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When formal mining operations started at Chiadzwa diamond field in 2009 every Zimbabwean thought that revenue from the sale of the gems would transform the economy overnight.
The hopes were not misplaced as the deposit, described by one industry expert as “a fluke of nature,” held the world’s highest concentration of high-grade gems. Chiadzwa was the top diamond story then particularly as it was the cheapest place to extract diamonds on the globe since there were alluvial stones occurring near, sometimes on, the surface. Other mines in Botswana, Canada, Russia, Namibia, South Africa and Australia are old operations that had already gone kilometres deep, thus were more expensive to work.
At that time, Chiadzwa was furthermore touted to be on course to contributing at least 25 percent of global gem production.
However, the alluvial diamonds were soon depleted, necessitating the seven mining firms there to invest in technology and machinery to deepen their mines.
That is when challenges started. Companies that had hogged the limelight at mining indabas at home and abroad and that had become associated with extreme generosity had their incomes drying up immediately. They started failing to pay debts, started to retrench as operations were drastically scaled down. As that happened what was collective hope for the nation became its collective disappointment.
It has emerged that none of the seven companies — Mbada Diamonds, Marange Resources, Anjin, Kusena, Jinan, Gye Nyame and Diamond Mining Company or a few of them — actually invested anything there, even on the machinery they used for cheaper, open-cast mining. They don’t own the machinery and equipment but merely hired it. None of them has enough capital, after extracting billions worth of gems over the past six years, to finance the mining of deeper-lying kimberlites which preliminary exploration results show exist in abundance.
Given the situation the government started exchanging notes with more experienced diamond extraction jurisdictions, among them Botswana and South Africa.
One of the strategies the government was advised to implement was to consolidate mining activities at Marange to enhance state involvement in the production.
The government has made it clear that that is the route to take and the Zimbabwe Consolidated Mining Company would be set up, all the seven companies coming together.
We are with the government on this one. The nation cannot have an asset of such stupendous value and potential just lying idle like that because some selfish company executive wants to use it for practically speculative purposes.
We assert it is for speculative purposes because they have shown the nation that they lack the wherewithal to invest in the required machinery and technology given where the exploitable diamonds now occur. As it stands, Zimbabwe is not getting any value from the resource yet the economy is crying for money to fund its turnaround.
Diamond revenue can propel that economic transformation in a relatively short period of time. We therefore urge the government to proceed regardless of any resistance from anyone for the public good is greater than individual interest.
While there is a bit of resistance, we are pleased that events may have worked themselves out with the expiry of all mining licences for all the seven companies at Chiadzwa.
There was a possibility that some might have taken their resistance to a higher level by taking the route to the courts. However, with no valid licence to back up their claims, any resistance is unlikely to stand the rigour of the courts.
This clears the way towards the destination that the government and every Zimbabwean wants, a stage where the Chiadzwa diamonds realise their full potential.
Mines and Mining Development Minister Walter Chidhakwa has been commendably tough in whipping the defiant into line and has been instrumental in setting a year-end deadline for the merger to have been accomplished.
“What I can tell you is that all Marange diamond licences have expired,” he said on Thursday.
“It’s up to the minister to decide if he can renew them or not. . . . The drastic fall in diamond production calls for swift action as the companies have not invested beyond alluvial. Companies did not bring in the required capital for exploration as they concentrated on alluvial mining, that is why as government we are moving to consolidate the companies to save the future of the sector and we are not looking back. Our position is that the government has enunciated a policy, and that policy is that we will have one diamond mining company in this country.”
Online Reporter
Bongani Ndlovu