Zim violates agreement with China

Zimbabwe risks angering its “all weather friend” China, after unilaterally stopping Chinese-owned diamond producers from operating in violation of an agreement signed in 1996.

BY TATIRA ZWINOIRA

On Monday, Mines and Mining Development minister Walter Chidakwa announced at a Press conference that diamond firms Anjin, DMC, Jinan, Mbada, DTZ OZGEO, Rera, Gye-Nyame, Kusena and Marange Resources were to stop operations and leave the mining area covered by the special grants for diamonds. Chidakwa said the position was final and there was no room for further negotiations.

This came after plans to amalgamate the producers into the Zimbabwe Consolidated Diamond Company failed to yield desired results.

Walter Chidhakwa_Minister of Mines Mines and Mining Development minister Walter Chidakwa

Chinese investors have a 50% stake in Anjin and Jinan.

According to an agreement between Zimbabwe and China on the encouragement and reciprocal protection of investments, disputes between contracting parties had to be settled through diplomatic means. The agreement went into force on March 1, 1998.

Article 8 of the agreement stipulated that “any dispute between the contracting parties concerning the interpretation or application of this agreement shall, as far as possible, be settled by consultation through diplomatic channels”.

It said if a dispute “cannot be settled within six months, it shall, upon the request of either contracting party, be submitted to an ad hoc arbitral tribunal”.
Anjin Mining Investments (Pvt) Ltd and Jinan Mining had pledged to invest $132, 2 million and $200 million, respectively over the last seven years.

Chidakwa said of Jinan’s pledge, $137 million has been invested to date, while Anjin’s actual investment was unknown, as the company failed to produce audited financial accounts to government.

Chinese nationals representing one of the companies told Chidakwa at the Press briefing that government’s move was in violation of Article 4 of the agreement.
The article stipulates that “neither contracting party shall expropriate, nationalise or take similar measures against investments of investors of the other contracting party in its territory, unless the following conditions are met; for public interest, under domestic legal procedure, without discrimination and against compensation”.

“You said we do not have a licence but we have a licence. It’s government, which did not update the licence,” a Chinese official told Chidakwa.

In response, Chidakwa said the company must update its licence and not government.

“Yes you are very right and quote very well. But, the agreement does not say players or investors of any of the contracting partners can operate in the two jurisdictions, Zimbabwe and China, without licences, it does not say that. It actually says that companies operating in Zimbabwe from China and everywhere in the world must comply with Zimbabwean law,” he said.

7 Responses to Zim violates agreement with China

  1. John Edwards February 24, 2016 at 6:23 am #

    The GOZ is kissing goodbye to FDIs and Chinese mega deals by disrespecting the Rule of Law and signed Agreements. The Diamond companies will resort to the Courts and this will take a long time to resolve. This action alone will discourage any future foreign investors from investing in Zimbabwe in the absence of respect for property rights. The govt is shooting itself in the foot!

  2. observer February 24, 2016 at 9:16 am #

    ok

  3. sky February 24, 2016 at 9:20 am #

    The govt should nationalize all the mines , be it cooper mine , diamond , silver ,uranium , platinum the govt must own all the mines in Zimbabwe. what is underneath the ground in Zimbabwe belongs to Zimbabweans, all of it. The govt must buy all the needed equipment to extract the precious minerals from under the ground and employee the best people for the Job , if they have to advertise in an American newspaper for a qualified geologist/ equipment operator so be it. after getting the minerals the govt should stock the minerals in vaults so as to increase demand and only sell as we need the money. The proceeds from minerals should go to construction of roads (and removal to tollgates) , free health , free tablet PC s in schools , zupco buses and social welfare.

  4. Exporter February 24, 2016 at 2:21 pm #

    The World over its well known that govts are poor managers of commercial businesses. In Zimbabwe for the same reason most parastatals are loss making coz poor of management of these businesses. Govts tend to interfere with the operations of parastatals by failing to appoint senior Mangers and Board of Directors on merit. In running parastatals govts make political rather than business decisions. Instead of nationalising of these mines they should have been privatised. All that was needed was to put systems into place to account for diamonds produced and exported.

    • sky February 25, 2016 at 10:46 am #

      world over ??? stop generalising. before 2000 most parastals were making profit in zimbabwe , air zim , zisco ,zbc etc

  5. john moyo February 24, 2016 at 6:49 pm #

    Rule of law is vital….The Chinese believed they had a blank cheque encouraged by the chaotic legal environment….it also demonstrates noone is safe where there is no rule of law and clear policy!

  6. garikayi February 25, 2016 at 9:37 pm #

    MaChina aye avakuziva commercial English. Welcome to Africa shishi zhing zhong. Your friend Robert is sleeping 90% of the time. Start packibg for f@#$g bags and go. It’s all over

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