Alrosa signs a joint venture with ZCDC to develop diamond deposits

ZIMBABWE – The Government of Zimbabwe is on the verge of striking a US$450 million deal with a diamond mining company for the production of 850 000 carats of diamonds, through the Zimbabwe Consolidated Mining Company, as part of efforts to increase earnings to US$1 billion by 2023.

Mines and Mining Development Minister Winston Chitando said the agreement would complement the plan to recapitalise ZCDC (Zimbabwe Consolidated Diamond Company) in the next few months to increase production.

Minister Chitando said the US$1 billion target for diamonds was premised on the production of two million carats per annum.

“ZCDC will be recapitalised in the next few months to bolster its capacity to increase production and utilise their concession. There is a greater plan for the development of the consolidated 719 hectares, which falls under ZCDC.

ZCDC has been the only company operating in Chiadzwa following the consolidation of mining activities in the area by the Government, but a shift in policy has seen the company signing an agreement with Alrosa Overseas SA, for the exploration, extraction and marketing of diamonds.

He was speaking at a meeting for the Mines and Mining Development Parliamentary Portfolio Committee, which sought to review legislation and policies governing the mining industry.

“The company has come up with a five-year strategy for the extraction of diamonds in that consolidated area, but also using the arrangement with Alrosa and Anjin,” he added.

Chinese firm, Anjin Investments, was also re-licensed to extract gems in Chiadzwa.

“In addition, we are signing an agreement with one of the four players before September 15, where there will be US$450 million in the production of 850 000 carats. It should all add towards our target from diamonds.”

Responding to questions from Members of Parliament on why the Government was bringing in more companies into the Chiadzwa area and how it would benefit Manicaland province, Minister Chitando said the potential of diamonds in Manicaland went beyond the Chiadzwa consolidated area.

He said Alrosa had been roped in to focus on diamond mining in other areas in Manicaland and other provinces.

“Alrosa are concentrating outside the Chiadzwa consolidated area, they are working on areas on the outskirts of the Chiadzwa area, including Chimanimani. But over and above that, they are targeting 15 areas across the country,” said Minister Chitando.

“Following the signing of a joint venture agreement with ZCDC to develop diamond deposits in Zimbabwe in December 2019, we are progressing well towards the initiation of the full-scale prospecting works this year,” said Vladimir Marchenko, ALROSA Deputy CEO.

“Being a member of Responsible Jewellery Council, World Diamond Council and Natural Diamond Council, ALROSA complies in full with all industry commitments on responsible business practices and its own corporate standards.

“ALROSA is committed to follow these principles strictly while working in the Republic of Zimbabwe, minimizing adverse environmental impact in all areas of activities and using mineral resources comprehensively and rationally.”

ALROSA’s investments in Zimbabwe for 2020-2022 are expected to reach $12 million.

According to the shareholder agreement and a JV establishment agreement, ALROSA has 70% of ALROSA (Zimbabwe) Limited JV, while Zimbabwean state-owned diamond mining company’s share is 30%. The joint venture focuses on prospecting, exploration and, in case of success, mining of primary diamond deposits in the Republic of Zimbabwe.

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