Diamonds discovered in Chimanimani, Zimbabwe

THE discovery of diamonds in Chimanimani is set to become yet another source of friction between partners to the Government of National Unity, Standardbusiness can reveal.

Zanu-PF has courted criticism from MDC formations over the way it is monopolising the mining and marketing of diamonds from Chiadzwa.

Experts say the Chimanimani diamonds deposit occur in the same geological structure as those of the Marange diamond fields and therefore, have the potential to be as good in terms of grade or quality but the bone of contention is centred on their ownership.

Between 2009 and 2010, Botswana Diamonds prospected the Chimanimani area trading as African Diamonds, before entering into a joint venture with a local company and beginning construction of a trial mine. Their licence was however withdrawn last year under unclear circumstances.

A joint venture named DTZ-OZGEO (Pvt) Ltd, between a Russian company OZGEO and a Zimbabwean company, Development Trust of Zimbabwe, is expected to go into full diamond mining in the area by year end, as it has a special grant to explore and mine diamonds.

The Russian government, which has already expressed interest in Zimbabwe's mining and energy sectors, is finalising a Bilateral Investment Promotion and Protection Agreement with the Zimbabwean government.

Last month, a business delegation from Russia met with Vice-President Joice Mujuru and expressed profound interest in investing in the country's mining and energy sectors while another delegation is expected next month.
 
Since the beginning of trial mining in 2010, the venture says it has mined over 7 000 carats. Between 2007 and 2010, DTZ-OZGEO (Pvt) Ltd, carried out a substantial amount of work in construction and technical fit-out of the Chimanimani site in terms of preparation, prospecting and diamonds mining. It could not be established how much of diamonds had been mined during that period.

President Robert Mugabe last week said the new diamond claims discovered in Chimanimani had to be reserved entirely for indigenous companies for purposes of implementing the indigenisation programme.
 
However, MDC-T deputy secretary for mines who is an expert in the diamond sorting industry, Pearson Mungofa, last week warned Zanu PF was about to monopolise the diamond fields.
 
He said the lack of government representation at the mine was a cause for concern, adding that the lack of transparency and political will by the mines ministry to create employment opportunities would deprive the nation of the much needed revenue.
 
"The problem with the Chimanimani (diamond) find is that government is not taking the rightful position to safeguard the discoveries for the benefit of the nation. In effect, they are not applying proper procedure to secure the discoveries and fully account for them," he said.
 
"There is need to change the mode of control if anything is to be realised from these discoveries," he said, adding that diamonds, being among   the most precious minerals on earth, have the ability to remit substantial revenue to Treasury in a short period of time.
 
Mungofa pointed out that the new found diamond-rich tracts were most likely going to be parcelled out to "favourites", saying current operations at the mine were not sustainable.
 
He noted that since the joint venture was operating independently of government control, it was possible they could declare any diamond figures which they deemed fit.
 
According to figures brought before the parliament recently by the Mines and Mining Development ministry, the country sold three million carats of diamonds in the first three months of 2012, with Treasury only receiving US$30 million.
 
In his Mid-Term Fiscal policy presentation last month, Finance minister, Tendai Biti said he was forced to cut the 2012 budget from US$4 billion to US$3,4 billion owing to poor revenue inflows from diamonds from Marange.
 
Biti said of the US$600 million which was expected from diamond sales this year, only US$41,6 million had been received during the first half of the year.

Mines and Mining Development minister, Obert Mpofu, however dismissed Mungofa's concerns, saying they were "usual excuses being used by people seeking relevance".
 
"Presently, there is an on-going initiative by government to establish the extent of deposits in the area. When this is established,  the focus will then be on encouraging indigenous players to enter for purposes of exploration and investment," said Mpofu.
 
He said the DTZ-OZGEO (Pvt) Ltd joint venture had been present in the fields for a long time, with government's knowledge and the company was also involved in gold exploration activities.