Zimbabwe is nationalizing its diamonds industry

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President Robert Mugabe, who has governed Zimbabwe for over three decades and shows no willingness to step down, said his administration will take control of the country’s diamond sector back from private companies.

“Companies that have been mining diamonds have robbed us of our wealth,” Mugabe said in an interview with the state broadcaster this week. “That is why we have now said the state must have a monopoly.”
Last month, the mining minister halted operations for companies operating in Marange, an area in eastern Zimbabwe which at one point was thought to hold a quarter of the world’s diamond reserves.
Walter Chidhakwa, the mines and mining development minister, said the companies were operating illegally, “as the permits which had been granted expired and were not renewed over the last four to five years.” Following the order, the government announced the formation of the Zimbabwe Diamond Consolidated Company (ZDCC) which it says will now oversee mining in the area.
Zimbabwe is one of the world’s largest diamond producers. But Mugabe complains that his country has not garnered as much wealth from the sector as it could have, and in the interview he blames mining companies for this shortcoming.
“Lots of smuggling and swindling has taken place,” Mugabe said. “That is why we decided that this area should be a monopoly area and only the state should be able to do the mining in that area.” The president, who was speaking with the Zimbabwe Broadcasting Corporation (ZBC) as part of his 92 birthday celebrations, claimed the government had only been able to earn $2 billion from the gems, compared with the more than $15 billion that the mining companies had generated from the industry.
“To the extent that private firms were looking at Zimbabwe thinking they were ahead of the curve, this may give them pause for thought,” John Turner, head of the mining group at the law firm Fasten Martineau, told Reuters.
The move to nationalize the sector risks alienating the country’s foreign investors, analysts say, particularly China, which is the country’s biggest bilateral trading partner, at over $1 billion. The Chinese-run company Anjin Investments has gone to court to challenge the government’s decision to take over the country’s mining operations, according to Reuters.
But Mugabe disputed the notion that his nationalizing of the sector will strain his country’s relationship with Beijing.
“I don’t think it has affected any of our relations at all,” Mugabe said to ZBC. “I told President Xi Jinping that we were not getting much from the company, and we didn’t like it anymore in this country.”

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