Updated – Govt shuts down Marange diamond miners for resisting nationalisation

Updated – Govt shuts down Marange diamond miners for resisting nationalisation

HARARE, February 22 (The Source) — The Zimbabwe government on Monday ordered all diamond miners in the east of the country to shut down operations after they declined its proposals to nationalise the industry, adding that their operating licences had expired.

The state has sought to bring all diamond mining operations in the country under one firm in which it would hold a 50 percent shareholding after accusing the miners of failing to account for revenue from their operations.

There eight miners in Marange, including Anjin Investments, Diamond Mining Company, Jinan, Kusena, Marange Resources and Mbada Diamonds. The government holds 50 percent shareholding in all the firms.

Mines minister Walter Chidhakwa told a press conference that the miners had declined the state’s invitation to the new government dominated firm — a move his finance counterpart Patrick Chinamasa said earlier was necessary to bring accountability to the murky dealings in the sector — and that they had failed to renew their operating licences.

“Special grants that were issued to Anjin, DMC, Jinan, Mbada, DTZ-OGEO, RERA, Gye-Nyame, Kusena and Marange Resources in terms of section 291 of the Mines and Minerals Act (Chapter21:05)  for diamonds mining have since expired. These JC companies neglected or failed to renew the special grants. Some expired as far back as 2010 and others in 2013,” said Chidhakwa told reporters and executives from the affected mines.

“Since they no longer hold any titles, these companies were notified this morning to cease all mining activities with immediate effect and to vacate the mining areas covered by special grants for diamonds.”

Chidhakwa gave the miners 90 days to clear out their equipment and other valuable. Access to the mines during the rime will be by request.

Marange Marange was regarded as one of the world’s richest alluvial diamond deposits, but its resources are depleting, experts say.

It was estimated to have produced around 17 million carats in 2013, 13 percent of the global rough diamond supply, according to the Zimbabwe Mining Development Corporation.

Marange produced 12 million carats in both 2012 and 2014, while production figures for 2015 are not yet available.

“Most of these diamond JV companies have been cherry picking easy to mine high grade alluvial deposits and not blending with low grade ore which is difficult to  mine and process,” said Chidhakwa.

“The mines are not properly explored and hence the resource is being mined before it was fully proven. No investment was made on kimberlite deposits.”

Chidhakwa said government had only received $637,3 million in revenue from the miners since 2010. Since 2009, the miners had only invested $186 million in the joint ventures.

The Chinese-owned Anjin — in which the state holds a 10 percent shareholding — has yet to produce audited accounts since it started operations, documents from the mines ministry show.

At the press conference, Chidhakwa rebuffed efforts by Anjin Chinese representatives to defend the mining operation in terms of a bilateral agreement between Harare and Beijing.

Chidhakwa said the Zimbabwe Consolidated Diamond Company, a wholly-owned state entity now held all diamond concessions, including those held by Murowa Diamonds, a kimberlite mining operation formerly owned by global resources giant Rio Tinto.

Murowa is now controlled by local firm, RioZim after Rio Tinto sold off its shareholding in June last year.