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Marange Kimberlites exploration negative

ZIMBABWE INDEPENDENT business writer Taurai Mangudhla (TM) interviewed Diamond Mining Corporation Managing Director Ramzi Malik on the sidelines of the recently held second Zimbabwe Diamond Conference.

Malik spoke about company’s progress on exploration for Kimberlites, expansion opportunities as well as proposed consolidation of diamond mines. Below are excerpts:

TM: There has been much focus on exploring for Kimberlites in Marange. As a company, how far have you gone in this regard?
RM: Right now we have done the exploration for the past six months and we are done with on-site exploration for Kimberlites.

TM: What were your findings so far?
RM: Unfortunately the results were not positive, we are now engaging external companies to do another. I want to call it exploration exercise, so that we compare results. Initial results are not very encouraging in terms of Kimberlite.

TM: What is the occurrence based on your findings?
RM: In our area, it’s very low so that’s why I am saying we are doing another exercise to come up with results because the initial one is negative. In the event there is, it’s going to be very costly so maybe it will not be viable for us to mine Kimberlite.

TM: How big is the area covered by your exploration?
RM: In our concession area, we have done almost all over. What we want to do or need to do is to be intensive because you can’t say I have just covered this area.

TM: What’s the size of your concession in terms of area?
RM: Its 12 000 hectares, but it doesn’t mean you cover every inch. You do it based on the geological report, that’s what you follow and also you look at where you have already mined, that is the channels and belts. I mean there is a lot of geology involved.

TM: There is talk that alluvial diamonds are fast running out and mines should be moving into conglomerates; what is your experience?
RM: Alluvial deposits are now at the point where, I don’t want to say it’s down, but it has its ups and downs. It appears there will be more challenges, but is it an infinite resource? I don’t think so, there will be a point where it’s mined out so what do you do?

TM: Speaking about the resources running out, what’s your plan if it gets to that point?
RM: We have applied for the new areas but government has put on hold these applications because it also wants to conduct its own due diligence on the companies and exploration to understand the resource availability. Based on that, they will decide how to proceed.
Right now, the focus for government points towards beneficiation. We are trying to create an industry that has a value chain from mining to the finished end product and not just mining and selling.

TM: When did you actually apply for this licence?
RM: We applied earlier this year, but also government is saying they might consolidate the mines so it maybe that we will be consolidated, or maybe they will just tell us thank you and that’s another aspect we need to bear in mind.

TM: What are you looking for in terms of the area you are applying for?
RM: We didn’t apply for a specific area; if any area is available we are interested in applying.

TM: If I may bring you back to the issue of consolidation, what does it mean to you as a company?
RM: Look, there are six or seven companies in Marange, different people, different companies, different agreements and different backgrounds so how are you going to put them together as one? The challenge is for government I believe, we don’t know what they will do.

TM: Can you just give an update in terms of your operations?
RM: Right now we are actually milling 170 000 tonnes per month and the recovery rates vary between 0,5 carats and 0,6 carats per tonne, which is approximately 60 000 to 80 000 carats per month.

TM: Is that sustainable in this kind of business or specifically for your company?
RM: Like any business, not just diamonds, it’s simple because you do a cost analysis. When costs are low you survive but when they become too high above your return you have problems and need to start looking at alternatives.
As it stands right now its okay, we are surviving. Like I said in any business it’s simply cost of production versus return. Your returns are more its fine, it may not be your target or dream, but at least you are not losing money.

TM: Some companies in Marange are struggling and have had to cut down on their staff costs to survive; how is your situation?
RM: No no, in our operation we are trying our best to maintain and not go and touch the human element of the business.

We would rather not retrench. At the end of the day we are supposed to create employment and pass on benefits. The moment we retrench, things are very bad. We are trying not to do that. Will we go towards that, this year? I don’t know but that would be our last resort. We value the human element.

TM: What is your staff complement at the moment? We have 7 000 Zimbabweans and we have maintained out staff at such levels unless somebody retires or facing disciplinary action.

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