Zimbabwe Aiming to Merge All Diamond Miners Into One Company

Zimbabwe wants to merge all diamond mining firms in the country, including the local unit of Rio Tinto, into one company in which the state will own just over half of the shares, the country’s minister of mines said in parliament.

The government announced previously that it aims to merge some of the diamond companies operating in the Marange area, in which it already owns 50 percent of the shares, to improve transparency.

Mines Minister Walter Chidhakwa made the surprise comments to a parliamentary committee, saying that all the country’s mines would be merged, including Rio Tinto's Murowa 78-percent stake in the diamond mining operation in the south of the country.

"We are very clear, this is a regulatory matter and we have said to them the only way you can participate in diamond mining in Zimbabwe is by being in this company," he said, in comments cited by Reuters.

Production at the Murowa mine rose last year by 7 percent to 344,000 carats.

Chidhakwa said the value of the companies’ equipment would be used to determine their shareholding. And firms that reject the merger proposal would be awarded compensation and allowed to leave the country, he added.

President Robert Mugabe's regime is putting in place a black economic-empowerment program, requiring foreign-owned companies to sell 51 percent of their shares to Zimbabweans.