Mining Companies Consider Litigation Following Zim Gov’t Decision

(IDEX Online News) – Some of the diamond companies ordered by President Robert Mugabe’s government to immediately cease mining operations are considering legal action in response to the move, according to a report in The Zimbabwean.

Sources within the mining industry have claimed that the affected miners are looking for a way out of the situation, including litigation to challenge the government’s decision to demand that the mines be handed over to the state. Mines minister Walter Chidhakwa said that the joint venture companies were mining diamonds illegally as the “permits which had been granted expired and were not renewed.”

Other miners, in expectation of an enforced shutdown of their businesses, have allegedly begun to slow down their operations.

The government has been accused of a lack of clarity on the issue of the country’s diamond industry, with persistent claims that the lack of transparency and clarity has put off potential investors. The government decision to merge the various mining firms into the Zimbabwe Consolidated Diamond Company has also been controversial, and there is speculation that Rio Tinto’s withdrawal from the country in June, was in part due to the challenging business climate.