eBusiness Weekly
Ishemunyoro Chingwere Business Writer
Government has sealed an investment deal with the world’s biggest diamond producer by volume, Alrosa (Russian), and the two parties have set July 17 as the date they will make public modalities of the investment, the Business Weekly can exclusively report.
Alrosa will join three other diamond investors, Anjin, ZCDC and Murowa, as the four entities that will exploit Zimbabwean diamonds, meaning any other prospective investors will have to partner either of the four approved miners.
Zimbabwe is gearing its diamond sector for a major boom that will be key towards the attainment of US$12 billion export earnings annually by 2023 up from US$3,2 billion achieved in 2018.
Mines and Mining Development Minister Winston Chitando, was not available for comment by the time of going to print, but a senior Government official who spoke of condition of anonymity told this publication that the Alrosa deal is as good as done.
“It’s a done deal, Alrosa are coming and we are signing the deal on July 17,” said the source in strict confidence.
“You are aware that Government has said they will only give concessions to four miners that is ZCDC, Murowa who already are mining in the Midlands province, Anjin and now the fourth is Alrosa.
“Anybody else who wants to come in can then talk to either of the four like Vast Resources is doing with ZCDC,” he said.
Earlier in March this year, Alrosa confirmed that they were in talks with the Zimbabwe Government for a possible deal to mine diamonds.
The miner, however, made it clear that they will only come in if they have a controlling stake in whatever operations they will be involved in.
“Of course we’ll only be ready to participate in projects in cases where we can have management control and operational control of the assets,” Alrosa CEO Sergey Ivanov was quoted as saying by Reuters in March this year.
On the other hand, AIM listed mining and resource development concern, Vast Resources, have said they are expecting a turnover of US$53 million per annum in their envisaged diamond mining operations in the country.
The British head-quartered concern is among global mining players that have responded to Zimbabwe’s investment lure in the new dispensation and is in the process of finalising joint venture agreement with the Zimbabwe Consolidated Diamond Company. The joint venture will culminate in the two partnering in exploiting the Chiadzwa diamond fields.
Presenting a paper at this year’s Arab and African Mining Conference in London last week, Vast Resources chief executive officer, Andrew Prelea, played up the Zimbabwe investment and said the company was looking forward to it.
Vast Resources, Prelea said, was looking forward to a turnover of US$53 million per annum after an initial six months of operation that will see the firm sinking in US$29 million per year in expenditure.
That expenditure will, however, be preceded by an initial capital expenditure of US$5 million.
He also noted that geological assessment of the diamond rich concession had quoted grades for the area as anything between 100 and 200 carats per 100 tonnes of mined ore with a conservative price averaging US$80 per carat.
Crucially, he also notes the availability of the easy to mine alluvial deposits which had of late been feared to be fast depleting having been the subject of exploitation since the first diamond rush in Chiadzwa.
“Projections indicate revenue after six months of US$13,25 million per quarter on expenditure of US$7,25 million per quarter after initial operating requirement including capex (capital expenditure) of US$5 million,” Mr Prelea told delegates to the Arab and African Mining Conference.
“Unmined concession which by virtue of its geographical positioning is anticipated to contain economically viable diamondiferous alluvials as well as conglomerate ore resources on which Vast expects to receive a license to start mining.
“The Vast Diamond Division have prepared a business case on the Heritage Concession and drawn up a list of projections based on their knowledge and experience along with an Independent geological assessment obtained September 2018 giving indicative grades,” he said.
