China's Anjin Investments May Have Mining License Restored in Zimbabwe

Mining and Exploration
04/06/2018 17:22

The Zimbabwean government has yielded to Chinese pressure and will restore Anjin Investment’s operating licence after finalisation of the new diamond policy, nearly three years after the entity was stopped from mining in Chiadzwa, writes the Zimbabwe Independent. As we noted here to weeks ago, President Emmerson Mnangagwa and the government of Zimbabwe has starting working on a new Diamond Policy that will unbundle the state-run Zimbabwe Consolidated Mining Company (ZCDC) to ensure more investors are able to exploit the diamond resources, saying the ZCDC lacked capacity to fully exploit it themselves. 

Anjin Investments, whose shareholders include Anhui Foreign Economic Construction Company Ltd of China (AFECC) and Matt Bronze - an investment vehicle controlled by Zimbabwe’s military - was suspended from mining diamonds in Chiadzwa in 2016 for allegedly failing to remit taxes, but resisted the merger. The government had also terminated the operating licences of six other companies which were extracting gems in the area. However, Anjin maintained its presence in Chiadzwa, abeit without operations, after it filed an application at the Constitutional Court challenging government’s decision to terminate its mining rights. Sources say Harare has buckled under pressure to restore Anjin’s licence following Mnangagwa’s visit to China in April where President Xi Jinping expressed dismay at how Zimbabwe was treating Chinese investors. “Basically, government is in a rethink mode and there is consideration to restore Anjin’s mining rights. There is admission on the part of government that it erred when it suspended Anjin from mining diamonds in Chiadzwa,” one official said.

The official said, “As a result, the recent pronouncement by President Mnangagwa that government is reviewing the diamond policy is a strategy to correct the mistakes that former mines minister (Walter) Chidhakwa made when he kicked out Anjin and the other firms operating in Chiadzwa.” He adds that the restoration of Anjin’s operating licence would also send positive signals to foreign investors that the new administration respects property rights, at a time government is saying Zimbabwe is “open for business.” AFECC, sources added, was also unhappy about Harare’s decision to suspend its mining rights in Chiadzwa, given the huge capital injection it had poured into the project, estimated at US$225 million. The decision by Mnangagwa’s administration to restore Anjin’s mining rights follows an investigation government recently launched into how the mining firm was looted and stripped of assets potentially worth millions of dollars during the time it has not been operating.

As Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished, commented, "The talk of ZCDC lacking capacity to mine diamonds on its own could be a ploy to make way for the army’s diamond company to resume operations in Marange and other parts of the country. As surely as the sun rises, Anjin will make a comeback in Marange. However, it’s also refreshing that companies such as Botswana Diamonds and Vast Resources were set to prospect for diamonds in Zimbabwe. The coming in of reputable diamond exploring and mining firms will help in as much as Harare will bring back companies that had been elbowed out of Marange."