Zimbabwe to nationalise mines, spare Chinese firm

HARARE Thu Feb 17, 2011 1:08am EST

A worker at the Botswana Diamond Valuing Company displays rough diamonds during the sorting process in a file photo. REUTERS/Juda Ngwenya

A worker at the Botswana Diamond Valuing Company displays rough diamonds during the sorting process in a file photo.

Credit: Reuters/Juda Ngwenya

HARARE (Reuters) - Zimbabwe will proceed with plans to take majority stakes in foreign-owned diamond mines in the east of the country but will spare a Chinese-owned mine from a state takeover, a minister said on Wednesday.

"Cabinet will meet next week Tuesday to decide on action to take on foreign-owned companies that fail to meet requirements to cede majority ownership to locals," Saviour Kasukuwere, youth and indigenisation minister, told Reuters.

Referring to the Chinese firm which owns a diamond mine in the east of the country, he said: "We have companies that are already on the ground and have agreed to partner with us. We will respect the conditions offered to such companies."

Zimbabwe's government announced last year it would nationalise all alluvial diamond mines in Marange, in the east of the country. Local media have reported that the army had formed a diamond mining company there. The army has not commented on the reports.

Kasukuwere said the decision to nationalise alluvial mining operations in December was an attempt to curb diamond smuggling.

His comments come as the coalition government formed in 2009 between Mugabe and Prime Minister Morgan Tsvangirai is embroiled in a row over diamond revenues. Finance Minister Tendai Biti, a Tsvangirai ally, has said proceeds have not reached the treasury.

Local media quoted Biti on Wednesday as saying he had commissioned an audit of revenues from diamond sales after receiving $62 million so far against the projected $174 million.

"As a result of these discrepancies, I have since instructed the accountant-general and the Zimbabwe Revenue Authority to verify figures of the diamond proceeds received so far," he was quoted by the state-owned Herald as having told parliament.

Global gem trade regulator Kimberly Process last year allowed Zimbabwe to conduct two auctions for diamonds from Marange. Biti says the country has since secretly sold more but the money remains unaccounted for.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.