Harare, September 01: Zimbabwe’s government is demanding 50 per cent of all investments in the country’s diamond wealth, local media reported Tuesday.
“With diamonds, we want 50-50 per cent shareholding in joint ventures with investors,” Mines Minister Obert Mpofu was quoted by the state-controlled Herald newspaper as telling a parliamentary committee on mining. “That’s not negotiable.”
Mpofu said the government was drafting legislation to put its stake into law.
Zimbabwe has three diamond mines, one of which, the Chiadzwa diamond field in eastern Zimbabwe, is controlled by the state. The military has been accused of gross human rights abuses against diamond diggers and residents in Chiadza, prompting calls for Zimbabwe’s suspension from the global diamond trade.
After visiting the area in June the Kimberley Process – a global watchdog that tries to prevent trade in diamonds that fuel conflict – called for the military be withdrawn and Zimbabwe’s diamond sales to be halted for at least six months.
Mpofu on Tuesday again insisted that the troops would only be withdrawn once “adequate (private) security is in place.”
He also told the committee that the government was planning on revoking all current privately-held mining claims because they were “not doing any work” on the claims.
The government was drafting regulations “rescinding everything,” he said. Future claim holders would have to prove they were developing their claims, he said.
His remarks follow his assurances to investors at a conference this year that the government was preparing an “investment-friendly” package for foreign mining companies. Mpofu had hinted then that the government would scrap proposals for a 51 per cent government stake in investments.
Prime Minister Morgan Tsvangirai, President Robert Mugabe’s partner in the six-month-old coalition government, had also said government would scale back its demands.
Industry executives have warned that a 50-per-cent state stake could deter investors at a time when the cash-strapped government is desperate for revenue.
They blame the international recession and uncertainty over governments’ plans for mining for the reduced activity at mining concessions.
The government seized the Chiadzwa field from British-based Africa Resources Limited in 2007, allowed unlicensed diggers to overrun it and in November last year, drove them off in a military crackdown and gave it to the bankrupt, state-owned Zimbabwe Mining Development Company.
In a year of operations the state had earned only 8.2 million dollars from the Chiadza fields, Mpofu said.
—Agencies