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Minister Walter Chidhakwa

THE government has told all diamond mining companies to immediately cease mining activities and vacate the mining concessions they were operating on. The development means there has been an instant restructuring of the Zimbabwe Consolidated Diamond Company (ZCDC) into a wholly State-owned entity from the previous proposal of a joint venture between the government and the nine diamond mining firms.

Following a briefing to the diamond firms by the secretary of Mines earlier yesterday, Mines and Mining Development Minister Walter Chidhakwa said that the decision had been made on the basis of the firms’ non-committal to the consolidation plan and the fact that they had all failed to renew their special grants.

“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.

“They’ve 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,” said Minister Chidhakwa.

To this effect the government has instructed the firms to co-operate in hand-over-take-over of all diamond products at the mines with the government personnel that have been deployed at the mines.

“All the diamond products will and must be recorded. Any diamond products that are not disclosed or found later will become government property,” he said.

Since 2008 special grants were issued to joint venture companies with the Zimbabwe Mining Development Company (ZMDC) namely Anjin, DMC, Jinan, Mbada, DTZ- OZGEO, RERA, Gye-Nyame, Kusena and Marange Resources.

Added the Minister: “Consultation with the existent diamond companies, which took over seven months to allow for extraordinary shareholder general meeting achieved no consensus between the 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.”

Indications are that of the nine diamond firms only Marange Resources accepted the consolidation proposals, while DMC and Jinan turned them down.

The other firms were “dragging their feet” and some investors in the joint venture companies, namely Grandwell and OFECC are said to have made unilateral submissions to the government opposing the consolidation proposals.

According to Minister Chidhakwa the new wholly government entity will take over all diamond operations in the country including the Zvishavane claims being exploited by Murowa Diamonds and the Beitbridge diamond kimberlites currently under River Ranch Diamonds.

“All diamond mines, either current or future ones will all be under the ambit of ZCDC (Pvt) Ltd. The current scope of consolidation includes, but is not limited to, the following: all concessions, which fall under the current Chiadzwa diamonds fields (both operating and mothballed); all T-concessions, which are still to be explored further; the Chimanimani diamonds fields currently being mined by DTZ-OZGEO; Zvishavane diamond kimberlites currently under Murowa Diamonds; Beitbridge diamond kimberlites currently under River Ranch Diamonds and others which are yet to be discovered or operationalised,” he said.

“What we now expect to happen is that the shareholders must sit and put their shareholders agreement in front and say what does the process of dissolution entails. They may not want to close down the company but they may want to say, let’s share the company in the proportions agreed in the shareholding agreement . . . let’s share the assets and the liabilities as well.

“Because for your own information there are companies which have statutory obligations that hadn’t been paid for quite some time. The companies must then sit as shareholders and agree on how to apportion both the assets and the liabilities of the companies. What we’ve merely done is to take away the concessions.”

Declining payments to the government and investment pledges defaults official figures show that benefits from the diamond sector have been declining gradually since 2011. In 2011, the government received payments from the diamond firms amounting to $168,5 million, which declined to $142,4 million in 2012 and $93,2 million in 2013. In 2014 payments to the government amounted to $84.3 million, which further declined to $23.4 million last year.

The minister charged the companies for making investments that were not adequate to go beyond mining the alluvial resources at Chiadzwa.

“Anjin pledged as per the joint venture agreement to invest $132.2 million, at the moment we don’t know how much has been invested because the company has never given us audited financial accounts and we’ve asked for them and we haven’t received any audited accounts from them.

“DMC pledged to invest $50 mil- lion and $41 million was actually invested. Jinan $200 million was pledged and $137 million was invested. Mbada Diamonds a $100 million was pledged and $48 million was invested,” said Chidhakwa. — BH24.