Diamond firms get 90 days to wind up

Mines and Mining Development Minister Walter Chidhakwa addresses a press conference while flanked by permanent secretary Professor Francis Gudyanga and Home Affairs Minister Ignatius Chombo. Picture by Lloyd Gumbo

Mines and Mining Development Minister Walter Chidhakwa addresses a press conference while flanked by permanent secretary Professor Francis Gudyanga and Home Affairs Minister Ignatius Chombo. Picture by Lloyd Gumbo

Lloyd Gumbo Senior Reporter
Government has given diamond mining companies in Chiadzwa and Chimanimani 90 days to remove their equipment and other valuables from the mines after it stopped their operations yesterday.The firms whose mining special grants expired and were not renewed will, however, be expected to hand over all diamond products to Government personnel who have been deployed there.

Mines and Mining Development Minister Walter Chidhakwa announced this development during a Press conference in Harare yesterday.

Representatives of the mining firms attended the Press conference after the decision had been announced to them earlier in the day.

Watch video here…..

Special grants in the two areas were issued to Anjin, Diamond Mining Corporation, Jinan, Mbada Diamonds, DTZ Ozgeo, Rera, Gye-Nyame, Kusena and Marange Resources

“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,” said Minister Chidhakwa.

“They have been given 90 days within which to remove their equipment and other valuables. During this period, access into the premises will be by request, which will be considered by the Ministry of Mines and Mining Development.”

Minister Chidhakwa said Government decided to consolidate all diamond mining in Zimbabwe into one company — Zimbabwe Consolidated Diamond Company to improve efficiency and accountability.

He said this was the trend in other diamond producing countries in the region such as Botswana, Namibia and Angola.

He said the consolidated company’s mandate was carrying out exploitation, mining, marketing and value-addition programmes for the diamond resource in Zimbabwe.

Minister Chidhakwa said it was therefore important for Government to consult all stakeholders in order to come up with an inclusive and mutually beneficial consolidation process.

“Consultation with the existent diamond companies which took over seven months to allow for extraordinary shareholder general meetings achieved no consensus between Government and the companies on the consolidation issue.

“There was evidence of the desire by the companies to extend the process of negotiation for undeterminable periods at a time when the industry is in decline and definitely in trouble. This was not and remains an unpalatable choice for the Government.

“Marange Resources, DMC and Jinan held EGMs. Marange Resources accepted the proposals. DMC and Jinan decided against the consolidation proposals. Mbada and Anjin have been dragging their feet and have up to now not formally made their decision.

However, the investors in the JV companies, Grandwell and AFECC, respectively made unilateral submissions to the Government opposing the consolidation proposals,” said Minister Chidhakwa.

He said Government had shut its doors for further negotiations with the firms since they did not show interest in consolidation for the past seven months.

Minister Chidhakwa said the consolidated firm was meant to benefit both the companies and Zimbabwe.

He said the consolidated firm would own concessions in Chiadzwa, Zvishavane diamond kimberlites currently under Murowa and Beitbridge diamond kimberlites under River Ranch Diamonds as well as those to be discovered in future.

“For seven months, we opened our doors. For seven months, my teams tried to talk to the companies. For seven months, we did not get a positive response. Surely what more opening of doors would one ask for? No, we will not reconsider. This is the final position of Government.

“I want to say this is in one way a sad day and in another way a good day. A sad day because we have to part ways in this manner. We extended a hand of friendship to the companies. We said we wanted to work with you in one big happy family.

“We said we wanted you to pool your resources — financial as well as technical and technological. And we said we would make available to all of you as one big family, as one big company, we said we would make available to you all the diamond deposits from Zambezi to Limpopo,” said Minister Chidhakwa.

He said, however, all the companies still refused, in the process leaving Government with no choice but not to renew their licences.

The minister, who was flanked by Home Affairs Minister Ignatius Chombo and Mines permanent secretary Professor Francis Gudyanga, said it was now incumbent upon the consolidated company to deliver and contribute to the economy.

Government owned 50 percent shareholding in all the companies except Marange Resources it wholly owned.

Minister Chidhakwa said it was therefore inevitable that the companies came up with mechanisms to share their assets and liabilities such as statutory obligations and salaries.

A Chinese national who probably represented Jinan or Anjin Investments queried if Government was not breaching an investment agreement between the Zimbabwean Government and the Chinese government where the two countries were expected to protect investments by their countries.

He added that Government had not invited them to renew their licence.

But Minister Chidhakwa said the agreement did not allow companies investing in either countries to defy the law.

 

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  • Hamunyari

    Since Government owns 50 percent of all these companies, can the thousands of previously sacked workers still waiting for retrenchment packages and now the remaining mining staff, expect to receive at least 50 percent of their outstanding dues directly from Government as partial reparation?
    Notwithstanding many other firms and individuals are still awaiting settlement of debts and lawsuits from mining firms over years of past activities, ……… another excuse to burden future taxpayers with a special purpose vehicle (SPV) to magically disappear debts as with those owed by the RBZ?

