Zim nationalises diamond mining

via Zim nationalises diamond mining – NewsDay Zimbabwe March 13, 2015

HARARE — Zimbabwe will bring all diamond mining operations in the country under one firm in which the state will have a 50% shareholding, mines minister Walter Chidhakwa announced on Thursday, adding that the miners have until Monday to accept the proposal.

President Robert Mugabe’s government has stakes of varying degrees in all firms operating in the Marange fields on the eastern border with Mozambique, but the new proposal could see Rio Tinto Plc’s Murowa Diamonds, which operates in south-central Zimbabwe, coming under government control.

Murowa, 78% owned by Rio, with the balance owned by Zimbabwean-listed spin-off RioZim, produced 344 000 carats of predominantly gem-quality diamonds in 2014.

Chidhakwa told a parliamentary portfolio committee on youth indigenisation and economic empowerment that the state would own 50% of the new entity, which would include seven miners in Marange.

“At some point we started by saying we will first merge Gye Nyame and Kusena concession into Marange. But we have realised that it is actually better just to bring everybody together in the first instance,” Chidhakwa said.

Gye Nyame Resources, a joint venture between the state-owned Zimbabwe Mining Development Corporation (ZMDC) and Bill Minerals, represented by Ghanaian businessman William Ato Essien, had its licence revoked last year due to insolvency and failure to adhere to environmental requirements.

The company, which was granted mining concessions in Marange in 2011, was placed under final judicial management last June.

Other miners in the Chiadzwa area include Marange Resources, Diamond Mining Company (DMC), Anjin, Jinan and Mbada Diamonds.

“The new structure was given to them on Monday to consult their boards of directors. They will be coming back on Monday to tell us the outcome of their discussions with their boards. But we are very clear, 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,” Chidhakwa said.

He added that government was ready to buy out mining companies that are not willing to be part of the consolidated unit.

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

“I expect that on Monday, we will be meeting with the companies so that we hear the positions of their shareholders and we know who will be proceeding into the future and who will not be with us as we go into the future.”

He said while some mining companies have run out of alluvial diamonds deposits at some concessions allocated to them, Zimbabwe still has viable reserves of the precious stones.

“Because government already owned 50% in each and every one of these companies except in the case of Murowa, but Murowa was also expected to comply with the indigenisation and economic empowerment act,” he said.

The mining sector had been the most dynamic sector of Zimbabwe’s economy over the last five years, with an average annualised growth of 35%.

“We are not cancelling their mining licences but that would be ultra vires the law but we are saying let us together form one big company and you own a lesser percentage of a bigger company. Getting all this to be agreed upon and getting all the shareholders to buy in is a process that you must go through so that as you forward, you move forward with everybody,” Chidhakwa said.
—The Source

COMMENTS

WORDPRESS: 8
  • comment-avatar
    mupurisa 6 years ago

    Is this nationalisation or Zanu-lisation?? In any case, what’s the difference?? They already have the levers of power, and as things stand, they are dictating our bleak future!?? Hameno Zvedu??

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    “… and you have until Monday to decide.”

    Huh, how can you do this without auditing each firm to determine it’s true worth? That process alone would take several months and be essential to determining how much of the consolidated company would be controlled by each entity.

    From what I’ve read, these firms have been less then forthcoming with any financial information. If government already owns 50% of all but one company, then why hasn’t government been getting 50% of the profits all along? How is it that a 50% shareholder of a company (government) does not know how much money the company made last year, nor where the profits went?

    How will government come up with the vast sums of money to compensate those companies that do not wish to be absorbed into this new company when it cannot even pay it’s own workers?

    Lastly, now that the alluvial diamonds have all been taken away from right under the nose of government and without any appreciable benefit to the people, isn’t this a case of bolting the gate after the beast has already left?

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    One thing I’ve always wondered about is Zimbabwe’s preference for 50% shareholding in diamond firms? Why doesn’t government simply create a supervising authority to audit and collect an extraction tax on all diamond mining and gold and platinum mining activities, like most other countries do? That way everything is out in the open and every penny is accounted for – and the citizens feel as if the resource belongs to them all.

    Why burden government with the intricacies of investing in equipment and other assets and tracking their values? Besides, ZANU-PF has demonstrated over and over again that they do not know how to run a profitable company.

    However ZANU-PF likes the 50% shareholding concept because it gives them much more opportunities for leakage and corruption through patronage. It’s much easier for a company to declare that there are no profits to remit to government if their dishonest directors serve at the pleasure of the President.

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    born 'free' 6 years ago

    ok. good! Then garantie free education and medical aid to All kids under 16 from from the profits.Put the money in your pockets , then one day we will remind you want the french did 1879 , if you failed in history. well tell us to eat cakes if we do not have bread on the table!

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    Zimbabwe-Mugabe-Gushungoland, the land of contradictions. Just last week Honourable Minister of Finance (Chinamasa) told the whole nation & the world that no more diamond exists in Zimbabwe. For all we know when we talk of diamond in Zimbabwe we are talking of no other place but Chiadzwa; and we were openly told Chiadzwa is now finished, at least for the Zimbabweans in general – amashefu achiko madiamond. Now another Honourable minister (Chidhakwa) is talking of nationalizing diamonds – apizvee avakuda kunationaliziwa isu takataurigwa kuti nothing is left for the povo?

    So, which one of the two is serious “Chinamasa” here kana kuti “Chidhakwa”. But Chinamasa is a satisfied clown, yet by the same token the latter’s name is equally unpalatable “chidhakwa”. Haaa, the name and also the history of this guy is enough to send shock waves through the spine of any reasonable being.

    My take is the two are just trying to outdo each other in clowning.

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    Fundani Moyo 6 years ago

    This is the best way to chase investors away. When will we ever have law and order in this country? How does one give a company one day’s notice to make such a major decision? Another highway robbery for this company – thousands of its employees will be jobless. So much of Indigenisation!

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    chimusoro 6 years ago

    The land is ours!

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    LOL, “chimusoro” – go down to the beer hall, shake your fist, shout a few slogants, chant a few pamibiris – and all will be well and you will feel much better!

    In reality this is just another cockup by the ZPF thieves. Why not do as Botswana does with Denswana? The answer – because then there’s no opportunity for looting and theft, and if there’s no opportunity for looting and theft then ZPF is definitely NOT INTERESTED