adminDiamond firms to merge into one entity
Ngoni Dapira
ANALYSTS have welcomed the Government’s decision to merge all Chiadzwa diamond companies into one entity, the Zimbabwe Consolidated Diamond Company.
Africa University Faculty of Management and Administration lecturer and economist Mr Thomas Masese lauded the proposed merger, saying it would advance transparency and accountability, but warned that it may impact negatively on investor perception.
“The impact on investor perception must be strongly considered. Since all the investors will now only own and share 50 percent of the new company, it dilutes their influence in the new company which may be against their original objective, making the investment less attractive,” he said.
Mr Masese, however, commended the development as necessary in ensuring accountability and advancing Government’s thrust on underground diamond mining in Chiadzwa.
He said diamonds were a national and strategic asset that could benefit the fiscus, as a result, the merger would streamline operations and improve accountability for revenue inflows to the fiscus.
“Merging will also overcome the reluctance by Chiadzwa firms to invest in shaft mining.
“They were only interested in low-hanging fruit of alluvial diamonds but as a country we are interested in long-term benefits and exploitation from the resource,” said Mr Masese.
He added that the consolidation would be an ideal opportunity for Manicaland to finally actively get involved in the diamonds project and drive beneficiation initiatives.
Diamond Beneficiation Association of Zimbabwe chairman, Mr Richard Mvududu welcomed the move by Government and said it was a progressive decision aimed at fixing the growing problem of high-levels of revenue leakages in the diamonds sector.
He said the Government identified a problem and was acting on it in a manner applicable to the state of affairs.
“This is no doubt a positive move which we were pushing for as players in the diamond sector.
“The Chiadzwa companies were not willing to invest in long-term projects of shaft mining, so by consolidating serious players will be identified.
“Chiadzwa companies were also failing to declare taxes and royalties to Government.
“This is a national resource and the populace should see the profits, so with Government accountable at least follow-up will not be difficult under a consolidated company,” he said.
A labour economist Mr Prosper Chitambara said the issue of investor assets and liabilities must be cautiously addressed.
To achieve this, he said there was need not only for transparency, but inclusion of stakeholders in the decision making-process by Government.
“All creditors must be paid and assets must be correctly valued so that investors get their fair share in the new company.
“All workers should be fairly treated so that there will be security of jobs as the new company streamlines.
“If the process is perceived transparent it will help investor confidence,” said Mr Chitambara.
The Mines and Mining Development permanent secretary, Professor Francis Gudyanga last week said the consolidation process would be complete by end of April or early May.
He said all the seven Chiadzwa diamond mining companies, Mbada Diamonds, Anjin, Marange Resources, Gye Nyame, Kusena, Jinan and Diamond Mining Company together with Murowa Diamonds and DTZ-OZGEO would merge into ZCDC.
Government , he added, was taking control of the 150 000-hectares Chiadzwa diamonds fields to improve transparency and accountability of the national resource.
Last week Thursday President Mugabe during a State visit in South Africa said Zimbabwe would not bow-down to getting unfair value for its natural resources.
He said the 51-49 percent indigenisation policy was irreversible.
During the State visit President Mugabe signed two memoranda of understanding to enhance bilateral relations with South Africa.
Online Reporter