Zim violates agreement with China

Zimbabwe Mines and Mining Development minister Walter Chidakwa Zimbabwe Mines and Mining Development minister Walter Chidakwa

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.

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.

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.

Source: Tatira Zwinoira for NewsDay