Government has engaged Chinese investors for an out of court settlement after the latter referred the consolidation of the Chiadzwa diamond claims to the Constitutional Court (ConCourt), the Financial Gazette’s Companies & Markets can report.
The two parties have been embroiled in a nasty battle over the consolidation and control of diamond concessions under Anjin Investments and Jinan Mining into the Zimbabwe Consolidated Diamond Company (ZCDC).
Anjin and Jinan are owned by Anhui Foreign Economic Construction Company (AFECC) and the State through the Zimbabwe Mining Development Corporation (ZMDC).
ZMDC and AFECC both have a 50 percent stake in the two companies.
Apparently, AFECC has rejected government’s bid to consolidate concessions under the two mining companies into ZCDC.
They have since referred the matter to ConCourt after they lost at the High Court.
Mbada Diamonds also mounted a legal challenge against the consolidation process while Marange Resources, Diamond Mining Company (DMC), Kusena Diamonds and Gye Nyame were consolidated in March last year.
Information gathered indicates that talks are already underway, with a Cabinet Minister confirming the development.
Minister of Mines and Mining Development, Walter Chidhakwa, confirmed that talks for an out of court settlement with the Chinese investors were in progress.
“They went to the ConCourt and there is no outcome from there. All we said is that we need to understand why they went there and then see how we can move forward. We hope and expect that from the talks, they will stop and withdraw from the ConCourt,” said Chidhakwa.
Government has offered to allow the two mining companies to secure and repossess all their equipment if they withdraw the case, according to sources.
The investors are of the view that government breached special contractual agreements in its bid to consolidate the concessions into ZC-DC.
ZCDC was expected to be the game changer in Chiadzwa after government did not renew licenses of former miners on the basis that they were producing way below projections.
Last year, ZCDC produced a paltry 924 388 carats of diamonds, 62 percent lower than the 3,2 million carats produced the previous year by the Chiadzwa miners.
Finance and Economic Development Minister, Patrick Chinamasa, said ZCDC had been unable to meet its intended targets owing to endless court battles.
“There was a lot of litigation in Chiadzwa when government moved a motion to consolidate the companies because we felt we were not getting as much as we were supposed to. So right now we are trying to engage the Chinese companies to address the issue and move on. In fact, discussions have already started,” said Chinamasa.
The consolidated company is currently mining on the DMC and Marange Resources concessions, and exploring the other two claims owned by Kusena and Gye Nyame.
Anjin, Jinan and Mbada concessions have been lying idle since March last year, when government moved in to consolidate the claims.