Zimbabwe Plans to Merge Diamond Companies into Single Entity

(IDEX Online News) – The government of Zimbabwe is planning to merge all of the diamond miners currently operating into the country into a single entity that will be half-owned by the state. According to a Reuters report, this will include Rio Tinto, which operates the Murowa mine.

This is not an entirely new proposal from the government, which previously said it

wanted to merge some of the diamond companies operating in the Marange area to the east of the southern African country, in which it already owns half the shares, to enhance transparency, reported Reuters.

However, the plan has been expanded to include all of the companies in 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," said mines minister Walter Chidhakwa, as reported by Reuters.

He said that the government would use the value of the companies’ equipment to determine their shareholding in the new mining entity. Any company that does not want to merge would be given compensation and allowed to leave.

The proposal is part of Zimbabwe’s black economic empowerment program, which requires foreign-owned companies to sell 51 percent of their shares to black Zimbabweans.