Categories: Stories

Diamond firm plans to sue Zimbabwean government over gem mining ban

Zimbabwe's Diamond Mining Company (DMC) plans to sue the government for breach of contract after the Southern African nation banned gem mining in the east of the country, a company official said today.

Zimbabwe's mines minister on Monday ordered nine companies operating in the Marange fields to stop all mining activities and leave immediately because their licences had expired.

DMC general manager Ramzi Malik said that its joint venture contract stipulates that renewing licences was the responsibility of the government, through its state mining arm Zimbabwe Mining Development Corporation (ZMDC).

He said the investment agreements were valid and indefinite and therefore Harare was in breach.

Asked whether DMC would go to court if the government did not reconsider, Malik said: "I am sure we will."

"If you are removing the concession it means you are in breach," Malik said.

Any action by DMC could trigger similar moves by other mining firms, that could set them on a collision course with President Robert Mugabe's government, which has unnerved the industry with its policy to force foreign-owned mines to sell majority shares to locals.

DMC is a 50-50 joint venture between United Arab Emirates-registered Pure Diamonds and ZMDC.

Mines Minister Walter Chidhakwa could not be reached for immediate comment. He said on Monday that Harare's decision was not negotiable and police would be deployed to protect the mines. He added that the state was not nationalising the mines.

Malik, however, said that unknown people had on Monday night broken into the mine and stolen solar panels, generating batteries and office equipment, while fuel from generators and earthmoving equipment was drained.

"The value is in thousands of dollars. There is going to be a lot of loss, a lot," Malik said.

DMC was producing between 35,000 and 45,000 carats of diamonds each month, said Malik, who added that there were no diamond stocks at the mine when it was shut.

Officials from Mbada Diamonds and Chinese-run Anjin said on Wednesday that they were trying to persuade the government to reconsider.-TR

(31 VIEWS)

Don't be shellfish... Please SHARE
Google
Twitter
Facebook
Linkedin
Email
Print

This post was last modified on February 24, 2016 3:47 pm

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Are Zimbabweans giving social media more credit than it deserves?

The role of social media on how people get their news in Zimbabwe is being…

May 3, 2024

Top 20 countries in debt to China- Zimbabwe is not one of them

Ten African countries are amongst the biggest debtors to China, but Zimbabwe is not among…

May 1, 2024

Is Zimbabwe now on the right track?

The Reserve Bank of Zimbabwe’s Monetary Policy Committee, which met on Friday last week, says…

April 30, 2024

Watch: RBZ governor warns those selling ZiG at 20:1 could be buying it at 10:1 in June

Zimbabwe’s new currency further weakened to 13.4407 to the United States dollar today down from…

April 29, 2024

US loses its place as most influential power in Africa to China

The United States lost its place as the most influential global power in Africa last…

April 27, 2024

Zimbabwe central bank chief says street forex dealers cannot destabilise the ZiG

The Reserve Bank of Zimbabwe governor John Mushayavanhu says street money changers who cash in…

April 26, 2024