Posted: ’21-FEB-07 16:52′ GMT – Mineweb.Net – Archive

Zimbabwe’s leader, President Robert Mugabe, has announced plans that will allow only state-owned companies to mine for diamonds in the country, confirming fears of nationalisation of the country’s mining operations, which miners have dreaded for over two years.

According to a Bloomberg report Wednesday that quoted Mugabe’s late Tuesday interview on state television, the move is aimed at trying to arrest an economic slump that began following the seizure of white-owned farms seven years ago.

The move is also an attempt by the government to control the diamond mining industry after allegations of smuggling from the country’s mines and a diamond rush in the eastern district of Marange, Mugabe was quoted as saying.

“Only government will mine diamonds,” Mugabe said on state television, adding that diamonds will fall into a “special category,” Bloomberg quoted. The president then accused the mining companies who currently operate in the country of selling their diamonds illegally.

On December 7, the Zimbabwean government evicted African Consolidated Resources (ACR) from Marange after thousands of illegal diggers descended on the area and started digging following the diamond find. The area has now been cordoned off and handed to the state-run Zimbabwe Mining Development Corp.

ACR, which is challenging the eviction, had formed alliances with government ministers and officials, Mugabe was quoted as saying.

“Government ministers and members of the politburo joined ACR, but we said no to that company,” he said.

De Beers, the world’s biggest diamond company, discovered the Marange deposit and passed it on to African Consolidated, Mugabe was quoted as saying.

“If the state takeover of diamond mines is passed into law, it will destroy diamond exploration in this country,” Andrew Cranswick, CEO of ACR was quoted by Bloomberg as saying.

Zimbabwe has two diamond producing mines, namely the Rio Tinto and Riozim owned Murowa and River Ranch which is owned by private investors.

But Zimbabwean miners have seen this coming as the ageing leader has repeatedly warned them of looming mass nationalisation of mining operations.

In 2004, his government – in power since 1980 – cancelled Anglo American and Rio Tinto’s exclusive prospecting rights on properties in the country.

Over 28,000 people have been arrested on charges of illegal gold and diamond mining in an operation which started in mid-November to curb the country of illegal mining activities as the country.

In January Washington-based World Diamond Council (WDC) launched an international probe on Zimbabwe’s diamonds after reports emerged that the country’s rough gems were being smuggled into neighbouring South Africa and blended with “blood diamonds” from the Democratic Republic of the Congo (DRC) for onward sale into the world market under fraudulent certification of origin.

But the government dismissed such reports of diamond smuggling as “absolute nonsense”, “politically motivated rumours” and “madness”.

In January Mines and Mining Development Minister Amos Midzi was quoted as saying, “There is nothing of the sort alleged by the World Diamond Council. That madness should stop. We know they think they have found sufficient grounds to vilify us ahead of plans by the EU to renew sanctions.”

The sanctions, banning Mugabe and 100 members of his ruling ZANU-PF from travelling to EU countries, as well as an arms sales embargo and freezing of Zimbabwean assets in European banks, were however renewed Monday.

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