Zimbabwe – Mugabe wants to nationalize all of the country’s diamond mines

Zimbabwe – Mugabe wants to nationalize all of the country’s diamond mines

On the 3rd March 2016 President Mugabe declared that in order to halt what he described as the theft of his country’s wealth, his government were in the process of taking over the ownership of all diamond mining operations in the country.

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Background

On the 3rd March 2016 President Mugabe declared that in order to halt what he described as the theft of his country’s wealth, his government were in the process of taking over the ownership of all diamond mining operations in the country. This came only a week after he denied that he was seizing possession of the mines, whilst at the same time informing all mining companies that their licenses had either been revoked or were not being renewed and as a result they had to stop work and leave the Marange fields with immediate effect.
In a recent interview Mugabe said ““The state will now own all the diamonds in the country. Companies that have been mining diamonds have robbed us of our wealth. That is why we have now said the state must have a monopoly”.

Production figures

According to figures released in 2014, Zimbabwe produced 4.7 million carats of diamonds in 2014, making it the 8th largest producer of diamonds in the world however these numbers are in decline. In 2012 over 12 million carats of diamonds were produced, compared to 3.36 million in 2015.

In 2013 over 10% of the world’s supply of diamonds came from the Marange diamond fields however this is expected to be as low as 3% in 2016. The diamonds are not only becoming harder to extract but decisions like this from Mugabe’s government and the resulting increasingly hostile business environment, are also discouraging many of the mining companies from committing more funds.

Legal challenges

Following this announcement from Mugabe, Mbada Diamonds, the largest mine in the Marange diamond fields, as well as the Chinese-run Anjin Investments have sued the government in the country’s High court, challenging the ban and insisting that they must be allowed to take back control of their mining assets.
The high court in Harare has since twice ruled that the government must allow Mbada diamonds to return to the Marange diamond fields and take back control of their assets. The government has to date failed to comply to the court order.

On the 17th March 2016 the high court condemned the eviction however ruled that by law whilst Mbada had permission to be onsite in order to secure their assets, due to the expiry of their special grants, they did not have permission to resume any mining operations. The judge warned them that disregarding this ruling would be considered illegal and dealt with accordingly.

There have been some reports that the now deserted mines have had to increase their onsite security, in order to fend off looters.

Both Mbada diamonds and Anjin Investments are continuing to challenge the forcibly imposed mining ban and have requested that the court declares the actions of Mugabe to be unlawful. The government is continuing to openly state that they will not be going back on their decision and that it was not up for negotiation.

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