Zimbabwe Gov’t Takes Control of Its Diamond Industry (again)

Mining and Exploration
24/05/2017 16:20

Zimbabwe has taken over income from all diamond mining activities in the country after injecting $80m into the Zimbabwe Consolidated Diamond Company (ZCDC), a state-owned company mandated to run diamond mining activities, reports miningmx. The Zimbabwe Government’s Finance Minister, Patrick Chinamasa, has now stated, “the diamonds belong to the fiscus” in a time of decline in gem mining operations throughout the country. The news comes after it was revealed that earnings from diamonds in Zimbabwe between January and May 12 significantly fell to $27m from a high of $51 in the same period during the previous financial year.

Amid great skepticism, Zimbabwe consolidated all diamond mining companies in the country into the ZCDC back in late 2015/early 2016. At the time, Minister of Mines and Mining Development Walter Chidhakwa said the merger was meant to foster transparency and accountability among Chiadzwa diamond mining companies which had failed to remit any proceeds to government coffers despite reports of massive earnings from diamond sales, but the move was followed by "chaos" and declining output. Back in January of this year, the government announced it was seeking $300 million in investments, but has now invested its own resources. Now, "There's a new arrangement with ZCDC that since we are capitalising it, automatically the diamonds belong to the fiscus," said Chinamassa. He said, "Every diamond output will come to the fiscus" through the Reserve Bank of Zimbabwe. This would, "Ensure that we get maximum realisation" on the proceeds from diamond mining in the country. 

Chinamasa told mining executives at an indaba in Victoria Falls last week, “We have capitalised the ZCDC to the tune of $80m and there is new management." Miningmx adds that the state’s case in the takeover has been strengthened after the government reached an agreement this month to pay one of the Marange diamond mining companies, DTZ-OZGEO, about $5.4m to take over mining concessions the Russian miner owned. Some of the diamond miners in Zimbabwe’s Marange area included Anjin and Jinan among four others. Mines Minister Walter Chidakwa has said that the government is making arrangements with the two miners regarding the consolidation process.

 

photo courtesy of KP-WGDE 2007