Zimbabwe’s top diamond mining firms agree to merge
Zimbabwe’s diamond industry will soon be controlled by one firm as top government officials behind the country’s major diamond mining companies have agreed to comply with a ruling that forces them to merge.
According to The Herald, the move — which aims to bring more transparency and accountability in the sector — would enable miners to extract kimberlite diamonds, which are capital intensive.
But ultimately, the merger seeks to rescue the diamond industry in Zimbabwe as miners operating at Marange and Chiadzwa fields can’t any longer afford to dig any deeper for the precious stones.
A total of seven companies operating in Marange, including one wholly-owned by the state and Rio Tinto's (LON:RIO) Murowa mine, would be folded into a single entity, Mines Minister Walter Chidhakwa told AFP last week.
Those firms were given until yesterday to consult with their boards of directors on the decree, which makes the government the majority shareholder.
“This is a regulatory matter and we have said to them the only way you can participate in diamond mining in Zimbabwe is by being in this company,” Chidhakwa warned last week.
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 miners argue they have neither the expertise nor the resources to search for new deposits underground. Yet Zimbabwe still holds enough diamonds to meet about 25% of the current global demand.
Image courtesy of Rio Tinto.