Anjin stalls Marange merger

Anjin Investments has stalled the consolidation of Marange diamond mine companies operating by s dragging its feet in finalising operational modalities with the Mines Ministry.

Diamond sorting at Marange Resources.
Diamond sorting at Marange Resources.

The company’s top hierarchy, which visited Zimbabwe from China recently, was yet to meet officials from the ministry as of last week. This is way past the timeframe given by the ministry, which had projected to have briefed Anjin chairperson Jiang Qingder on the new set-up by the second week of May.

Mines Minister Walter Chidhakwa said the consolidation process would take longer than anticipated because documents had to be agreed to by both parties.

“As government, what we have done is to initiate discussions over the consolidation process. Remember, there is an agreement signed with Anjin. This requires us to sit and discuss with them first. I can’t give a timeline on when the process will be finalised, it’s very difficult to tell,” said Chidhakwa.

“We have to involve other players as well. But from my point of view the issue of consolidation is very important to us as government. It has something to do with structuring the (diamond) industry in a certain way, to give it a new outlook,” he said.

Consolidation

The consolidation process will see the ministry streamline the mining firms from the current six to either two or one. The proposed merger is aimed to facilitate transparency and accountability in the operations of the Marange diamonds – currently shrouded in secrecy and cloaked in accusations of corruption.

The six companies currently operation in Chiadzwa are Anjin, Mbada Diamonds, Marange Resources, Diamond Mining Company, Jinan Mining and Kusena. The government revoked Gye Nyame’s license earlier this year.

All the companies operate as joint ventures with government through the Zimbabwe Mining Development Corporation, which is the primary concession holder of the Marange diamonds.

Anjin is a joint venture between Anhui Foreign Economic Construction Company, ZMDC and Zimbabwe Defence Forces.

Panic mode

The consolidation move has put most diamond miners into panic mode as they are uncertain of their fate. Most of them are streamlining operations by cutting back on their workforce and working hours to reduce costs.

Anjin is in the process of reducing its workforce from the initial 1,800 to just 655. Of its seven processing plants, it is only utilising four, while some of its dump trucks, excavators and front-end loaders are inactive.

The situation is worse at Jinan, which has been retrenching and struggling to pay its workers. The company has closed most of its conglomerate mines while Mbada Diamonds has also started to streamline its operations and is embarking on cost-cutting measures. The situation is no different in DMC and the wholly state-owned Marange Resources.

The deputy Minister of Finance and Economic Development, Samuel Undenge, has been informed that the miners owe suppliers millions of dollars in unpaid goods and services. They are reportedly dragging their feet and reluctant to comply with the government directive, as it threatens their lucrative current set-up.

Revenue shortfall

The veil of secrecy over the operations of the miners has greatly affected government as Treasury struggles to account for the income generated by the mines.

The consolidation process is expected to boost revenue remittance to Treasury and bring transparency and accountability in the highly skewed sector. Finance Minister Patrick Chinamasa and his predecessor Tendai Biti are both on record raising concerns over the shortfalls in revenue collected from Marange miners.

In 2010, the companies contributed $174 million. The figure dropped to $80,6 million in 2011. In 2012 it dropped to $45 million and nothing at all was remitted in 2013.

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