Saturday, January 4, 2014

Zimbabwe diamond production dropping

Zimbabwe, one of the world’s top diamond-producing countries, may soon have to wave its gem extraction industry goodbye as miners operating at Marange and Chiadzwa fields claim it has become economically unviable for them to dig any deeper for the precious stones.

Diamond miners claim they have neither the expertise nor the resources to search for deposits underground. According to the state-run Herald newspaper, Mines Minister Walter Chidhakwa was told last week that alluvial diamonds—which are easily extractable through open cast mining—have run out and existing miners say they have neither the expertise nor the resources to search for new deposits underground.

Zimbabwe ranks today among the world’s top 10 diamond producers, with the government holding a 50% interest in most of the Marange mining operations.
Since their discovery in 2006, the country’s alluvial diamond deposits have been heavily extracted, providing generous revenues to miners and the government. But as the resource is depleting, revenue has begun to decline.

The director of Anjin Investments, one of the seven companies licensed to mine diamonds in Chiadzwa, told the paper his firm is operating below the break-even point.


The "Marange" is the name of a vast diamond field in eastern Zimbabwe. It is about the size of the German capital Berlin and in its depths huge deposits of diamonds lie waiting to be discovered. Many experts believe it to be the largest diamond field in the world. This year alone, the state-owned Zimbabwe Mining Development Corporation (ZMDC) expects to extract diamonds weighing some 17 million carats.

In terms of carats produced, the Marange field is the largest diamond producing project in the world.
Now Zimbabwe can again sell its precious stones to buyers in Europe. In September the European Union (EU) lifted sanctions imposed on the ZMDC for its alleged involvement in acts contrary to to democracy in the southern African nation.

The embargo on Zimbabwe's national mining corporation was imposed by the EU in the wake of brutal attacks by security forces against members of the opposition after the 2008 presidential election.
Five years later, the EU's foreign ministers have now said the embargo can be lifted – even though election observers from the African Union (AU) and the Southern African Development Community (SADC) expressed severe doubts about the credibility of parliamentary elections held in Zimbabwe in July this year.
The EU has also spoken of democratic deficits in Zimbabwe but the bloc's foreign policy spokesman Michael Mann says there have also been some small improvements.

The EU wants to encourage Zimbabwe to undertake economic reforms so that the population as a whole also benefits from the trade in diamonds. So far, ordinary Zimbabweans have seen little of the revenue. The country's economy is in a poor state and many people do not have enough to eat. The UN World Food Program estimates that 2.2 million Zimbabweans will rely on international food aid in the coming months.