Govt moves to consolidate diamond mining sector

Govt moves to consolidate diamond mining sector

Source: Govt moves to consolidate diamond mining sector | The Herald May 3, 2017

Happiness Zengeni in PERTH, Australia
Government will now fully consolidate the diamond mining sector after resolving all legal issues with Chinese companies which were mining in the Chiadzwa area and agreeing to a compensation figure with Russian company Development Trust of Zimbabwe-Econendra of Russia (DTZ-OZGEO).

Mines and Mining Development Minister Walter Chidhakwa told journalists on the sidelines of the Kimberly Process Intercessional meetings which started in Perth, Western Australia on Monday that all legal issues around the consolidation of the diamond mining sector particularly with the Chinese companies.

The diamond mining firms which operated at Chiadzwa for many years did not benefit the country and at one time, President Mugabe bemoaned the prejudice of $15 billion in revenue the country suffered.

Consequently, Government merged diamond mining companies previously operating in Chiadzwa and Marange into ZCDC as the State moved in to ensure accountability. This triggered some court actions as some miners resisted eviction arguing the move was unlawful.

As a result, Zimbabwe’s diamond production declined by 62 percent to 924 388 carats (almost 185kg) last year due to court cases filed by evicted miners resisting Government’s decision to consolidate the sector

Seven companies operated in Chiadzwa/Marange namely Mbada Diamonds, Anjin, Marange Resources, Gye Nyame, Kusena, Jinan and the Diamond Mining Company and were set to merge into one entity where Government would hold 50 percent.

“I am very happy to note that all the legal issues have now been resolved particularly with the Chinese in relation to the activities of Jinan and Anjin. Jinan have already dismantled and taken away their equipment.”

Minister Chidhakwa said that his ministry was now finalising with Anjin although the legal issues, in particular, the application at the constitutional court had now been “dealt with” as the matter was withdrawn.

“We are proceeding on a very amicable path; the path that the Chinese Ambassador and myself started a few months ago.“As friends, I am happy that we were able to go over the hurdles and settle the matter.”

Minister Chidhakwa said that in relation to DTZ-OZGEO, an agreement had been structured where Government would pay $5,4 million to the Russians and also handle the company’s creditors.Government also acquired some of the mining equipment being used by the Zimbabwe Consolidated Diamond Company from the former mining companies

“All in all, we are on the right path towards consolidation. No one is fighting with us anymore….what remains is the vigour to go on the ground and be able to unlock full value particularly on the conglomerates.”Minister Chidhakwa said the outlook had been further boosted by the $80 million capitalisation provided by the Reserve Bank of Zimbabwe.

“As focus shifts from low-value alluvial to full-scale lucrative conglomerate and kimberlitic diamonds mining, the RBZ has availed an $80 million facility to allow ZDC to purchase the required equipment in Belarus and for working capital needs.”Recent projections estimated that if ZCDC is fully capitalised, production can exceed more than two million carats a year.