Russia’s Alrosa kicks off diamond exploration in Zimbabwe
Russia’s Alrosa (MCX:ALRS), the world’s top diamond producer by output, has begun prospecting and preliminary exploration works for deposits in Zimbabwe through it’sjoint venture with the Zimbabwe Consolidated Diamond Company (ZCDC).
The move is a welcome boost to the southern African nation’s attempts to expand diamond mining revenues. Zimbabwe first began allowing foreign companies to dig up precious stones in 2018, opening the door to private investors.
Mines minister Winston Chitando said at the time that his office was considering letting foreigners hold majority stakes in local operations on the condition that part of their output is reserved for domestic downstream industries.
THE MOVE IS A WELCOME BOOST TO THE SOUTHERN AFRICAN NATION’S ATTEMPTS TO EXPAND DIAMOND MINING REVENUES
Alrosa opened an office in Zimbabwe’s capital Harare in 2018. First employees arrived early last year and the joint venture with ZCDC was formalized in December.
“Following the signing of a joint venture agreement with Zimbabwe Consolidated Diamond Company to develop diamond deposits, we are progressing well towards the initiation of the full-scale prospecting works this year,” Alrosa’s deputy chief executive, Vladimir Marchenko, said in the statement.
Most of Zimbabwe’s diamond fields are in Marange, in the eastern part of the country, where production is dominated by ZCDC.
In 2008, hundreds of artisanal miners were killed and thousands had to leave their homes as the military, under the former government of dictator Robert Mugabe, forced them to leave Marange.
International advocacy groups accused Mugabe of looting about $2 billion from the diamond-rich fields. The European Union lifted sanctions that curbed diamond exports from Zimbabwe at the end of 2013.
In early 2016, however, Mugabe evicted all diamond miners after they declined to merge with ZCDC.
Sector boost
President Emmerson Mnangagwa, who took office in 2018, has moved to end the country’s international isolation and attract foreign investment to boost an economy in tatters.
Campaign group and accountability watchdog Global Witness has said that Mnangagwa’s handling of the nation’s diamond industry would be the ultimate test for his commitment to economic reform and anti-corruption.
According to the organization, good governance of the country’s diamond sector is a barometer of the direction that Zimbabwe is taking more broadly in the post-Mugabe era.
“It will attest to the credence of President Mnangagwa’s claims of a zero tolerance approach to corruption and transformed economic governance,” Sophia Pickles, Campaign Leader at Global Witness, said.
Alrosa has committed to invest $12 million in Zimbabwe from 2020 to 2022. Most of the diamond fields are in Marange in eastern Zimbabwe, where production is dominated by ZCDC.
Press Release (July 21, 2020)
ALROSA (Zimbabwe) Limited (ALROSA Zim), a joint venture between ALROSA and Zimbabwe Consolidated Diamond Company (ZCDC), starts prospecting and preliminary exploration works for primary diamond deposits.
After getting Special Grants from the Ministry of Mines and Mining Development, ALROSA Zim has the Environmental Impact Assessment (EIA) approved by the Environmental Management Agency (EMA) and is set to commence prospecting and exploration in Masvingo, Matebeleland South and Matebeleland North provinces of the Republic of Zimbabwe.
In July 2020, ALROSA Zim’s geologists to start geochemical sampling, trenching and pitting in Malipati zone, with ground geophysical surveys to follow. Towards the end of year, the same prospecting operations, including airborne geophysical surveys to be conducted in the Maitengwe area.
Bulk sampling and drilling to commence in 2021.
“Following the signing of a joint venture agreement with ZCDC to develop diamond deposits in Zimbabwe in December 2019, we are progressing well towards the initiation of the full-scale prospecting works this year. Being a member of Responsible Jewellery Council, World Diamond Council and Natural Diamond Council, ALROSA complies in full with all industry commitments on responsible business practices and its own corporate standards. ALROSA is committed to follow these principles strictly while working in the Republic of Zimbabwe, minimizing adverse environmental impact in all areas of activities and using mineral resources comprehensively and rationally”, said Vladimir Marchenko, ALROSA Deputy CEO.
ALROSA’s investments in Zimbabwe for 2020-2022 are expected to reach $12 million.
According to the shareholder agreement and a JV establishment agreement, ALROSA has 70% of ALROSA (Zimbabwe) Limited JV, while Zimbabwean state-owned diamond mining company’s share is 30%. The joint venture focuses on prospecting, exploration and, in case of success, mining of primary diamond deposits in the Republic of Zimbabwe.
