* Govt banned gem mining, saying licences not renewed
* Diamond firm says govt role to renew licences
* Gem firm says will sue if it does not lift ban
By MacDonald Dzirutwe
HARARE, Feb 24 Zimbabwe's Diamond Mining Company
(DMC) plans to sue the government for breach of contract after
the Southern African nation banned gem mining in the east of the
country, a company official said on Wednesday.
Zimbabwe's mines minister on Monday ordered nine companies
operating in the Marange fields to stop all mining activities
and leave immediately because their licences had expired.
DMC general manager Ramzi Malik said that its joint venture
contract stipulates that renewing licences was the
responsibility of the government, through its state mining arm
Zimbabwe Mining Development Corporation (ZMDC).
He said the investment agreements were valid and indefinite
and therefore Harare was in breach.
Asked whether DMC would go to court if the government did
not reconsider, Malik said: "I am sure we will."
"If you are removing the concession it means you are in
breach," Malik said.
Any action by DMC could trigger similar moves by other
mining firms, that could set them on a collision course with
President Robert Mugabe's government, which has unnerved the
industry with its policy to force foreign-owned mines to sell
majority shares to locals.
DMC is a 50-50 joint venture between United Arab
Emirates-registered Pure Diamonds and ZMDC.
Mines Minister Walter Chidhakwa could not be reached for
immediate comment. He said on Monday that Harare's decision was
not negotiable and police would be deployed to protect the
mines. He added that the state was not nationalising the mines.
Malik, however, said that unknown people had on Monday night
broken into the mine and stolen solar panels, generating
batteries and office equipment, while fuel from generators and
earthmoving equipment was drained.
"The value is in thousands of dollars. There is going to be
a lot of loss, a lot," Malik said.
DMC was producing between 35,000 and 45,000 carats of
diamonds each month, said Malik, who added that there were no
diamond stocks at the mine when it was shut.
Officials from Mbada Diamonds and Chinese-run Anjin said on
Wednesday that they were trying to persuade the government to
(Editing by James Macharia and Louise Heavens)