THE STORIES BEHIND THE HEADLINES

Abu Dhabi

London

New York

Tuesday 20th March 2018

Opening Diamond Fields to Boost Zimbabwe's Economy

Politics

Fazila Mohamed

Wed, 13 Feb 2019 10:19 GMT

Zimbabwe recently approved a new policy to grant licenses to overseas companies for diamond exploration and mining, as part of a strategy to attract foreign investors to support an economy currently in dire straits.

During his recent visit to Russia, President Mnangagwa said, "Zimbabwe has opened a small window for foreign companies to participate in its diamond industry and maximize exploration". 

In a joint announcement with President Mnangagwa, Alrosa chief executive Sergey Ivanov said, "Today we see opportunities for a new stage of our partnership. We will develop new mining operations in the country with the support of the Zimbabwean Government".

"Alrosa has already established a Zimbabwean subsidiary last December. Our geologists and mining engineers will arrive in the country to start operations in February", said Ivanov.

The world's largest diamond producer by output, Alrosa was re-issued with a mining licence by the Zimbabwean government in January after it had been withdrawn in 2016.

Two other companies, Botswana Diamonds and Vast Resources, have received a preliminary geological assessment and are undertaking exploration work in partnership with a local community trust. Murowa Diamonds is the only private company mining diamonds in Zimbabwe.

Currently the biggest producer is the state-owned Zimbabwe Consolidated Diamond Company (ZCDC), with its production reaching 2.5 million carats in 2018. ZCDC has invested 21 million US dollars in exploration of known conglomerate deposits and to survey the country for diamondiferous kimberlite pipes.

Mines and Mining Development Minister Winston Chitando said, "The government has come up with a new mining policy adopted at a cabinet meeting to increase the number of private companies operating in the country's diamond mining sector to four. This will give government and all stakeholders effective monitoring of what is happening on the ground."

Zimbabwe's diamonds were condemned on the world market by the Kimberly process in 2001 after allegations of human rights abuses and associated theft at the country's biggest fields in Marange. Laws introduced shortly afterwards to protect these valuable resources made it difficult for foreign investors to operate or establish partnerships with the country's diamond mining companies.

The government of Zimbabwe then successfully lobbied for the renewed recognition of its diamonds on the world market through the Kimberly process, after a long and protracted struggle. 

Since the removal from power of Robert Mugabe in November 2017, President Mnangagwa has gone around the world - including to the World Economic Forum in Davos - promoting Zimbabwe as an attractive destination for investors. Under Mugabe, Zimbabwe expelled all diamond mining companies, including two Chinese joint venture companies, citing the expiry of licences after the companies had refused to merge with the state-owned ZCDC. 


Africa