Surat Rough Diamond Sourcing (India) Limited (SRDSIL) is looking to tap into Russia’s stockpile of rough diamonds as the company seeks out further long-term rough supply agreements, according to www.diamonds.net. Rcently, SRDSIL signed its first long term supply deal to secure $100 million worth of rough diamonds per month from Zimbabwe.
“We have a shortage of rough,” explained Ashit Mehta, chairman of SRDSIL. “So we are going to Russia in November, and after that Angola, to try and negotiate long term supply agreements for Surat.”
Russia’s state repository Gokhran has an estimated stockpile of about $1 billion after it bought all of ALROSA’s production during the first half of 2009 to help the mining company during the downturn. Mehta said SRDSIL would approach Gokhran to gain access to that rough. Similarly he expects to visit Angola before the end of the year to start negotiations there.
SRDSIL is being set up to source rough diamonds for distribution to local manufacturers through a tender system. The company expects to recruit around 1,500 members, or shareholders, and raise between $250 million and $400 million through membership fees. The funds will be used to buy rough diamonds and administer the company.
A delegation from the company visited Harare and signed an agreement with the Zimbabwe Diamond Consortium (ZDC), an empowerment group of indigenous entrepreneurs, in the presence of government representatives which included Mines Minister Obert Mpofu.
In return for the rough supply, SRDSIL will train 1,000 Zimbabwe youth in diamond design, cutting, and polishing, and will provide further technical expertise to help develop Zimbabwe’s fledgling beneficiation industry.
Supa Mandiwanzira, chairman of ZDC, explained that the agreement would encompass a negotiated sale with producers at a negotiated price. The consortium will source the rough from Zimbabwe’s three mines at Marange, River Ranch and Rio Tinto’s Murowa operation, but it is expected that the majority of the supply will come from Marange. ZDC will not participate in tenders to buy the rough, he stressed.
The deal is expected to take effect immediately after the Kimberley Process approves further sales of Marange goods, which includes a stockpile of approximately 6 million carats of diamonds. The KP will meet at its annual plenary in Jerusalem to discuss further steps required to bring Zimbabwe’s Marange mine into compliance with its minimum set of requirements.
