* Says mining firms are robbing the state

Zimbabwe’s President Robert Mugabe said on Thursday that his government would take possession of all diamond operations because existing miners had robbed the country of its wealth.

Mugabe’s comments came a week after the ministry of mines ordered all mining companies to halt work and leave the Marange fields, saying they had not renewed their licences. At the time it denied it was seizing the mines.

“The state will now own all the diamonds in the country,” Mugabe said during a two-hour interview with state broadcaster ZBC TV.

“Companies that have been mining diamonds have robbed us of our wealth. That is why we have now said the state must have a monopoly,” Mugabe said.

The largest diamond mine in Marange, Mbada Diamonds, on Monday sued the government at the High Court and was allowed to take control of its mining assets.

Chinese-run Anjin Investments also challenged the government ban at the same court on Wednesday, according to a court application seen by Reuters on Thursday.

Mugabe said he had told Chinese President Xi Xinping during his visit to Zimbabwe last December that his government was not getting much from Chinese-owned mining companies.

He said less than $2 billion was remitted from diamond proceeds and those seconded by Government to work with the private companies did not help matters as they also failed to account for the gems.

“We have not received much from the diamond industry at all,” he said. “Not much by way of earnings. I don’t think we have exceeded $2 billion or so and yet we think that well over 15 or more billion dollars have been earned in that area.

“So where have our gold or carats have been going — the gems and there has been quite a lot of secrecy in handling them and we have been blinded ourselves.

“That is our people who we expected to be our eyes and ears have not been able to see or hear what was going on and lots of swindling, smuggling have taken place and companies that have been mining virtually I want to say robbed us of our wealth and that is why we have decided that this area should be a monopoly area and only the State should be able to do the mining in that area.

“You cannot trust a private company in that area, none at all and we should have learnt from the experiences of countries like Botswana, Angola, Namibia etc. We might go partner with a leading diamond company one which is already well established fine, we may be able to do that but then on good terms.

“I suspect this won’t really have broad implications across the industry because Zimbabwe is a known, risky jurisdiction to operate in,” said John Turner, head of the mining group at law firm Fasken Martineau, which does a considerable amount of work with miners in Africa.

“In the last several years, though, a number of people have been saying it is time to get back into Zimbabwe because things will change and get better, so to the extent that private firms were looking at Zimbabwe thinking they were ahead of the curve, this may give them pause for thought,” said Turner, who has worked on some major asset expropriation cases in Africa.

Zimbabwe was the eighth largest diamond producer in the world with 4.7 million carats in 2014, according to industry group Kimberly Process.

However, independent diamond analyst Paul Zimnisky said Zimbabwe’s significance in the global diamond industry has been waning.

In 2013, Marange production accounted for over 10 percent of global supply, but with easily reachable material having already been tapped and firms there unwilling to commit funds for further exploration, Zimbabwe is expected to account for less than 3 percent of global supply this year, said Zimnisky.