via ‘Diamond mining firms risk losing shares’ | The Herald November 3, 2015
Diamond mining companies that fail to make financial contributions relative to their shareholding risk losing their shares in a new consolidated diamond mining entity, a Cabinet minister has said. Mines and Mining Development Minister Walter Chidhakwa said this on Friday last week in Zvishavane, Midlands Province, after touring Murowa Diamond Mining Company.
The Minister who was accompanied by his Deputy, Fred Moyo said the new company has already been registered as Zimbabwe Consolidated Diamond Mining Corporation. The new firm will run the affairs of all the various diamond mines in the country. Minister Chidhakwa said his visit to Murowa marks his first familiarisation tour of kimberlitic diamonds.
“Those companies that fail to follow their rights, meaning to say companies that fail to raise the percentage contributions in monetary terms would forfeit their shares and their shares would be bought by other companies. “So this is the model that we have adopted, it is a model that also recognises that the successor company will inherit both the assets and liabilities of the merged company”, said the minister.
Minister Chidhakwa said his ministry has been mandated by Government to proceed with the necessary procedures of establishing a single entity. “Government has already given us a directive to proceed with the consolidation process. We will determine the total asset (base) of the companies,” he said. The various diamond mining firms will acquire shares in the consolidated mining company in proportion to the net value of their assets.
There are ten diamond companies operating in the country with the majority mining alluvial diamonds in the Marange area. Those located in Marange area include Marange Resources, Mbada Diamonds, Anjin Resources, Diamond Mining Company, Gyne Nyame, Kusena and Jinan. Other diamond mining companies comprise Murowa in Zvishavane, River Range Mines in Beitbridge and DZ Ozegeo in Chimanimani.
However, alluvial diamond mining firms in Manicaland especially in Marange/Chiadzwa might struggle to comply since some have no assets as the companies relied on hiring equipment to do the alluvial mining. The companies have also failed to comply with funding pledges made to community share ownership schemes.
Production in the area has declined after the alluvial diamonds ran out while indications are that the companies do not have money to mine deeper-lying kimberlitic diamonds.