Russia’s Alrosa, China’s Anjin to dig for diamonds in Zimbabwe

Ex-president Robert Mugabe’s administration was frequently accused by human rights groups and other critics of giving the army and security forces access to diamond wealth. (Image: Screenshot from CNN’s Marketplace Africa.)

The world’s top diamond producer by output, Alrosa (MCX:ALRS) and China’s Anjin have been chosen by Zimbabwe’s government to partner with the state-owned diamond miner in exploring and digging for precious stones in the country.

According to local paper The Herald, the move is part of the Zimbabwe National Diamond Policy, approved in December last year, aimed at reviving the country’s diamond industry.

Anjin used to mine diamonds in the southern African nation until late 2015 and Alrosa has already set up a local subsidiary.

Together with allowing two new private diamonds miners operate in the country, mines minister Winston Chitando said at the time that his office might also allow foreign investors to hold majority stakes in local operations on the condition that part of their output is reserved for domestic downstream industries.

Chitando didn’t name the two firms then, but the other two diamond-mining companies already operating in Zimbabwe are Murowa Diamonds, a unit of RioZim, and the state-owned Zimbabwe Consolidated Diamond Company (ZCDC).

The news comes on the heels of Russia’s Alrosa launching a local subsidiary in the southern African nation. The company, which says it is responsible for 27% of the global rough diamond production in terms of carats, already has operations in Angola and Botswana.

Marange’s revival

Most of the diamond fields are in Marange in eastern Zimbabwe, where production is dominated by ZCDC.

In 2008, hundreds were killed and thousands had to leave their homes as the military forced artisan miners to leave Marange after the early stages of the diamond rush.

In early 2016, former long-time leader Robert Mugabe went further, evicting all diamond mining firms from Marange, including Anjin. His government said at the time their licenses had expired after they declined to merge with ZCDC.

The move seeks to revive the country’s diamond industry

Since taking office a year ago, new President Emmerson Mnangagwa has moved to end the country’s international isolation and attract foreign investment to boost an economy in tatters. Part of the measures taken include allowing new private investment in the diamond fields.

Campaign group and accountability watchdog, Global Witness, said last month that Mnangagwa’s handling of the nation’s diamond industry would be the ultimate test for his alleged commitment to economic reform and anti-corruption.

According to the organization, good governance of the country’s diamond sector is a barometer of the direction that Zimbabwe is taking more broadly in the post-Mugabe era.

“It will attest to the credence of President Mnangagwa’s claims of a zero tolerance approach to corruption and transformed economic governance,” Sophia Pickles, Campaign Leader at Global Witness, said.

Zimbabwe expects to produce 12 million carats by 2023, compared with a forecast of 3.5 million carats this year.

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