Zimbabwe’s weekly Financial Gazette reported early last month that the quality and quantity of diamonds mined in Marange had been on the “decline” since 2012.
“Because there is now insignificant diamonds in the alluvial ore, the little that is found is of poor quality than before,” reads part of the report.
“While there is hope that economic grade diamond deposits exist underground, the companies operating in [Marange] need equipment to get to the gems, which is costly.”
Prior to the publication of this story, Rough & Polished had an interview with Anjin Investments deputy general manager Gertrude Takawira on the sidelines of the Zimbabwe Mining Indaba late September, where she also acknowledged the lessening of alluvial deposits.
However, she said other miners in Marange still had large deposits of alluvial that were less costly to mine unlike the conglomeratic placer found around their claim.
The Zimbabwean mines minister Walter Chidhakwa recently toured Marange diamond fields, which many in the southern African country see as a potential magic wand for the country’s economic woes, should operations become transparent.
Interestingly, the diamond mining companies told the visiting minister that alluvial deposits were fast running out on the claims that were allocated to them by government.
The miners said they were finding it difficult and expensive to extract deep conglomerate gems.
“Currently, we are exploiting low grade material compared to when we started. We have deep-seated conglomerate making it difficult to extract,” said Mbada Diamonds chief operations officer Tendai Kadyamusuma.
Anjin director Munyaradzi Machacha also said that the company was currently operating at below break-even point.
“Our ore is much deeper to depths of about 40 metres and some of the areas we have had to abandon mining because it was no longer commercially viable,” he said.
Perhaps a testament of how bad things have become, Anjin said it retrenched more than half of its workforce since it started operations in Marange, Zimbabwe, three years ago.
The diamond company said at least 950 workers out of about 1 800 people had been sent home, while about 190 of the remaining 845 workers still face the chop.
It was targeting to remain with at least 655 workers by March next year.
Machacha said the retrenchments were cost-cutting measures on the back of depletion of alluvial diamonds forcing them to dig deeper for conglomerates.
“We are taking these measures in order to remain viable. We have also put some of the machinery on idle mode. Of the seven processing plants that we have, we are only using four at the moment,” he said.
Another complaint came fr om Jinan chief mining operations officer, Liu Jitat, who said that conglomerate gems were too expensive to extract.
"We can see that the current mining area of the embedded depth of the conglomerate is already over 30 metres. But unfortunately, the conglomerate thickness is not very good. It is only 0,5 to 0,7 metres. The average grade is about 0,4 to 0,5 carats per tonne," he said.
The miners said they now wanted the government to allocate them untapped diamond fields, promising to revert to current claims when they get efficient technology.
However, Chidhakwa said Jinan should hand back the mining claim to the government and seek a new licence.
"But even alluvial itself, you can't keep getting the same grade. There are other spots where you find them in huge deposits and you should use that opportunity to capitalise and support the conglomerate," he said
Chidhakwa said miners can also balance alluvial and conglomerate operations and that they should have planned for this from the word go.
This development, the way I take it, does not mean that the whole diamond fields had been exhausted; rather alluvial deposits around claims awarded to the miners had run out, hence an appeal for new allocations.
Besides, no formal exploration had been done in the area to determine the actual diamond reserves.
The World Bank recently said production in Marange was expected to peak at 12 million carats over the next five years although it was estimated that an investment of $150 million could increase production to 15.2 million carats per year by 2018.
Some mining experts had previously noted that Zimbabwe was slated to produce 25 percent of the world’s diamond supply by value and 30 percent by volume by 2015.
With the reports of alluvial deposits running out, some people are now questioning the authenticity of these figures.
Others are also questioning the veracity of the claims made by the diamond miners on alluvial exhaustion given that these are coming shortly after the European Union (EU) had lifted sanctions on Marange diamonds.
The miners or the Zimbabwean government had previously refused to give constant production and trade figures citing sanctions.
Skeptics were not convinced that alluvial deposits had run out as this was a ploy to cover up the siphoning of diamond funds.
Diamond miners in Marange had been accused of failing to remit diamond revenue to the Treasury.
Zimbabwean Finance minister Patrick Chinamasa said early November that the Treasury had not received proceeds from diamond revenue in the nine months to September 2013.
The government had targeted to receive $40 million from diamond sales during the period under review.
Chinamasa’s predecessor, Tendai Biti was forced to cut Zimbabwe’s budget last year to $3.4 billion from $4 billion after receiving $41 million from $600 million that he expected from diamond sales.
Former Zimbabwean Prime Minister Morgan Tsvangirai said recently that the remittance of diamond revenues remained murky.
“The secrecy and lack of transparency in the diamond mining industry has resulted in serious leakages and failure to remit satisfactory revenues to the State,” he said during a lecture at Oxford University.
Global Witness also claimed that about $2 billion in Marange diamond revenues had been unaccounted for since 2008.
Zimbabwe dismissed the allegations as false.
That aside, the fact that DTZ-OZ GEO, a joint venture between the Development Trust of Zimbabwe and the Russian company Econedra, was happy to mine its recently found conglomerate deposits in Chimanimani, makes one wonder why there was so much hue and cry from Marange.
DTZ-OZ GEO said it was capable of producing 2,5 million carats of top quality diamonds per annum.
The company also acquired a state-of-the-art 70 tonne Dense Media separation machinery mid this year and was projecting processing capacity of up to 50 000 carats per month.
Why are miners in Marange failing to acquire equipment needed to mine the conglomerate?
Despite the sanctions that were in place, KP figures, show that the miners sold their diamonds annually, and wh ere that money went is baffling.
Surely, proceeds should have been used to invest in new technology necessary to mine conglomerates as they knew fully well that the alluvial deposit would not last forever.
The recent firing of the Zimbabwe Mining Development Corporation (ZMDC), Minerals Marketing Corporation of Zimbabwe (MMCZ) and Marange Resources boards by Chidhakwa was enough evidence that all was not well in Marange.
Indeed an injection of new blood and accountability was the only anecdote needed for Zimbabwe to realise maximum potential from its diamond fields.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
