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  • Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles

  • Marange diamonds running out
    Maggy Mzumara, The Financial Gazette
    November 07, 2013

    The quality and quantity of diamonds mined at the controversial Chiadzwa diamond fields has been on a decline since 2012, casting doubts over the possibility of the diamonds sector bailing the country out of the current quagmire. While many have held their breath on the hope that the country’s diamonds would take Zimbabwe out of the woods, the Financial Gazette can reveal that currently the diamond producers themselves need bailing out to enable them to acquire the equipment needed to mine the gems underground.

    Despite official claims that the diamond fortunes are still as glittering as before, the Financial Gazette is reliably informed that the shine has been waning since last year because the alluvial (surface) diamonds are fast running out at the Chiadzwa minefields.

    Because there is now insignificant diamonds in the alluvial ore, the little that is found is of poor quality than before.

    While there is hope that economic grade diamond deposits exist underground, the companies operating in Chiadzwa need equipment to get to the gems, which is costly. As such, there is need for them to invest in state-of-the art equipment for them to extract the gems below the surface. The biggest challenge is that some of the companies have no financial wherewithal to invest in the equipment. The country got the most from diamonds in 2011 and thereafter production has been on the decline in terms of quality and quantity, according to the Zimbabwe Mining Development Corporation (ZMDC), which has an interest in all the companies operating in Chiadzwa.

    In 2011, diamonds were contributing to the fiscus between US$ 23 million to US$33 million a month.

    “Currently contributions of such magnitude are not possible, but that is not to say that it won’t happen again in the future. It can again. Just that we were mining alluvial diamonds but now we need to mine conglomerates. We have to go deeper and we need equipment for that. We also need to expand and explore further. There is a lot of untapped land and we need to establish what we have under the ground,” said Florence Gowora, acting board chairperson for ZMDC.

    “Government is currently looking at ways to enable the diamond companies to acquire capital to expand their operations so that we can unlock the value we have underground. The future is bright for the mining sector. We are focusing on how we can grow it (the sector).”

    Gowora said while it was nothing unusual for the nation to look at the diamond sector expectantly, capitalisation challenges were affecting production while the companies operating in Chiadzwa are also desperate to plough back what they are earning into their operations. Mines and Mining Development deputy minister, Fred Moyo was quoted recently saying that surface ores have exhausted but expressed hope that the country still has opportunities to explore further for more alluvial diamonds.

    “It is naturally expected in mining that surface ores will exhaust first, specifically for diamonds. It is important to note that the area of Chiadzwa is not explored, really. We cannot exhaust deposit of this nature with five years of operating… the diamond area is not well explored, meaning we still have more of the surface diamonds,” Moyo said.

    Although reluctant to say much, Marange Diamonds corporate affairs manager, Muriel Nqwababa, confirmed that surface gems were getting exhausted.

    “Our position is the same as that of the deputy minister,” Nqwababa said.

    Compounding the situation are poor prices being fetched on the international market at a time when Zimbabwe is still trying to gain a foothold on the mainstream market following years of bickering with the Kimberly Process.

    “We have not been participating in the international space and prices of our diamonds have also not picked up,” Gowora said, although she expressed optimism that the recent mission to Zimbabwe by Antwerp would result in better fortunes for the local diamond industry.
    “Antwerp is promising to get better value for Zimbabwe,” she said.

    Meanwhile the Minister of Mines and Mining Development, Walter Chidhakwa has said that government is mulling options for an international bond to be used to raise money for development of the country’s mining sector.

    Chidakwa is yet to meet with Minister of Finance Patrick Chinamasa to devise a plan for the bonds within a month’s time.

    Zimbabwe is billed as the fourth largest diamond producer in the world.

    The nation’s total diamond production from Marange increased from 8,7 million carats in 2011 to 12 million carats last year.

    This year, production is expected to rise further reaching over 17 million carats. But for this to occur, capital and equipment are needed..

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