11 January 2013

Zimbabwe: Meikles Partners ZMDC in Diamond Mining

LISTED diversified group Meikles Ltd has partnered state-owned mining group - Zimbabwe Mining Development Corporation (ZMDC) - for a diamond mining venture near Chiadzwa, businessdigest has learnt.

Highly placed sources said the two parties were allocated a piece of land on the confluence of Odzi and Save Rivers in the diamond rich area.

Meikles' involvement in diamond mining follows a November 2013 announcement by group chairman John Moxon that the company had formed a mining arm, Meikles Resources Private Limited (Meikles Resources), which at the time was still to conclude exploration for an undisclosed mining venture which required substantial funding.

Meikles Resources, according to Moxon in the group's interim results for the period to September 30 last year, is an indigenous company, wholly owned by Meikles and has an objective to focus on the development of mining and resource opportunities in Zimbabwe.

Moxon said profits from Meikles Resources are expected to exceed those anticipated for the entire group as presently constituted over the coming years and will therefore be of material significance.

"Meikles Resources has commenced exploratory mining operations on one opportunity and will start full mining operations as soon as the full extent of the resource has been established," Moxon said in the interim results statement, adding further discussions would take place on further resource opportunities.

Moxon said the mining arm would seek to combine local and international skills together with the group's financial resources within the framework of its indigenous status.

"This entity will capitalise on the long-standing reputation and history of the group in Zimbabwe and will apply the group's customary high standards to the implementation and operation of this division for the benefit of all stakeholders," he said.

The Meikles Resources venture adds to ZMDC's diamond mining activities where it already has joint ventures with Chinese investors in Anjin Investments, Diamond Mining Corporation and Mbada Diamonds.

Meikles Ltd executive director Mark Wood refused to comment on the matter. In November last year ZMDC chairman, Godwills Masimirembwa, said the state-owned mining vehicle was looking for potential partners to exploit new diamond deposits after concluding preliminary exploration in a new area in Marange.

Masimirembwa said the exploration proved there were huge deposits of the precious stones in the 1,8 million hectare area.

Zimbabwe's diamond mining industry, according to analysts, is lucrative.

Last year the World Bank said Marange diamonds, believed to be accounting for 25% of the world's diamonds, are cheaper to mine because they are alluvial.

The bank said overall diamond production in Zimbabawe could reach 15,2 million carats a year by 2018 with an investment of US$150 million.

Last year, leading local research firm Equity Communications said Zimbabwe accounted for 8,9% of global rough diamond production in 2011, producing 11,1 million carats out of 125,6 million carats produced globally

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