  • doRoKuDya

    It was Eddie Cross who once suggested that diamonds be nationalised years ago and somehow the Minister of Mines one Obert Mpofu dismissed it as a political gimmick.How much have we lost or the people of Zimbabwe through these panners and snugglers!

  • Wakisai

    So much for boosting investor confidence, the 10 point plan, Zim-Asset and Clusters? Nicely timed to promote FDI and coinciding with the IMF finalising their review under the Staff-Monitored Program (SMP)?
    Meanwhile in order to pay essentials such as civil servant bonuses, Treasury has recently been dipping far too frequently into the Bank RTGS (Real-time gross settlement) system, compromising capacity for businesses to pay bills in full on time since the guaranteed money floating in the banking system isn’t there. Thus creating a severe business handicap, damaging reputations and trust. Government in turn is incapable of paying off these very short-term loans totalling hundreds of millions and instead issues worthless paper IOUs.
    No doubt the IMF together with other multilateral organisations and those providing insurance for Mega deal loans, will carefully note Government shenanigans and base future decisions accordingly.

  • Tarwiraushe

    These diamond miners used us minister Chidhakwa. This should go into the history books,as one of the worst crime against humanity. We have nothing to show for the stockpile of diamonds,we were told the country was sitting,on because we couldn’t sell the diamonds due to illegal sanctions. When the country finally got the clearance to sell the stockpile,minister Mpofu promised the nation that our financial woes were about to become a thing of the past. He promised civil servants better salaries, and working conditions. Then There’re the poor people of Marange who were promised $50m dollars. You should have consulted with countries like Botswana and SA,who have successfully used diamonds to help improve their economies. Kwamava kuita uku,ndokunonzi kuyeuka bako mvura yanaya.

    • Tapiwa Mushe

      Wake up! What kind of fool are you. Who used who? Its the other way round ‘Bhare’. These mines were left to mine for some time after the expiry of their licenses and now they are forced to leave all this unaccounted diamond behind. Where did the so called stockpile go to? Is it the miners who stole it? Wake up!

  • Tapfuma

    Don’t suppose it will take long to wind down operations as many mining companies have already largely reduced employees, and much of the equipment was rented. As for the rest of the material, that can be removed to other operations in Zambia, Botswana or RSA as long as it’s not targeted first by creditors’ lawsuits. Bye-bye Zimbabwe, bye-bye jobs!
    Just wondering, aren’t mining firms supposed to clean up all the environmental impact they’ve caused by mining activities and leave the landscape in pristine renovated condition before they leave? What role has the Environmental Management Agency to play in this or Minister of Environment Muchinguri? Will Government have to foot the bill since they are forcing this issue?

  • Observer gonzo

    Is marange resources which is wholly owned by the government and wholly supervised by the permanent secretary seated next to minister & therefore falling directly under messr chidhakwa himself contributing anything the to fiscus? It is marange resources of all companies that has been in the media for all the wrong reasons eg it is the only diamond company that operated with a one man board appointed by chidhakwa for two years. it is also the only one that government sent auditors to investigate corruption but the report outcome was not made public by the same minister.

  • Dube 1

    thats the way to go

  • Mabaleka

    While this is a sad day in Zimbabwe’s history and especially with regards to the effort to attract foreign direct investment, people of Zimbabwe need to open their eyes and understand global economics and politics. It is the same people and companies who invest in largely African and Asian markets and these people are so skilled on how to avoid accountability and benefaction of products. They dont want to pay local workers, they dont want to employ locals for top positions, only down in the shaft so they employ our people. Our brothers dont even get sufficient protective clothing and we have some corrupt among us who should protect these workers but bcoz they stink with greed, they dont. In a nutshell, at this point in Zim, we have nothing to lose, it can only get better… we are at the bottom, rising up. Its better we align ourselves and take key and strategic positions and fields NOW ONCE AND FORE ALL, areas that will benefit our children & grand children. No apologies needed. They were given a choice, they made their choice. Izvi ndozvabuda musarudzo…In any case, these people dont even invest in our country, they take money outside the country. With all the billions coming from these mines, you tell me we cant even settle our international debt? Its time and now is the time…

  • jokonia

    there is no accountability on this diamond story. who will monitor those that will remain at the mines. Kusangorongeka chete uku. We tired of people stealing. Where are the millions that were supposed to come from the diamonds?

  • Muzondiwa

    If one listens carefully to the speech by Hon Chidhakwa, he has a challenge , according to him his challenge is not to dissolve the companies but whether the ZCDC will deliver . The clear indication is that no feasibility study was carried out to the see the work-ability of the idea. How can u kill the milking cow in anticipation of one yet to be born as replacement. If its true as commended that the same Professor seated next to the minister ran a one-man board for Marange Resources for two years then what kind of advice surely can he offer the minister and where is Marange now . Can we entrust the nation `s resources to two individuals who failed to run a single diamond mining company .Marange resources is virtually bankrupt because of these two men. The whole idea behind ZCDC is to bail out a failed Marange 100% wholly owned by the Gvt. It is the same new wine in an old bottle.