HARARE, March 13 — The Zimbabwe government has finalized plans to consolidate fragmented diamond mining operations in the country into one conglomerate in which it will be the major shareholding with 50 per cent equity while private firms in existing ventures share the remaining 50 per cent, says Mines and Mining Development Minister Walter Chidhakwa.

At least eight companies are mining diamonds in Zimbabwe, with six of them operating in the Chiadzwa area of Manicaland Province, while Murowa Diamonds operates in Zvishavane in Midlands Province.

The government, through the Zimbabwe Mining Development Corporation (ZMDC), owns 50 per cent in all the Chiadzwa-based firms while Murowa is a subsidiary of British-Australian mining giant Rio Tinto Plc but is expected to fit into the new model.

Chidhakwa said consolidation of the diamond mining operations would bring order in the sector and was in line with recommendations from other regional countries such as South Africa and Botswana that have
been mining the gems longer.

“We will as government continue to own 50 percent and all the other companies will share the remaining 50 percent,” Chidhakwa told students at the Zimbabwe Staff College here Thursday. “Their shareholding will be determined by their contributions to the company (in the form of capital and equipment).”

He said the government was expecting its partners in the venture to mobilize capital through rights offers for further exploratory work in the diamond fields, as well as bringing in new equipment for underground mining.

Chidhakwa criticized diamond firms for requesting new concessions alleging that the gems had run out at their existing locations. The firms, he said, had rushed into diamond mining without carrying out sufficient exploratory work to quantify the resources in the areas that they were allocated.

“Because they did not explore, they begin to tell us we have run out of diamonds, they want new concessions,” he said. “We have said no, we will not give you new concessions to scrap for another six months and then ask for new concessions again.”

He said the government wanted the companies to venture into underground mining which would enable them to get higher grades of diamonds. “We are not going to discover kimberlites until we invest in
exploration,” he said.

Exploration, he said, was not only crucial for the diamond companies but for all companies involved in mining.

Chidhakwa said most mining firms had in nearly two decades not bothered to conduct exploratory work.
“The country remains under explored,” he said. “Limited investments in exploration results in limited discoveries of new mineral deposits and expansion of existing projects and this results in limited lifespans
for existing mines.”

He said the mining sector was central in government efforts to turn around the economy. Besides challenges such as shortage of power which were making mining operations expensive, the government was forging ahead with initiatives to boost value addition and beneficiation in the sector, which were pivotal in boosting earnings from the natural resources, he said.

Chidhakwa said the sector required a capital injection of between 5.0 billion and 7.0 billion US dollars in the next five years to allow it to boost capacity utilization. About 40 minerals out of a known 60 are being mined in the country.