Ex-Chiadzwa investors seek compensation

30 Jun, 2016 - 00:06 0 Views
Ex-Chiadzwa investors seek compensation

The Herald

Golden Sibanda : Senior Business Reporter

INVESTORS who were given permits to mine diamonds in Chiadzwa which were later revoked after a decision to consolidate operations was made, are pushing Government for compensation. While Government has pledged to compensate prospective investors it had approved to extract gems, one of the affected parties says they should also be given shares in the consolidated entity.ZimNgoda Gcwabe claims they were led on by Government for four years in the firm belief they would be allowed to extract the precious stone, only to be prejudiced by the sudden shift in policy.

Secretary for Mines and Mining Development Professor Francis Gudyanga indicated in correspondence to the affected firms that their interests and other such investors will be sub secured by the State.

He said that the diamond mining industry is relatively new and policies of Government were evolving, as lessons are being borrowed from international best practice and integrated into Zimbabwe’s situation.

As such, he said Government is now consolidating diamond mining in the country in general and in the Chiadzwa in fields in particular. Government said this will enhance accountability in this area.

Government is currently working on the consolidation of diamond mining companies in Chiadzwa after it cancelled their licences over concerns about insignificant income from diamond sales.

The firms include, Mbada, Anjin, Gye Nyame and DMC. The Zimbabwe Consolidated Mining Company now holds the claims of all diamond firms in Chiadzwa as the operations are being merged.

This comes amid fears that the country could have been prejudiced of up to $15 billion by its 50-50 partners in diamond mining in Chiadzwa diamond fields.

Prof Gudyanga said affected investors, including ZimNgoda Gcwabe, should “indicate accurate financial expenditure for consideration by Government with a view to making reasonable compensation or reimbursement,” but this pledge has not be honoured.

Zim-Ngoda had partnered a South African company, Gcwabe Resources which had committed to fund 100 percent of the new project to extract diamonds in Chiadzwa.

The joint venture company for the investment that had been planned for Chiadzwa had since been registered as ZimNgoda Gcwabe. Further, the company had already done two geological reports.

“We write to confirm that we are pleased to partner you in the diamond mining in Marange on block 53, Marange Concessions. We are ready to fund the project 100 percent, as financial investor,” wrote Gcwabe in a correspondence to ZimNgoda in 2014.

ZimNgoda president Collins Chipere said it was expected that the planned investment would have generated at least 600 new jobs.

But when the plans went up in smoke as Government consolidated diamond mining to enhance transparency, accountability and inflow to Treasury, the Ministry of Mines pledged to compensate affected investors, but to date this has not been done.

ZimNgoda has since requested Government, instead, to offer them shares saying its interests, including its financial investors and the welfare of shareholders were prejudiced by the change in policy.

The president of ZimNgoda said they were led on by Government for four years in the belief that they would mine diamonds in Chiadzwa, but were left clutching at straws after they were advised that it was no longer possible for them to mine in the area.

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