Zimbabwe diamond firms revolt, to sue Gov’t over mining ban

At least one of the diamond miners that saw their licences revoked and were asked to leave Zimbabwe earlier this week because their licences had expired, is planning to sue the African nation’s government for breach of contract.

Speaking to Reuters, Zimbabwe's Diamond Mining Company’s (DMC) manager Ramzi Malik said the firm’s contract with the State clearly stipulated that renewing licences was the responsibility of the government, through its state mining arm Zimbabwe Mining Development Corporation (ZMDC).

DMC is not alone. Industry sources told The Zimbabwean that more affected companies are looking for a way out of the situation, which includes legal actions or even international arbitration to challenge the government’s decision.

"There is not going back" — Mines Minister Walter Chidhakwa.

The government has not replied to the mining companies complains yet, but state-controlled Herald newspaper quoted Mines Minister Walter Chidhakwa Friday saying there were “not going back” on the government’s decision, which he qualified as “not negotiable.”

President Robert Mugabe’s government has been accused of a lack of clarity on the particular issue and the country’s diamond industry in general. A decision to merge miners into the Zimbabwe Consolidated Diamond Company has also been controversial, and there is speculation that Rio Tinto’s (LON:RIO) withdrawal from the country last year, was in part due to the increasingly hostile business climate.

Authorities have increased security at the mines in the Marange District after news of looters invading the country’s diamond fields right after operations ceased.