‘Diamond mines consolidation illegal’

FORMER Zimbabwe Consolidated Diamond Company (ZCDC) chief executive officer, Mark Mabhudhu, has railed against the government’s rushed decision to merge mining firms in Chiadzwa, saying the move violated property rights and disturbed production.

Source: ‘Diamond mines consolidation illegal’ – NewsDay Zimbabwe February 7, 2017


Giving oral evidence before the Parliamentary Portfolio Committee on Mines and Energy, Mabhudhu said although he was part of the technical team that structured the consolidated group before being kicked out last year, the manner in which the idea was pushed affected mining activities and caused investors to lose confidence in the country’s mining sector.

“If you look at other countries like Botswana, they are giving new concessions and mining rights to new players, the same is happening in South Africa. To me, what ought to have been the case was to standardise the process, so that you have an output whose process is standard. And have a same value for your gems and not to consolidate,” he told the Jenipher Mhlanga-led committee.

“This process had challenges as some players resisted it, and this, to me, presented challenges to do with property rights and you have to negotiate, something which could have been done better,” he said.

The former Marange Resources head was kicked out of ZCDC in June last year, barely two months after being appointed.

He said when he assumed leadership of the group, he put up a strategic plan that would have seen diamond production in the country increase, while reducing costs.

He told the committee that Mines permanent secretary, Francis Gudyanga, who was then ZCDC board chairman, should not be allowed anywhere near the deal, as he did not have an appreciation of the diamond sector.

The government in 2015 ordered all diamond mining firms in Chiadzwa to stop production, as it pushed for consolidation, but some firms rejected the move and have taken the State to court over the matter.

The former ZCDC boss said after his ouster, the parastatal was left with inexperienced people.

In his presentation, Mabhudhu told the committee that production levels at Chiadzwa were declining, as well as the quality of the diamonds.

He said during the early years of mining, companies would get four carats from a tonne of ore, but today, they were extracting a maximum of 0,15 carats from the same tonnage.