Zimbabwean police deployed to diamond mines, merger underway

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Zimbabwe’s mines minister on Wednesday confirmed that police have been deployed to six diamond mining firms, including five joint ventures, that were ordered to close two days ago.

Mines Minister Walter Chidhakwa told journalists at a press conference in Harare after touring the diamond-rich Marange region that “our police force are in place deployed on each and every one of the mines, and the diamond miners’ security personnel have been disbanded; mine workers sent home.”

The minister said some mines are being evaluated to be merged into a new state-controlled firm that is solely licensed to operate.

The government on Monday announced to shut down the operations of six diamond mines in Marange on the grounds that they failed to obtain renewed mining licenses from the government. This came as the mine operators refused to accept a government proposal to consolidate six firms into one, in which the state holds 50 percent shares and the private and foreign investors divide the rest.

The government said it wanted to consolidate the mines to improve transparency in diamond revenue and under-investment by the foreign partners.

The minister said the door for re-negotiation is closed.The affected firms are now given 90 days to have their assets evaluated for the merger or to pack up and leave.

There are local media reports of looting and theft at the mines after the abrupt cessation of operations. But neither Chidhakwa nor the national police spokesperson commented on the issue.

One of the affected firms Diamond Mining Company (DMC), a 50-50 joint venture between United Arab Emirates-registered Pure Diamonds and the state-owned Zimbabwe Mining Development Corporation, said it planned to sue the Zimbabwean government for breach of contract.

Zimbabwe is the world’s eighth largest diamond producer, after the commercial exploitation of Marange fields in 2010. But the output has dwindled from 12 million carats a year in 2012 to mere 3 million carats last year.

The miners, contending the government’s accusation, said the depletion of alluvial sources, depressed prices on the international markets, and the hiked royalties imposed on the mines were causes for the sharp decline of output.

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