30 January 2018

Zimbabwe: Govt Seeks Diamond Sector Investors

THE Zimbabwe Consolidated Diamond Company is working on a structure to lure private investors back into the diamond mining industry after Government ordered companies that have been operating in Marange to vacate in 2016, as their licenses had expired

Government is working on amendments to the Indigenisation and Economic Empowerment Act to limit the 51 /49 percent shareholding requirement to only two minerals, diamonds and platinum. The Government in 2015 did not renew licences of private players in the diamond mining industry after realising that the Treasury had not accrued meaningful revenues from the industry. ZCDC was subsequently issued with exclusive mining rights in Marange. A source with the knowledge of the matter said ZCDC was working on a structure to attract investment.

"The Government wants partners to help fully exploit the potential in the diamond industry just like in all other sectors of the economy but the difference here is we want legislative protection to retain control as highlighted by Minister (of Finance and Economic Planning Patrick) Chinamasa," said the source who declined to be named.

"Government has already invested extensively in diamonds through the RBZ (Reserve Bank of Zimbabwe) which last year pumped $80 million into the ZCDC operations and Government's desire is for all this to be taken care of in the envisaged partnerships."

Zimbabwe is this year expected to produce three million carats of diamonds up from 1,8 million carats last year, according to Mines and Mining Development Minister Winston Chitando. In 2016, ZCDC produced 961 000 carats which increased to 1,8 million carats in 2017, he said. At peak in 2012, Zimbabwe's diamond sector produced 12 million carats. Meanwhile ZCDC has dismissed reports that new diamond deposits have been discovered in Chiredzi.

Hundreds of illegal miners descended on Chiredzi following reports that some panners had picked diamonds in the area. "ZCDC being a mandated diamond mining company in Zimbabwe sent a team of Geologists to investigate whether they are real diamonds and to assess the potential of the geology of the area to host diamonds," said Dr Mpofu.

"The stones are not diamonds but quartz ranging from clear, milky quartz with iron stains to smoky quartz. The quartz averaged 10mm in size, the dolerite on the surface has a honeycomb structure with quartz growth inside. The geological formation of the area is not kimberlitic but amygdaloidal basalt or dolerite which do not host diamonds," he said.

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