Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Zimbabwe’s Minister of Mines has ordered all diamond producers operating in the diamond-rich Marange area to halt mining effectively immediately, after the government didn’t renew their licenses.
The firms are meant to leave behind equipment and vacate their premises and a newly created state-owned company, Zimbabwe Consolidated Diamond Co., is expected to take over, The Independent reports.
The move follows a refusal by six mining companies to accept the nationalization of their assets.
The government’s decision follows a refusal by six mining companies, including Anjin Investments, Diamond Mining Co., Jinan Mining Ltd., Kusena Diamonds, Marange Resources Ltd. and Mbada Diamonds to accept the nationalization of their assets.
Minister Walter Chidhakwa said private firms affected, which include Chinese and Russian firms, may negotiate joint ventures with the state mining company. He also said they had 90 days to vacate the area.
Most of the companies in Zimbabwe, one of the world’s top diamond-producing nations, concentrate on alluvial diamond mining, which requires less capital as they are easily extractable through open cast mining.
But the country has practically run out of alluvial gems deposits and existing local miners had argued they had neither the expertise nor the resources to search for new deposits underground.
Last year, Chidhakwa said the decision to merge all diamond miners aimed to bring more transparency and accountability in the sector. It is also supposed to enable small and medium-scale miners to extract kimberlite diamonds, which are capital intensive.
8 Comments
Altaf
This shows that the State has run out of ideas. Its not long back that Zimbabwe was famous for printing trillion denomination currency. Multi nationals were invited to invest and once they set up infrastructure and start producing, then the govt wants to take over every thing. This looks like pure greed. Once again the country will go back to stone age. Govt is thinking that the multinationals are taking away its diamonds. It has to understand that it has resources but dont have technology and money and multinationals have technology and money. Both have to agree to a sharing basis for the benefit of both.
MiniBulk Inc.
This will not end well. Pretty much every African country that decided to kick out non-African business entities end up worse off.
DD
Equipment won’t do much good without trained operators, no?
Zimba 1
These diamond operations have been shrouded in secrecy from the word go. Very few individuals are benefiting from these resources. As long as there is no transparency in the Diamond sector, no amount of ‘rejigging’ make these operations contribute to the nation’s fiscus.
Generally speaking, Mineral wealth has been more of a curse that a blessing to most African countries: it brings so much suffering and little joy to the greater population, benefiting only a few connected individuals.
Gary
Maybe they should have asked the Zambian government how they fared with nationalising the mines? Obviously knowledge and common sense did not play a part in this decision.
Zimba, I agree with you, mineral wealth has been more of a curse than blessing to the man on the street.
Mark Harder
Just watch. The new owners will be a bunch of Mugabe cronies and their relatives. Just like the farms..
patentbs
Anybody that would put 5 cents into a shthole deserves to lose it! This nation has always been irresponsible and soon will be back with ‘Monopoly money’. No one has the nation at heart. Not miners, not government officers, not citizens. This move proves it!
unfly
I have 0 problem with African nations taking control of their resources. Africa is the most resource rich continent in the world, bar none. why should other countries be getting rich off of them while many Africans live in poverty?