Peta Thornycroft Harare
CONTROVERSIAL alluvial diamond mines at Marange in eastern Zimbabwe, most of which have stopped or greatly reduced operations, will be merged into one company.
All chief executives and 60 board members of the seven firms now operating there, will lose their jobs before the month end.
Mbada Zimbabwe, with strong South African connections, was the most successful of the diamond companies forged during the brief and turbulent history of these alluvial fields in the 150 000ha Marange Communal lands.
Mbada succeeded through its contacts with top Zanu-PF leaders.
South African David Kassel, executive chairman of scrap metal merchants, New Reclamation, was one of the main players in Mbada’s start-up in 2009 through a Mauritius-based company Grandwell Holdings which had shares in the Zimbabwe diamond company.
Joint ventures
All but one of the companies operating in the Marange area were in joint ventures with the Zimbabwe government. The seventh was wholly owned by the government but has failed to produce rough stones for the last few years.
Many say that the stock of easily-accessible gem quality stones had dried up and that none of the companies could, or would, invest enough to dig deeper to look for gems.
Mines and Mining Development permanent secretary Francis Gudyanga told Zimbabwe state media last week that the government was concerned because the mines were “haemorrhaging” the economy instead of driving growth in a poor part of the country.
“The emerging company, after consolidation, will assume all the assets and liabilities of all the companies that are being merged.
The shareholding of these small companies will be determined by their equipment assets plus what they financially inject into capitalisation and exploration,” said Gudyanga.
“The chief executive and boards of the current companies will be dissolved but the workforce will essentially be retained, subject to conditions that may be set.”
Many workers from the individual companies operating in the Marange area claim they have not been paid for months and some, from Mbada, were demonstrating for weeks earlier this year outside the company’s Harare head office.
“The question of cancelling licences for under-performing companies is now not going to arise,” Gudyanga said.
“All the current entities will no longer exist or transact as they do now. There will be one chief executive, one board, and the government will have 50 percent shareholding in the new company, the Zimbabwe Mining and Development Company,” he said.
Violence
The site of Mbada’s licence within the Marange communal lands, near Mutare, capital of Manicaland, had seen much violence.
De Beers had once held a licence for exploration on that section of Marange, but had not prospected the sites, so the quantity and quality and site of valuable stones was not fully known when it allowed its licence to expire in 2006.
A group of mainly white Zimbabweans formed a UK registered company, African Consolidated Resources (ACR), which applied for and then won that licence.
But as it started operations, Zimbabwe’s security forces chased ACR from its mine, without due process.
Artisinal miners then moved on to this site and in 2008 the state sent in security forces and this led to the death of at least 15 miners.
After that, the state gave a licence to Mbada.
Kassel said on Monday he was out of the country and therefore could not make any comment.