Diamond firms agreeable to merger

via Diamond firms agreeable to merger | The Herald March 17, 2015 by Lloyd Gumbo

ALL seven diamond mining firms in Zimbabwe are agreeable to a merger into one giant company, where they will share 50 percent shareholding among themselves with the Government owning the other half.

President Mugabe has been on record saying consolidation of diamond mining would plug leakages.

Mines and Mining Development Minister Walter Chidhakwa, yesterday met all diamond firms in Chiadzwa, Murowa Diamonds in Zvishavane and DTZ Ozgeo in Chimanimani to get feedback on whether they wanted to be part of the merger or not.

In the new arrangement, Government’s 50 percent shareholding will be anchored on the natural resource that it owns.

“The companies said they are agreeable to the Government policy on consolidation, but what they asked for is that they want to be involved in the structuring of the company so that it also reflects their interests and the business side of it,” said Minister Chidhakwa after yesterday’s meeting.

“We are in agreement with them on that because the company that will be formed is going to be business-oriented.”

Minister Chidhakwa said all the companies would this week meet with officials from his ministry and the Zimbabwe Mining Development Corporation individually to work out the structuring mechanisms.

He said Murowa Diamonds and DTZ Ozgeo were also in support of the merger though the former requested for a meeting with him today.

Marange Resources acting chief executive officer, Mr Mark Mabhudhu, concurred with Minister Chidhakwa.

“The discussion was around how to approach consolidation from a perspective of each operator and we all agreed that what Government wants to do is acceptable.

“We are now going to be working on operationalisation. Meetings between individual companies and ZMDC and the ministry have been scheduled during the course of this week.

“Officials from ZMDC and the ministry will give feedback to the minister at the end of the week and then next week we move to the next level. It was a cordial meeting. Everyone was happy,” said Mr Mabhudhu.

Diamond Mining Corporation general manager, Mr Ramsy Malik, said the meeting allowed companies to air their views.

“Minister was receptive to all inputs as long as they contribute to successful implementation of the consolidation programme.

“Minister gave the companies the opportunity to come up with proposals and to hold discussions with ZMDC to map the way forward,” he said.

Minister Chidhakwa last week told the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment chaired by Zanu-PF MP for Gokwe-Nembudziya, Justice Mayor Wadyajena, that non compliant firms would cease diamond operations in Zimbabwe.

“This is a regulatory matter and we have said to them, the only way you can participate in diamond mining in Zimbabwe is by being in this company.

“If you do not want to be in this company, we might have to work out methods of parting ways, kind of compensations that we need to give to those who may not want to be in this company,” he said last week.

Minister Chidhakwa said reasons behind the merger were to ensure security of the precious gems and accountability.

There has been concerns in Government that some diamond mines have been getting a bigger chunk of money from the sales of gems but understated what was due to the State.