Zim to nationalise diamond mines | Fin24
 
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Zim to nationalise diamond mines

Mar 12 2015 19:06
Malcom Sharara
Harare - The Zimbabwean government is set to nationalise all diamond mining companies into one consolidated mining company, a government minister has said.
 
The merged diamond company will include Murowa Diamonds, the only remaining Rio Tinto asset in Zimbabwe.
 
Mines and Mining Development Minister Walter Chidhakwa told a parliamentary committee on Youth, Indigenisation and Empowerment that all the miners have until Monday to accept the proposal.
 
He added that the government will hold 50% shareholding in a consolidated diamond mining company while the remaining stake will be shared among the six companies that are currently mining in Chiadzwa.
 
He said that since the companies had various shareholders they had been given a time frame which lapses on Monday.
 
“We gave them the opportunity to go back to shareholders to determine whether they will participate in the consolidation. They have until Monday to accept the proposal.
 
“Obviously, the most important part is the legal side. We will not violate their contracts; we want everything to be done to the satisfaction of all parties,” said Chidhakwa.
 
Chidhakwa said the consolidation of the operations is being done in terms of the Companies Act and all companies should oblige. He said the companies’ shareholding will be determined on the valuation of their equipment and size of operations.
 
He emphasised that it made a lot of business sense for miners to have an opportunity of becoming shareholders in a entity which owns all the diamond resources than to be shareholders, especially in the case of Murowa, in a company with a small concession. It is better to own 10% of an elephant than 100% of a rat. It will also enable the companies to comply with Indigenisation requirements.
 
The amalgamation of the local diamond industry is expected to increase accountability at the fields, estimated to hold the world’s largest diamond concentration.
 
Chidhakwa said experiences in Russia and Botswana had proven that engaging fewer diamond mining players refocuses attention to production.
 
Botswana and global mining giant De Beers operate a 50-50 joint venture Debswana which has grown to be the world’s largest diamond producer by value. In Russia, seven companies merged and formed Alrosa, now the leading international diamond producer by volume.

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