HomeBusiness DigestBelarus mining equipment deal in limbo

Belarus mining equipment deal in limbo

A US$30 million diamond mining equipment deal between Zimbabwe and Belarus could be in limbo after government moved to arbitrarily consolidate mines operating in Marange fields despite their resistance, the Zimbabwe Independent has learnt.

Bernard Mpofu

Last week, Mines minister Walter Chidhakwa gave diamond miners a 90-day ultimatum to remove their 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.

Sources close to the developments told the Independent this week that the amalgamation of the mining firms, which include DTZ-Ozgeo, had unsettled investors.

DTZ-Ozgeo is a 60/40 joint venture between Econendra of Russia and the Development Trust of Zimbabwe, with operations in Manicaland. Belarus is a Russian ally.

It is also understood that apart from the Russians, Chinese investors who also operated mines in Chiadzwa also expressed concerns over government’s directive on diamond mines. Companies expected to merge include Mbada Diamonds, Marange Resources, Anjin and DMC, among others.

“The deal could be on the verge of collapse following last week’s announcement. This now puts government’s consolidation plans and its bid to court a strategic partner under the spotlight too,” a source familiar with the developments said.

Chidhakwa’s directive follows the diamond miners’ rejection of the initial amalgamation plan, which gave birth to a consolidated mining firm and left government owning a non-dilutable 50% stake and the balance shared among the existing miners.

Chidhakwa last week said the new entity would be 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 Zimbabwe Consolidated Diamond Company (ZCDC),” Chidhakwa said.

“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-Ozgeo; Zvishavane diamond kimberlites currently under Murowa Diamonds; Beitbridge diamond kimberlites currently under River Ranch Diamonds; (and) others which are yet to be discovered or operationalised.”

Chidhakwa could not be reached for comment as his phone went unanswered.

He is on record saying in order to attain a diamond target output of six million carats as projected in the 2016 national budget through the consolidated company, the Reserve Bank, in close liaison with the ZCDC, the ministry of Mines and Mining Development and MMCZ seeks to increase access to long term and working capital financing.

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