New diamond policy allows more than 49% foreign ownership

December 4, 2018
| Report Focus News

HARARE – Zimbabwe will allow foreign diamond miners to own more than 49 percent on condition that rough stones produced from the country are submitted to a beneficiation centre to be operated by the Zimbabwe Consolidated Diamond Company, minutes of a cabinet meeting held on Tuesday show.

Zimbabwe has vast deposits of diamonds although global miner, Rio Tinto has exited the country. This has left locally owned RioZim as well as the state-controlled ZMDC as the major diamond producers in the country.

Cabinet has now said it would allow two other unnamed companies to venture into diamond mining but has given conditions for this.

“Government may waiver that local ownership threshold subject to submission of satisfactory submissions and due diligence that all rough diamonds produced from all diamond mining operations shall be submitted to the Diamond Value Management Centre to be established by the ZCDC for cleaning, sorting and valuation,” the government said in minutes for the cabinet meeting.

Zimbabwe Mines Minister, Winston Chitando said in response to Business Report Online that “the two other companies (to be allowed to mine diamonds) will be announced in due course”. Another condition for the local ownership requirement to be waived is that “private players shall participate in value addition after cleaning and sorting” as well as reserving 10 percent of the gems mined for “local value addition”.

He also highlighted that the decision to allow only four companies to mine diamonds in Zimbabwe was aimed at ensuring that “there is overall effective accounting on the mining processing and selling of diamonds” in the country.

“Four is a number that was felt it would give government and stakeholders their effective monitoring of what is happening on the ground,” said Chitando.

Through the ZCDC, Zimbabwe will own 46 percent in all diamond firms in the country while five percent will go to indigenous partners of the foreign firms. Zimbabwe is also seen reserving majority shareholding in platinum mining companies for the state, a situation that will impact on SA platinum producers, Anglo Platinum, Impala Platinum and Sibanye which have operational units in the country.