‘No going back on merger of diamond firms’

via ‘No going back on merger of diamond firms’ – NewsDay October 15, 2015

Government is going ahead with the consolidation of diamond mining firms operating in the country and companies have to come to terms with the development, Mines and Mining Development minister Walter Chidhakwa has said.


Government, which currently has 50% shareholding in diamond companies operating in Marange through the Zimbabwe Mining Development Corporation, wants all diamond mining firms in the country to be merged into one entity, the Zimbabwe Consolidation Diamond Corporation (ZCDC), to plug leakages and enhance transparency.

Government will have 50% ownership in ZCDC, while other players will proportionally share among themselves the other 50% stake. A number of companies have expressed reservation about the move citing the different investment levels made into the companies.

Speaking at the Zimbabwe Mining and Infrastructure Indaba 2015, Chidhakwa said government was not going back on the plan to merge diamond producers in line with rules and policies it has set.

“It’s easy to account for chrome or gold, but not diamonds. But we are moving ahead with consolidation, but hopefully the companies will realise that every nation has policies and rules and must abide by them.

“We will not allow our companies to participate in joint ventures that seek to violate the law, we will not allow them to do that,” Chidhakwa said.

“As long as this government is in operation, it doesn’t matter where you go. We have made a decision and that is what we are going to do.”

Chidhakwa said as part of the consolidation plan, the firms were simply required to comply with the Companies Act which stipulates that they should submit financial statements. To date, some had failed to do so, Chidakwa said.

Chidhakwa said he was not sure whether “we have a diamond sector”, adding that the four producers in Marange did not undertake exploration as they went for alluvial mining.

“As a mining company, you must have an idea on your mine’s lifespan and how to extend the life of a mine, but that did not happen and this is why we are in this situation,” he said.

Chidhakwa said consolidation of the diamond mining companies was feasible as mergers and acquisitions happen all over the world.

He added that the consolidation was important as currently some companies in Marange do not have the capacity to exploit for kimberlites.

Chidhakwa said nothing had changed in terms of application of the indigenisation legislation for the mining sector.

“I speak for the mining sector, the mining sector remains on 51: 49%. There is no change, there has not been a discussion and at the moment there is no discussion and I don’t think they will be a discussion on the 51/49%,” he said.

Despite mining diamonds in Marange, little has trickled into Treasury coffers. During the era of the inclusive government, then Finance minister Tendai Biti accused a coterie of individuals of helping themselves to the Marange diamonds and buying private jets.

“I am a government minister and earning $800. How do I buy some of the assets that we are buying? People are now buying private jets because of our diamonds,” he told delegates at a diamond workshop.