adminKudzanai Gerede
Government has called for serious partners with capacity to finance as well as provide technical and marketing support to the new consolidated entity, the Zimbabwe Consolidated Diamond Company (ZCDC) which is set to take over mining operations in all the country’s diamond fields following the order by the Ministry of Mines and Mining Development for all Joint Venture companies to stop operations in Chiadzwa last Monday after the companies failed to renew their Special Grants.
Following the scramble of diamonds deposits in Chiadzwa in 2007, Government in the process of formalising mining operations in the area embarked on issuing Special Grants the following year to Joint Venture (JV) companies to partner Zimbabwe Mineral Development Cooperation (ZMDC) which held 50 percent share value.
Special Grants were issued to ANJIN, DMC, JINAN, MBADA, DTZ-OZGEO, RERA, GYE-NYAME, KUSENA, and MARANGE RESOURCES in terms of section 291 of the Mines and Minerals Act (Chapter 21:05), but none of the companies have renewed the Special Grants which have since expired as far back as 2010 and 2013.
Addressing the media at his Mines and Mining Development Ministry offices this Monday, Minister Walter Chidakwa said new partners were welcome to partner the consolidated company with full compliance to government policy.
“The Zimbabwean government will engage partners who demonstrate the capacity to provide adequate financing as well as technical and marketing support to maximise the value of our diamonds.
“Let me emphasise that any such engagement will be on the basis of mutual understanding within the framework of existing government policy. I therefore invite any interested parties to contact us,”
“I am happy to announce that the ZCDC has already been formed and is being operationalised as I speak. Staff recruitment has started and the government is equipping the company to allow it to stabilise production at between 8-12 million carats a year. We now have two deep boiling facilities in Harare as our first line value addition as well as a world class tender facility as we build towards a diamond bourse,” said Minister Chidakwa.
The move takes place at a time when diamond production and sales had declined drastically owing to poor investment by the JV companies into exploration activities coupled by the decline in commodity prices.
The ZCDC (Pvt) Ltd which is 50 percent owned by government is mandated to explore, mine, recover and sell diamonds in Zimbabwe.
This will be done in order to ensure improved accountability and transparency in the manner the country’s resources is handled.
“In order to manage more efficiently the various stages of technical operations and commercial exploration of the Zimbabwe diamonds in the entire value chain, the government decided to consolidate the current and future diamond mining entities. This is what has been done in other neighbouring diamond producing countries such as Botswana, Namibia and Angola,” he added.
Since the commencement of diamond mining activities the country has had little to show for its rich diamond findings as transparency in the sector was an impediment to growth of the industry and the country’s economy.
Since 2009, the country has only realised just over half a billion dollars (US$ 637 335 956) in revenue from the diamond sector. The joint venture companies have been reluctant to investment in further exploration activities with most of them failing to fulfil pledge agreements they promised government.
Of the US$482,2 million pledges by the companies in Chiadzwa for investment purposes only US$ 226 million was realised.
The order to stop operations came as a resulted of tireless efforts spanning 7 months by the Ministry of Mines And Mining Development to engage JV companies into the consolidation exercise but saw most of the mining companies in Chiadzwa dragging their feet in as far as ascertaining their position was concerned prompting government to take the drastic measures to halt operations.
Analysts have welcomed the development citing it as long overdue hence noble initiative in guarding the country’s mineral composition for the good of economic development.
The proposed consolidation of diamond mining firms is the way to go to address the challenges bedevilling diamond mining in Chiadzwa.
“This is in line with the Africa Mining Vision adopted by African Heads of State and Government in February 2009 whose goal is to create a transparent, equitable and optimal exploitation of mineral resources to underpin broad based sustainable growth and socio-economic development. It’s sad to note that most of the companies have spent the last 8 years panning alluvial diamonds without any significant investment in machinery to extract kimberlites,”
“The gems were smuggled out and the money externalised. Moreover there has not been any significant investment in education, sport and health, neither have the communities benefited from the mining operations, if at all they have been driven off their land despite the huge revenue from their mining activities. Mutare City has nothing to show, a direct opposite of yesteryear miners whose revenue enabled the building of towns like Kwekwe, Redcliff, Zvishavane, Bindura, Shurugwi, Renco, Mhangura, Hwange and many others,” notes Mr Pepukai Chivore, an economic analyst.
“Consolidation will help strengthen mineral resource governance, and ensure transparency, equitable and optimal exploitation of mineral resources to underpin broad-based sustainable growth and socio-economic development.
“The haphazard mining that was being done was not sustainable and there were loopholes in terms of declaration and openness(operation were shrouded in a veil of secrecy).
“This will also help to ensure mining royalties are declared to the government and there is equity in distribution of benefits,” he added.
Minister Chidakwa has however assured workers from the 9 companies that have since ceased operations of job security noting that they were going to be reinstated into the newly consolidated ZCDC structures to avoid any job casualties.
Online Reporter