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Prosper Ndlovu recently in Vic Falls—
MINES and Mining Development Minister Walter Chidhakwa says there is no going back on the consolidation of the seven diamond mining companies in Chiadzwa into one firm but admits doing so gives him a “headache”. The minister told business executives during the just ended Buy Local summit in Victoria Falls that facilitating the proposed merger of diamond mining firms was the most difficult task for his ministry.
The seven miners — Mbada, Anjin, Marange Resources, Kusena, Jinan, Diamond Mining Corporation and Gye Nyame — have agreed to be part of the consolidated ownership, which is aimed at bringing more transparency and accountability in the sector.
The move is also envisaged to enable the companies to extract kimberlite diamonds, which are capital intensive.
Ultimately, the merger seeks to rescue the diamond industry in Zimbabwe as companies operating at the Marange and Chiadzwa fields can no longer afford to dig any deeper for the precious stones.
“Diamonds are the most difficult to manage. I’m at peace with coal and gold operations but not diamonds,” he said.
“We’re going ahead with merging the seven firms into one and that means we’ll have one board, one chief executive officer, one human resources manager and one finance manager.”
Chidhakwa said while the diamond industry was sensitive, consolidating its operations was the most appropriate way of restoring sanity and transparency.
The government is already working on engaging audit firms to evaluate the operating companies, a costly exercise, to determine the share ownership structure of the new company in which the State would own 50 percent.
“Our plan is to consolidate and have one company, which will be 50 percent owned by the government with the other 50 percent to be shared by the seven companies.
“Regarding profit sharing we’ll assess the net asset value of the seven firms and give each a deserving percentage,” said Chidhakwa.
He said the government was in dire need of funds for exploration of diamonds and capitalisation of the consolidated company.
“From the government’s point of view we’re proceeding with this. I know there’s anger but they (diamond companies) have to make a decision either to stay or not.
“When we’ve consolidated we’ll have improved capacity to manage, develop and explore more opportunities along the mineral value chain,” said Chidhakwa.
The seven companies had been concentrating on alluvial diamond mining, which requires less capital as they are easily extractable through open cast mining.
Zimbabwe is practically running out of alluvial gem deposits with existing miners admitting they have neither the expertise nor the resources to search for new deposits underground.
Yet Zimbabwe still holds enough diamonds to meet about 25 percent of the current global demand.
Mining is a key sector envisaged to provide the required millions for capitalisation and resuscitation of the ailing manufacturing industry.
The minister said the amendment of the Minerals Act was progressing slowly as he accused some unnamed figures of dragging their feet.
“Some people are benefiting from the status quo and would not countenance this amendment. You never see them but we’ve learnt the games,” said the minister.
He stressed the need for speedy exploration, which he said was critical in attracting investors into the mining sector.
Chidhakwa’s remarks come at a time when Parliament is pushing for tabling of a mineral exploration bill that will enforce financing of comprehensive exploration activities.
Bongani Ndlovu