Holdings (Pvt) Ltd, a company which owns a 50% stake in Mbada, said the ZCDC executive was looting its ore, as well as diamonds which were in the vaults.

Since the ZCDC took over, diamond production has plunged, eroding revenue, a development which has impacted negatively on the country's economy.

In a move aimed at improving production levels, government has also reached an agreement with Jinan Diamond Company to cede its mining concessions to the ZCDC.

This article is part of an ongoing ground-breaking investigation into the Marange alluvial diamonds discovery and subsequent plunder at various stages by state and non-state actors. The special series is supported by the Investigative Journalism Fund.

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