Zimbabwe seizes unlicensed diamond mines

Zimbabwe on Monday said it was seizing diamond companies that were operating without licences and had spurned an offer to join a state conglomerate.

“It has since come to our attention that the joint venture companies have been operating illegally as permits which had been granted expired and were not renewed over the last four or five years,” Mines Minister Walter Chidhakwa told a news conference in the capital.

“The government is hereby requesting the diamond companies to stop all operations and shut down all processes to co-operate in the handover and takeover and to immediately vacate the mining areas without any items,” Chidhakwa said.

Monday’s move follows months of wrangling between the mining companies and the government over its plans to merge the mines into one new entity to ensure efficiency and transparency, a proposal opposed by some of the firms.

Chidhakwa said the state-owned Zimbabwe Consolidated Diamond Company (ZCDC) will now hold all the diamond claims in the country, but said the state was not nationalizing the mines.

“We are not expropriating. Remember the concession that we are taking does not belong to the company…it vests in the state. We are not touching the equipment, the bulldozers, the excavators, everything that you have put up remains your assets,” Chidhakwa said.

Last year, Zimbabwe ordered diamond companies, including joint ventures with Chinese companies mining gems in the eastern Marange to come under the aegis of the Zimbabwe Consolidated Diamond Company government conglomerate.

The company was formed “to explore, recover and sell all diamonds in Zimbabwe” following concerns over the disappearance of diamonds and trading on the black market, leaving only little revenue trickling into state coffers.

In recent years, the government has pinned its hopes on the diamond industry to shore up the moribund economy but was forced to revise its projections downwards as earnings fell short.

The latest move by President Robert Mugabe’s government could further tarnish the country’s image as a risky investment destination, with investors already unnerved by Mugabe’s drive to force foreign-owned firms to sell majority shares to locals.