Zimbabwe to Oust Miners From Gem Field Over Missing Revenue

Zimbabwe plans to cut the number of companies running the Marange diamond fields to one or two from seven by the end of the year after they failed to properly account for revenue, Mines Minister Walter Chidakwa said.

The southern African nation’s government has started evaluating equipment and staff at the fields in the east of the country, Chidakwa said in an interview yesterday in the capital, Harare. Companies owned by Chinese, South African and local investors operate the field.

“When you restructure, one way or the other you have to take into account the number of people employed and evaluate the equipment that is being used,” Chidakwa said. “We have invited representatives of the mining companies to discuss the policy direction we are taking.”

A parliamentary committee last year said tens of millions of dollars of revenue due to the government never found its way to the Treasury. The committee said while the field could supply a quarter of world demand, the government received only $41 million in revenue in 2012.

Advocacy groups including Ontario-based Partnership Africa Canada, have accused the ruling Zimbabwe African National Union-Patriotic Front of looting about $2 billion from the Marange fields, partly to fund the nation’s military. The party denies the claims, citing the European Union’s lifting of sanctions on diamond exports in October.

Joint Ventures

State-owned Zimbabwe Mining Development Corp. operates the fields in separate joint ventures with Mbada Diamonds (Pvt) Ltd., Anjin Investments Ltd., the Diamond Mining Co., Gye Nyame, Jinan Mining (Pvt) Ltd. and Kusena. ZMDC is also active in the area through its wholly owned Marange Resources unit.

Government representatives will meet with Anjin next month, while Diamond Mining Co. and Jinan have asked for more time, Chidakwa said. Legal issues have to be addressed, he said.

Anjin’s chairman will be present for the meeting, Lovemore Machacha, a director at the company, said by phone yesterday.

“We will take it from there after hearing the government’s position,” he said.

Calls to management at DMC, Gye Nyame, Kusena and Jinan were unanswered. George Manyaya, the corporate affairs executive at Mbada Diamonds, was out of the office when Bloomberg News called.

ZMDC Chairman David Murangari, who was appointed on March 31, declined to comment as he and his board are “trying to acquaint ourselves to the organization and its operations,” he said by phone yesterday.

Mining Estimates

Zimbabwe is expected to mine 16.9 million carats this year, according to Mines Ministry estimates. Last year, the country produced 8 million carats, generating $685 million.

The Antwerp World Diamond Centre wants to sell 12 million carats of diamonds from Zimbabwe this year, which would make the southern African country one of the six biggest suppliers to the Belgian-based trading group, Chief Executive Officer Ari Epstein said on March 13.

The country is equipping its Mining Promotion Corp. to drive the search for new mineral reserves, which could help it update its database and attract fresh investors to the industry, Chidakwa said on April 23.

To contact the reporter on this story: Godfrey Marawanyika in Harare at gmarawanyika@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Ana Monteiro, Tony Barrett, Dulue Mbachu

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