HomePoliticsGovt, British firm in diamond wrangle

Govt, British firm in diamond wrangle

Dumisani Muleya

A FIERCE conflict has erupted between the government-owned Minerals Marketing Corporation of Zimbabwe (MMCZ) — the sole marketing and selling agent

of all minerals produced in the country — and a British-listed mining company over diamond claims in Marange district in Manicaland.

The fight between MMCZ and Africa Consolidated Resources (ACR) plc has sucked in Mines minister Amos Midzi, his deputy Tinos Rusere, and Manicaland provincial governor Tinaye Chigudu.

Last week Rusere and Chigudu, accompanied by MMCZ CEO Onesimo Moyo, visited Chiadzwa area in Marange in a bid to bolster government manoeuvres to seize diamond claims from ACR. The claims formerly belonged to Kimberlitic Searches, a subsidiary of global diamonds giant, the De Beers Group of South Africa, whose EPO expired in March.

Government is trying to come up with a law which empowers it to claim 51% shareholding in foreign mining companies, with 25% taken for free. The move has caused a stir within the mining sector amid fears that back-door nationalisation could be underway.

More than 5 000 villagers from different parts of the country have invaded Marange in the diamond rush which has seen people abandoning homes and formal jobs, as well as schoolchildren quitting classes to prospect for diamonds. The villagers got a boost last week when government officials gave them a go-ahead to illegally mine diamonds for sale to MMCZ only.

The marketing of diamonds is regulated through the elaborate Kimberly Process Certification System which details the origins of the gems and other qualities. This is meant to stop trade in illegal or “blood diamonds” from conflict-ridden areas, especially in Africa.

Roughly 49% of diamonds originate from central and southern Africa although significant reserves have been discovered in Canada, India, Brazil and Australia.

ACR is taking legal action to stop the seizure of its claims by MMCZ which, via its wholly-owned subsidiary, MMCZ Management Services, used its position to secure special grants over an area incorporating the ACR claims covered by claim certificates issued in terms of the Mines and Minerals Act.

Information available shows ACR is arguing that MMCZ had no legal right to the claims because the Precious Stones Trade Act prohibits any licensed dealers like MMCZ from engaging in mining activities. The mining firm is also arguing that even if MMCZ might have special grants,it is unlawful for it to acquire rights over ground not open to prospecting.

“There is a clear conflict of interest in the MMCZ engaging in diamond production when it is also specified by law as the sole marketing agent,” a legal source said.

“If the MMCZ is a licensed dealer then it is committing a criminal offence by holding special grants because it is prohibited from having any interest — direct or indirect – in claims, special grants or mining leases.”

The battle for the Marange diamonds has been going since early this year after the expiry of the De Beers EPO on March 28. After De Beers failed to get its EPO renewed in time, ACR moved in and secured the claims but on July 21 the assistant mining commissioner for Mutare advised ACR that its claims had been “invalidated” because De Beers had submitted an application for an extension.

ACR objected to this but got no official response from the authorities.

However, on September 19, the Mining Commissioner sent a letter to ACR confirming the validity of the firm’s claims. After that ACR started extensive infrastructural development and exploration activities, including sample collection and preparations for fencing an extensive area to protect it from illegal miners and rampant theft of diamonds.

On September 25, the MMCZ got actively involved. Midzi visited Marange three days later with ACR officials and police to address a large crowd of illegal miners. The same day police pounced on ACR officials and seized their diamond samples, which were later returned but with an instruction they should be taken to MMCZ for registration. ACR was on October 2 warned by police to cease all fencing and clearing activities on their claims.
This was a day after MMCZ had got their first special grant that it purports gives it the right over the claims.

ACR is planning to contest this in court and the fight is still on.

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