Zim diamonds projected to dominate world market

Diamonds mined in Marange are projected to dominate the world market for the next five years amid reports that production from other countries is rapidly dwindling. This comes as Zimbabwe is expected

to earn about US$700 million from the sale of the precious stones this year, with a record 16,9 million carats set to be produced from Marange. According to a report released by the Companies Diamond Industry Series last month, the country will satisfy up to 30 percent of world diamond demand by 2015 as leading diamond groups such as Alrosa (Russia) and De Beers are likely to reduce production by venturing into underground mining.

Marange diamonds, which are being mined in an area covering over 120 000 hectares, are closer to the ground, as they are mined through the open cast system. The report was compiled by internationally reputable consultants to give insights into world diamond trade.

Reacting to the report, Resource Exploitation Watch chairman Mr Tafadzwa Musarara said the developments would force hostile nations to change their stance on Zimbabwe. He said this has happened in countries such as Angola where Westerners were initially working against authorities in that country.

"The prospect of Zimbabwe leading in the diamond industry will automatically force hostile countries to change their foreign policy on Zimbabwe," he said.

"This clearly shows that the sanctions that were imposed on Marange are not only hurting Zimbabwe, but also suffocating keen investors."

The report states that the Marange diamonds are a key discovery with a massive impact on the international market. It also lauds the companies operating at the fields for their large-scale production. Mbada Diamonds, Anjin, Marange Resources, and Diamond Mining Corporation are the companies mining in Marange.

"Diamond forecasters place confidence in their forecasts for declining world diamond production because it is relatively easy to monitor what is happening at kimberlite mines," reads the report. The majority of the world's important kimberlite mines are moving into full underground mining, a clear sign that diamond reserves have become greatly depleted.

"Moreover, underground mining increases the chances that producers will miss production targets as it is more expensive and more complex. Add to this, it can take anything from five to 20 years for a newly discovered kimberlite pipe that contains diamonds to go into production.

"Our view is that diamonds from Marange are a major discovery of diamonds in the global scheme of things. Companies operating in Marange are reportedly producing four carats per tonne, which really is quite impressive." The report warns Western countries working to discredit Marange diamond sales to seriously consider working with Zimbabwe, as the gems will increasingly become crucial to the world market. It also states that although only five companies are operating at the fields, there is vast scope for more firms to operate in the area.

"Those still holding out against Zimbabwe must be urged to accept trade in Marange diamonds. Conflict and human rights violations in Zimbabwe are tremendously exaggerated to comply with political positions.

"Diamond experts estimate that between 11 to 16 mines can profitably do business in Chiadzwa and each could produce about 10 million carats per year. Mining experts also added that over 200 diamond kimberlite pipes have been discovered countrywide. Production statistics from the Kimberley Process show that Zimbabwe officially produced 3,8 million carats of diamonds valued at $174,8 million between the years 2003 to 2009, and 8,5 million carats in 2010."

Another report by local financial institution AfrAsia Kingdom estimates Marange will produce 17 million carats this year alone. The report notes that although Zimbabwe's huge diamond deposits are an advantage, the country's Achilles' heel is that its gems are sold at some of the lowest prices on the market because of a combination of factors that include their roughness and sanctions imposed on the country.

"Marange diamond fields are expected to produce 16,9 million carats in 2013, which would make the project the largest in the world in terms of carats produced annually. Zimbabwe is the fourth largest diamond producing nation in the world, and the Marange fields represent almost all of the nation's production," reads the report.