On a warm Monday morning, diamond mining executives got a call from Mines minister Walter Chidhakwa’s office telling them to come for a meeting but the agenda was not revealed to them.
Many thought it was just one of their regular meetings with the Mines minister.
Unbeknown to them, Chidhakwa had something up his sleeve that would blow their minds and change the future of diamond mining in the country forever.
While Chidhakwa last year had given a policy directive for all diamond mining companies in the country to merge into a single company called the Zimbabwe Consolidated Diamond Company (ZCDC), no one in the meeting had anticipated the bombshell he was about to drop.
On arrival at Zimre House, the building that houses the Ministry of Mines, the executives trekked to 7th floor of the building, where the offices of the Mines minister are located. On the 7th floor, they were bundled into a single waiting room.
The executives were called in to meet with Chidakwa individually. Once in the office, the executives got the bad news; diamond mining operations at Marange must seize operation immediately.
After notifying the executives of the news, Chidhakwa then made them sign as appendage to formal receipt of a letter, ordering them to stop operations and vacate premises covered by special grants with immediate effect.
Diamond Mining Corporation MD Ramsy Malik said it had come as a surprise for many and they all felt it was done hurriedly.
“We were just called for a meeting on Monday by Chidhakwa and we had no idea what it was about. Then we were called into his office individually for the letters and the next thing was the press conference. They ordered our security personnel off the fields when they were not adequately prepared to secure the area,” Malik said.
At the press conference, Chidhakwa gave diamond miners a 90-day ultimatum to remove equipment after ordering them to stop operations with immediate effect for rejecting a proposal to amalgamate the sector.
He said companies in Marange had been operating illegally after their special grants expired and had not been renewed for the past four to five years.
Chidhakwa’s directive follows the diamond miners’ rejection of the initial amalgamation plan, which gave birth to ZCDC and left government owning a non-dilutable 50% stake and the balance shared among the existing miners. Chidhakwa on Monday said the new company was now a wholly government-owned entity mandated to explore, mine, recover and sell diamonds in Zimbabwe.
“As such, all diamond mines either current or future ones will all be under the ambit of ZCDC,” said Chidhakwa in his statement.
“The current scope of consolidation includes, but is not limited to, the following: All concessions which fall under the current Chiadzwa diamond fields (both operating and mothballed); All concessions which are still to be explored further; the Chimanimani diamond fields currently being mined by DTZ OZ GEO; Zvishavane diamond kimberlites currently under Murowa Diamonds; Beitbridge diamond kimberlites currently under river ranch diamonds; others which are yet to be discovered or operationalised.”
As news of the directive filtered through on Monday, a looting spree erupted at Chiadzwa with miners reportedly losing valuable equipment and inventory.
Malik said his company lost a sizeable amount of equipment and inventory to looters.
He said a number of investors feared they would lose their property and valuable equipment.
“We are waiting for government to call the individual investors to negotiate on the value of some equipment and so on but we may be forced to sell for a song,” he said. “We are not so sure it will even be negotiated because you have seen what they have done. This is Zimbabwe and there is no respect for property or investor rights.”
A top executive with one of the diamond mines, who requested anonymity, said Chidhakwa had ambushed miners at a time they thought a more favourable solution would be negotiated.
“Well it is clear there is no reverse because we have been booted out, executive posts for the new vehicle have been advertised and appointments are ongoing as we speak by the board of the ZCDC,” he said.
The executive added the consolidation, according to government’s model, was likely to affect top management executives as most low and mid-level employees are likely to be retained.
A mining consultant close to developments said the merger was positive for Zimbabwe as it ensures transparency and efficient extraction of its resource.
“When we started pushing for cleaning of diamonds, there was a lot of resistance from the miners because they do not want transparency and this is the same reason they were against the consolidation,” said the consultant.
“This is the same reason people want to lie that mining conglomerate is so expensive, it is not because it’s a matter of technology.
Some people were using outdated DMS technology which costs about US$10 per tonne whereas XRT technology which allows you to process in situ can cost as little as US$0,50 per tonne. ZCDC doesn’t need astronomical figures, it needs a bit of capex and operating capital and it takes off.”