Zimbabwe diamond firms face closure

The government is unlikely to renew mining licences for all diamond mining companies in Chiadzwa because they defaulted on their fees and did not show intentions to renew their papers, parliamentarians heard yesterday.

Mines and Mining Development Minister Walter Chidhakwa told Members of Parliament and ministers attending a pre-budget seminar in Victoria Falls that diamond output had drastically dropped in the past few years.

He also told the MPs that Hwange Colliery management could soon be sacked if they did not improve productivity.

Minister Chidhakwa said one of the biggest challenges with diamond mining companies in Chiadzwa was that they did not do exploration work.

"Is this what we deserve as a country from a diamond perspective?" queried Minister Chidhakwa.

"When you look at the figures dropping from a peak of 15 million carats before I became minister and now we're sitting on 3.4 million carats it says something about what we didn't do over the past five to seven years," he said.

"The companies went in and mined diamonds. They didn't do exploration to establish the life of mines. We explored as we were mining and mined as we were exploring, which is very bad mining.

"This is where the issue of consolidating all the companies comes from," said Minister Chidhakwa.

"We've reviewed all the regulatory issues and we've discovered that the licences of all the mines in Marange to date expired and they weren't renewed and they didn't pay their fees over the years.

"If somebody doesn't pay their fees and renew their licence, I don't believe that they should continue mining."

There were seven diamond mining companies in Chiadzwa, but only five — Mbada Diamonds, Marange Resources, Jinan, Anjin Investments and Diamond Mining Company — remain in serious mining, while Gye Nyame and Kusena folded last year.

Minister Chidhakwa said by the end of this year, they expected diamond output of about 3.3 million carats compared to about 4.7 million carats produced last year.

On gold production, he said 13.9 tonnes had been produced so far this year while at the end of this year they expected about 18.7 tonnes and about 20 tonnes are projected for next year.

He said about nine tonnes of platinum were produced in 2014, with output expected to be at least 12 tonnes for this year and 13.3 tonnes for next year.

Minister Chidhakwa said nickel production was projected to be about 16.7 tonnes for next year from 15.8 tonnes for this year and 16.6 tonnes for 2014.

He said chrome production was expected to double in 2016 to more than 461,000 tonnes from about 211,000 tonnes for this year and 408,000 tonnes for 2014.

Minister Chidhakwa said coal production was 6.3 million tonnes for 2014 and this year it was expected to drop to about 3.9 million tonnes, while it was projected to grow to about 4.8 million tonnes for next year.

He said he was not happy with the performance of Hwange Colliery and that despite government interventions, the company's production levels were still very low.

"The President signed new concessions for Hwange Colliery. We gave $32.9 million worth of equipment to Hwange Colliery," said Minister Chidhakwa.

"We gave them a new substantive managing director and they're still producing 8,000 tonnes per month, which is absolutely unacceptable. I said to them:

"If in three months you don't do anything, pack and go".

"Furthermore, Minister Chinamasa cleaned the balance sheet of Hwange Colliery of $65 million which was negative.

"He converted that into equity. Now they've a clean balance sheet and they still want the minister to come and sort out working capital for them. I said this is nonsense."