Zimbabwe Govt. tightens grip over diamond production with new ownership policy

Winston Chitando, mines minister, Zimbabwe

THE Zimbabwean government has tightened its grip over the country’s diamond sector, approving a policy that entitles it to a 46% stake in all diamond mining firms whilst also sanctioning three other independent diamond firms, including Murowa Diamonds.

Controversy has stalked Zimbabwe’s diamond sector ever since the government elbowed out private investors and consolidated it under the Zimbabwe Consolidated Diamond Company (ZCDC), Murowa, one of the firms to have survived this process, is owned by the Zimbabwe Stock Exchange listed RioZim.

A communiqué released by the government after the cabinet meeting stated: “Only the ZCDC, Murowa Diamonds, and two other companies to be approved by government will be allowed to undertake diamond exploration and mining” in the country.

“Any other entity or person with diamond mining title shall approach any of the four approved companies for joint venture agreements. The government through the ZCDC shall be the 46% (owner),” it said.

It further states that Harare “… may waiver that local ownership threshold subject to submissions and due diligence” to the effect that all rough diamonds produced locally “… shall be submitted to the Diamond Value Management Centre to be established by the ZCDC” for cleaning, sorting and valuation.

This will, however, not apply to Murowa Diamonds.

Mines Minister, Winston Chitando has since told Miningmx that the identities of the two other companies approved to undertake diamond mining in Zimbabwe would be announced in the next few weeks. “Having the diamond exploration and mining sector operating under a number (of companies) which is not too big is the way to go,” Chitando said.

The ZCDC was already undertaking extensive exploration for new diamond deposits having spent as much as $22m on such activities in the past few months, he said.

Zimbabwe is also likely to maintain black majority ownership in platinum mining operations as the country seeks to get a greater share from its mineral resources.

Economists in Zimbabwe however say a reduction of state control in precious minerals mining would have enhanced investment prospects. “There were earlier indications that this will be reviewed and the Chamber of Mines made representations which apparently have been ignored,” said an economist who consults for the chamber.

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