Zimbabwe Government Seizes Chiyadzwa Diamond Fields Again

Diamond Miners in Marange, the so-called illegal miners, have been moved off the Diamond Fields. Two companies were invited to partner a government company and exploit the Diamond Field, but these have now been banned from mining the areas on a legal technicality. Their multi-million dollar equipment remains in the hands of their "partner", the government-owned ZMDC, which is still free to use that equipment to continue mining. It is plunder and confiscation by other means, couched in civilised language, but plunder nevertheless.

Harare, Zimbabwe, 13 November 2009

The Zimbabwe government has ordered an immediate stop to the continued mining of diamonds at the Chiyadzwa Diamond Fields in Marange.

The reason given is that an "environmental impact assessment study has not been carried out by the mining companies."

But the real reason, I am told, is that one of the companies, Mbada Mining, which I have previously called "The Secretive One", may not have been playing ball with some of the local bigwigs who wanted to be rewarded for making it possible for the company to mine at Chiadzwa.

State media a few days ago set the tone by vaguely referring to the way Mbada was operating, saying they had hired and chartered planes to fly into and out of Zimbabwe daily, with the insinuation being that they may be involved in smuggling their haul from the Diamond Fields.

So, last week, both Mbada Diamond Mining and Canadile Miners were issued with Order 115 which bars them from any productive work on the claims pending completion of the Environmental Impact Assessment (EIA) report "as required by the law."

Which, of course, raises the question of who licenced to mine in the first place. And those who did the licencing (the government), did not put this EIA report down as one of the conditions for issuing the licence?

Someone was in a hurry to make money, that is what this means. But now that they are not making the money that they thought they would, they have decided to ban the two companies from further exploitation of the Diamond Fields.

And it is instructive to note that only Mabda is singled out for special mention by the government of Zimbabwe in the statement stopping Diamond Mining:

“Mbada commenced operations without carrying out an EIA and we are simply applying the law. We enforced Order 115 to protect the environment. We expect them to come through with an EIA report."

That should tell you something, although both companies at the site are affected.

Now, since these two parties are partnes of the Zimbabwe Mineral Development Corporation (ZMDC), why is there no mention of this government company, which should also have seen to an EIA Study?

Simple.

This move is seizure of assets by other means. What is means is that the ZMDC can now continue mining the diamonds while the other two companies are barred and told to do the study.

The ZMDC will use the equipment (worth more than US$100 million) which the two companies had put on site at the Diamond Fields. They are, after all, a partner to the two companies but are not banned and can operate freely.

It is a blow to investor confidence. There is nothing that the South African government, where these two banned companies are allegedly based can do about this, despite having signed a Bilateral Investment Protection and Promotion Agreement (BIPPA) with Zimbabwe.

Mugabe has taken the clever route, of having someone else capitalise his bankrupt State Company for him, then finding a legalistic excuse to kick them off the Diamond Fields and continue plundering as before.

Take special note of the fact that the Government specifically says that the EIA report that will be produced by Mbada (the name means "leopard" in the local Shona language) will have to be approved by the State before the companies can resume operations at the Zimbabwe Diamond Fields.

The EIA can take anything up to two years to conduct. And then the government could simply drag its feet over approving the report, giving its people enough time and room to continue the plunder at the Fields.

ZMDC will be able to continue mining as before throughout this period.

No doubt about it, this is a shocking move, and the sort of thing that we expect the Prime Minister and his party to speak out against, instead of fighting for Governor posts and Ambassadorial appointments!