Deadline set for diamond firms

Minister Chidhakwa

Minister Chidhakwa

Lloyd Gumbo Senior Reporter—
GOVERNMENT has given all diamond mining companies in Zimbabwe a deadline to be part of a consolidated company. All the diamond mining firms in Chiadzwa, DTZ Ozgeo in Chimanimani and Murowa Diamonds in Zvishavane will be merged into one big company where they will share 50 percent while Government will own the other half.

Mines and Mining Development Minister Walter Chidhakwa revealed this when he appeared before the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment yesterday.

Zanu-PF MP for Gokwe-Nembudziya, Justice Mayor Wadyajena chairs the committee.

Minister Chidhakwa said he has already advised all diamond mining companies of the position and indicated that those that were not willing to join the consolidated company would cease diamond mining in Zimbabwe.

“They have now gone to consult their board of directors,” he said.

“They will be coming on Monday to tell us what the outcome of their discussions with their board of directors will be. 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.

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

“So I expect that on Monday we will be meeting with them to hear the position of their shareholders. This will enable us to know who we will be proceeding with us into the future and who will not be with us.”

Minister Chidhakwa said reasons behind the merger were to ensure security of the precious gems and accountability.

There have been concerns in Government that some diamond mines have been getting a bigger chunk of money from the sale of gems but understated what was due to the State.

“These are the issues that have pushed Government to ensure that we have perhaps a single entity and this is in respect of all diamonds in Zimbabwe and agree on the security measures.

“The idea is to bring all the companies together into one company. With one board director, one management team and that all the diamond mining companies in the country become shareholders in this company and those are the issues we are grappling with now,” he said.

The minister said all the mining firms would share 50 percent but different percentages depending on each company’s equipment that it will bring to the consolidated one.

Government would own 50 percent by virtue of owning equivalent stake in Chiadzwa companies while Murowa would contribute as part of its compliance with the Indigenisation and Economic Empowerment Act.

“So Government comes in with 50 percent in this one big company then you take all the companies and say assuming that you all have the same equipment, you divide 50 by six and you give them the same percentage but it’s not like that. You then have to temper that percentage to the extent of their contributions because they are bringing equipment as their contribution into this big company.

“So the value of that equipment is what then tells you that this company will have slightly more or slightly less than the other one. But all of them must fall under the 50 percent.

“We are not cancelling their mining licences because that will be ultra vires the law but we are saying to them let’s come together, form one big company and you own a lesser percentage but of a bigger company,” said Minister Chidhakwa.