Zimbabwe is undertaking a massive nationalisation of its diamond mines.

Control of all diamond mines will be given to a single company that is owned by the Zimbabwean Government.

“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,” Zimbabwean mines minister Walter Chidhawka told Reuters.

Companies that refuse to merge will be given ‘compensation’ and be asked to leave.

President Robert Mugabe’s government is pursuing the merger in the name of domestic economic empowerment, known as indigenisation.

The indigenisation programme requires foreign-owned companies, including mines, to sell 51 per cent of their shares to Zimbabweans.

Taking over the diamond mines is just the latest step.

The government has threatened to kick out all foreign miners to gain greater control of its resources, it has stopped issuing new mining licences to foreign companies, and increased mining licence fees for foreigners from 100 to 5000 per cent depending on the mineral.

Contradictorily, Zimbabwe's prime minister has asked Australia for 'bilateral economic co-operation' to help fund new projects.