Diamond firms working on dumps

11 May, 2015 - 00:05 0 Views
Diamond firms  working on dumps

The Herald

Diamond mining companies in Chiadzwa have started working on dumps to extract ore as production has significantly declined in the past years, an official has said.Zimbabwe is presently ranked among the top 10 diamond-producing countries in the world and extracts alluvial diamonds from the vast Marange fields. However, these have been fast depleting prompting the need to explore for the deep-seated Kimberlitic deposits which most of the companies have said is too costly for them.

Diamond exports declined by 3 million carats over the previous year. This is the second consecutive year that diamond production has fallen.

The annual exports dropped to 5,9 million carats last year from 8,9 million carats a year earlier, figures from the Minerals Marketing Corporation Zimbabwe show. Last year’s diamond decline was largely due to a significant decrease in alluvial production. Export receipts also declined to $350 million from about $466 million in 2013.

Addressing the parliamentary portfolio committee on Youth, Indigenisation and Economic Empowerment, the director of the Zimbabwe Geological Survey in the Ministry of Mines, Mr Temba Hawadi said the diamond mining companies are facing serious financial and production challenges and they would not be able to raise $10 million each towards the Zimunya Marange Community Share Ownership Trust.

“With the current level of operations, which is far less than when the scheme was launched, there is no way in which the companies can raise $10 million each. In fact since the time of the launch, production has been going down and most of the companies are actually reworking the dumps which they had,” he said.

The Marange Zimunya community scheme was launched by President Mugabe in 2012 and the five companies operating in the area pledged a collective $50 million towards the trust. The diamond mining firms in Marange included Anjin Investment, Mbada Diamonds, Marange Resources, Diamond Mining Company and Jinan.

But over the past year, the companies have denied knowledge of the Trust as well as the fact that they pledged $10 million each (which they cannot afford) towards it. Mr Hawadi said the ministry was recommending that Government and the diamond producers renegotiate the amounts the companies should pay towards the CSOT.

“We (ministry of mines) recommend that the Marange Zimunya community pledges be renegotiated and that they be payable over a certain period of time given the current production and financial challenges that the diamond mines are facing. The pledges were made on the assumption that production would go up. But these companies have to honour at least the initial $200 000 they were asked to pay,” he said.

CSOTs are an integral part of the country’s Indigenisation Programme which requires foreign companies to cede 51 percent of their stake to indigenous Zimbabweans.

Under the arrangement companies can, as part of their indigenisation compliance, deposit shares into the trusts in part compliance with the requirement.

Mr Hawadi said the diamond mining companies were served with letters reminding them of their pledge to the Trust but only Marange Resources and Mbada Diamonds have contributed $250 000 and $200 000 respectively towards the Trust so far. — BH24

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