Zimbabwe says to merge all diamond mines under one company - CNBC Africa

Zimbabwe says to merge all diamond mines under one company

Mining

by Reuters 0

Zimbabwe is planning to merge all diamond mining companies, including the local unit of Rio Tinto, into one big firm. PHOTO: Ritani

Zimbabwe is planning to merge all diamond mining companies, including the local unit of Rio Tinto, into one big firm in which the state will own half of the shares, the minister of mines said on Thursday.

President Robert Mugabe's government is pursuing a black economic empowerment programme, known locally as indigenisation, which requires foreign-owned companies, including mines, to sell 51 per cent of their shares to black Zimbabweans.

The government had previously said it wanted to merge some of the diamond companies operating in the Marange area to the east of the southern African country, in which it already owns half the shares, to enhance transparency.

But mines Minister Walter Chidhakwa told a committee of parliament that all the mines would be merged, including Rio Tinto's Murowa diamond mine in south-central Zimbabwe.

"We are very clear, this is a regulatory matter and we have said to them the only way you can participate in diamond mining in Zimbabwe is by being in this company," he said.

Rio Tinto owns 78 per cent of Murowa mine, which last year increased diamond output by 7 per cent to 344,000 carats.

Chidhakwa said the government would use the value of the companies equipment to determine their shareholding. Companies that did not want to merge would be given compensation and allowed to leave, he said.

Zimbabwe last year earned $396 million, down from $456 million the previous year, according to central bank data.

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