Zimbabwe’s economic prospects for 2013 and beyond apparently hinge on the success of its diamond industry and the country should embark on extensive exploration activities to determine the size of its precious stone deposits, industry experts say.
Report by Taurai Mangundla
While key diamond industry players may push for increased diamond activity throughout the value chain in Zimbabwe with the profit motive in mind, this dovetails with President Robert Mugabe’s exhortation for increased exploration so that the ensuing data can enable the economy to stimulate investment into the sector.
Mining has emerged as Zimbabwe’s major economic driver after agricultural output fell as a result of the controversial fast track land reform programme of 2000. For this year, Finance minister Tendai Biti had anticipated to fund close to 20% of his fiscus from diamond revenues alone.
However, revenue collection from the Marange diamond operations was inexplicably low owing to lack of transparency on the disbursement of proceeds from the mines. Biti then had to revise downwards his budget from the initial US$4billion to US$3,4billion.
Mines minister Obert Mpofu told the inaugural Zimbabwe Diamond Conference last week that diamonds accounted for 45% of total revenue collected in the first nine months of this year.
Industry experts say Zimbabwe’s diamond production could double the current global output by 2015 and easily contribute 25% of the world’s supply by value and 30% by volume.
Chaim Even-Zohar, president of the Telaviv Tacy Limited, said Zimbabwe needed to know the major deposits of diamonds in the country for it to plan better.
“The problem with alluvial diamonds is that they can run out at any time so there is need for exploration to know where the carrot is,” said Even-Zohar.
“Diamonds were first found in Zimbabwe more than a century ago and right now they are being mined in Marange. They were also found a long time ago in Somabhula,” he added.
Zimbabwe Mining Development Corporation (ZMDC) chairman Godwills Masimirembwa said formation of new diamond mining companies to exploit newly-discovered diamond deposits was on the cards.
In an interview with Zimbabwe Independent, Masimerembwa said his company, which has a 50% stake in the four diamond companies at Marange – Anjin Investments, Diamond Mining Corporation, Marange Resources and Mbada Diamonds — has already done preliminary exploration which proved there were more deposits of the precious stone in the 1,8million hectare area.
“We have done preliminary exploration which shows there are diamonds in the area, so a full exploration is required to see the extent of the resource. It doesn’t mean, however, that every square metre has diamonds,” he said on the sidelines of the country’s inaugural Diamond Conference earlier this week.
Masimirembwa announced the country was seeking strategic partners to exploit the newly-found deposits. He said the 1,8 million hectares were under ZMDC control and highly prospective for diamonds
“We need partners with capital, technical expertise or those with access to markets”, Masimirembwa said.
Mineral exploration is used in the mining industry to probe the contents of known ore deposits and potential sites by withdrawing a small diametre core of rock from the orebody. Geologists can analyse the core by chemical assay and conduct petrologic, structural and mineralogic studies of the rock. In cognisance of the importance of exploration, government has so far spent US$4 million towards the revival of its mineral exploration company, Mining Promotion Corporation (MPC).
Resuscitation of the MPC owned by ZMDC is almost complete.
The US$4 million was used to purchase equipment, which will be used in the exploration activities as well as other expenses in running the company. MPC ceased operations due to harsh economic operating conditions that prevailed in the country.