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Zim’s mystery diamonds
The Zimbabwean
October 16, 2013

http://www.thezimbabwean.co/news/zimbabwe/68901/zims-mystery-diamonds.html

Since their discovery in 2006, Zimbabwe’s diamond deposits have been shrouded in secrecy behind miles of barbed wire fencing, heavily guarded by security forces, with local villagers forcibly removed and local clinic records revealing an alarming number of patients suffering from dog-bite wounds.

In May 2011, Mark van Boschel of the Belgium-based World Diamond Centre, which facilitates the trade of 84 percent of all rough diamonds and 50 percent of polished gems, described the deposits as the largest in the world. A recently unearthed document by the Working Group of Diamond Experts indicates that the officially mined deposits are only a fraction of the treasure that lies underground in Zimbabwe.

Vince Musewe, an economic analyst, says of the mystery surrounding the deposits: “It is extremely difficult to talk of our diamond deposits because there is a tight lead on the subject. There could be a grand and strategic political plan to keep the information confidential.”

Disclosing the true extent of the reserves could torch instability and speculative tendencies in the gem mining sector.

Secret plans

Innocent Makwiramiti, an economist and past Chief Executive Officer at the Zimbabwe National Chamber of Commerce, told The Zimbabwean “It is confusing why authorities are not talking about those reportedly vast diamond deposits. Maybe they have secret plans and would rather treat the issue of such mineral wealth with the strictest of confidence.

“Given reports of looting of the diamonds by top ranking figures in government, maybe they are busy parcelling out diamond fields among themselves and their cronies.”

Most attention has been focused on the Marange fields, where Anjin, Marange Resources, Mbada Diamonds and the Zimbabwe Mining Development Corporation are the biggest producers of the gems.

Before official production was approved by the government in 2006, the area had been a free for all, with panners from across the country descending on Marange to dig for the gems that were sold on the black market.

Blood diamonds

When the extent of the deposits became apparent, the army, police and state security moved in quickly to stem illegal extraction, unleashing wave of excessive human rights abuses and killings of the panners by soldiers. As a result, diamond sector activists campaigned to have Zimbabwe’s gems declared “blood diamonds”.

The European Union immediately placed a ban on the sale of the gems. This was lifted last month.

It is difficult to get information from government departments; the Chamber of Mines passes the responsibility for shedding light on diamond deposits to the Ministry of Mines and Minerals Development, whose officials in turn pass the buck back to COMZ - or claim ignorance.

Sources say a report compiled by the Working Group of Diamond Experts, that has been kept under wraps, indicates that the Marange diamond deposits are just a fraction of what Zimbabwe could be holding underground.

WGDE operates under the Kimberly Process Certification Scheme and helps with research and technical advice in KPCS activities, among them the international transfer of diamond samples from exploration projects.

Massive deposits

Reports released so far indicate that the deposits account for about a quarter of world reserves, but the WGDE map shows that they are actually well beyond that. The existing reports are mostly based on surveys that have been done in the Marange fields. But the document that WGDE compiled after visiting the country between August 31 and September 4 2010 shows that this area is far outstripped by deposits in other parts of the country.

WGDE partly based its report on information that it obtained from the government, the Ministry of Mines and Mining Development in particular, and Geological Survey Department of Zimbabwe.

Despite the deposits indicated by WGDE, diamond production is taking place at only two locations - the Marange fields, measuring about 71,000 hectares, and Murowa Mine in the Midlands. Mining operations have taken place in fits and starts at River Ranch, located close to Zimbabwe’s border with South Africa and shrouded in mystery because of ownership squabbles.

Running out

According to a WGDE map Kimberlites, the diamond bearing rocks, are found in bigger stretches than Marange in numerous regions across the country, with the greatest concentration being in southern Zimbabwe. The biggest deposits are in the Rutenga, Chiredzi and Zvishavane districts in Masvingo and Midlands provinces. Large deposits also exist in Gwanda, Kariba, Victoria Falls and close to Harare.

The concentration could be more than five times the diamonds in the Marange fields, but the map does not show how deep the deposits lie.

Recent reports have warned that surface diamonds are getting depleted, leaving miners with the only option of underground mining, which is more sophisticated and expensive. That diamond mining has so far been mostly confined to Marange could indicate that the deposits there exist close to the surface, making it easy to extract them through panning by artisanal miners and open cast operators.

There were reports in the past that diamonds had been discovered in the Seke and Beatrice districts near Harare, but mystery surrounds plans to mine the gems in those areas.

Similarly, the Reserve Bank of Zimbabwe, in the mid-2000s, extracted some diamonds at a farm near Gweru, but was forced to shut down because it had not followed proper procedures. It is not known what will happen to the deposits in that area.

Smuggling

Even though there are vast deposits of the diamonds in Marange, that has not been matched by revenue flowing into national coffers, amid allegations that the gems are being siphoned out of the country and being diverted to fund private and political projects.

Leaked documents show that the security services are heavily involved in smuggling the gems to Angola, Lebanon and China. Many suitors from as far afield as Russia, Lebanon and Belgium, together with local aspirants and others from several African and Asian countries, are waiting in the wings.

The former Chairman at ZMDC, Goodwills Masimirembwa, in an interview with The Zimbabwean earlier this year, acknowledged that there were about 300 applications for diamond mining permits yet to be processed.

“We are sitting on piles and piles of applications for mining concessions, and that shows how much attention is on our diamonds,” he said.

Economic analyst Eric Bloch cautioned that the gems were receiving too much attention, describing them as largely “industrial” and therefore of low quality.

“People are seized with the diamonds, forgetting that we have a rich list of other high quality minerals that are vital for economic recovery, among them platinum. We need to look beyond the diamonds,” Bloch said.

Low quality

Zimbabwe’s platinum reserves are reputed to be the second largest in the world, while the country also boasts large deposits of gold, coal, copper and nickel.

The new Finance Minister, Patrick Chinamasa, recently acknowledged that Zimbabwe was seeking assistance from the African Development Bank to mortgage its mineral resources to revive the economy.

“We are thirsty when we are in the middle of a pool of water. We have vast mineral resources. We should be able to use those resources to unlock access to capital, which we can use to develop our country and I believe the AfDB has that expertise,” said Chinamasa.

But analysts say mortgaging the vast mineral resources would short-change the economy as they would be undervalued. Museve advocated a system where they would be auctioned, to ensure a proper valuation.

“We can revive the local currency, for instance, by pegging the Zimbabwean dollar against the diamond. Mortgaging would put us at ransom,” he said.

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