Chidakwa said while government had issued special grants to the nine diamond companies in 2008, the companies — who had been resisting the merger efforts — were “in fact operating illegally as the granted permits had expired and were not renewed over the last four to five years”.
The President Robert Mugabe-led administration proposed to compulsorily consolidate all seven diamond mining firms in the country into one, with the State owning 50 percent of the merged entity — the Zimbabwe Consolidated Diamond Company (ZCDC) in March last year.
Under the initially proposed firm, the other 50 percent share was to be apportioned on a proportional basis to the amalgamated companies — based on their relative contribution to the larger firm.
“But, when we extended a hand of friendship to the diamond companies, wanting to work together as one big happy family we received a very disappointing response…
“So since the mining companies no longer hold any titles giving them right to mine in this country, they were notified this morning (yesterday) to cease all mining activities with immediate effect and to vacate the mining areas covered by the special grants for diamonds,” Chidakwa told a news conference in the capital yesterday.
According to Chidakwa, consultation with the existent companies achieved no consensus between the miners and government.
“Marange, DMC and Jinan held Extraordinary General Meetings. Marange accepted the proposals. DMC and Jinan decided against consolidation proposals.”
The minister said that according to the provisions of the special grants which the miners were mining under, government was empowered to cancel the special grants for various reasons.
“As such, given the fact that the Marange Diamond Fields are considered a strategic national resource… we have decided not to renew the permits of all the companies in Marange and Chimanimani,” he said.
The ZCDC is now a wholly government-owned entity mandated to explore, mine, recover and sell the gems, thus all diamond mines, current or future now fall under the ZCDC.
“The current scope of consolidation includes, but is not limited to all concessions which fall under the current Chiadzwa diamond fields (operating and mothballed), all T-Concessions which are still to be further explored, the Chimanimani diamond fields currently under the Murowa Diamonds, Beitbridge diamond kimberlites currently under River Ranch Diamonds and others yet to be discovered or operationalise,” said Chidakwa.
In his monetary policy statement, central bank governor John Mangudya announced that he was raising about $30 million for the consolidated firm.
The Mines minister also said the companies had failed to meet their pledged investments during the over six years they have been operational.
Anjin Investments P/L (Anjin) which pledged to invest $132,2 million when it was established has to date not yet released the amount invested to government while Diamond Mining Corporation only invested $41 million of the pledged $50 million.
Jinan Mining P/L (Jinan) invested a total of $137 million after pledging a $200 million investment. Of the companies, only Mbada declared their earnings and in the six years they were in operation, they
contributed $434 million to the government through dividends, taxes and cash advances to the government which were used for civil service salaries.
During the last six years, the companies contributed $637,3 million in terms of payments to government — an amount which steadily plummeted to a $23,4 million fiscal contribution in 2015 from the $125,2 million which made its way into the fiscus from the miners in 2010.
However, a Chinese Embassy representative who refused to identify himself said the move by the minister was violating a bilateral agreement signed by the two countries in 1998, but Chidakwa promptly said the agreement did not make a provision for the Chinese to operate without licences.
Daily News