Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Zimbabwe’s mines minister on Thursday told delegates at a conference in the capital Harare that the government has received 400 applications from companies interested in mining diamonds, despite an international ban on the export of gems from the rich Chiadzwa alluvial fields.
The news comes as Zimbabwe appears to scale back its ambition to force foreign miners to hand over majority ownership with the minister saying the country would not suspend any mining permits and that exceptions may be made to the so-called indigenization laws.
Reuters reports while investors in the country with world’s second-largest platinum reserves may welcome the comments, the abrupt change in tone will keep them guessing and reinforces the impression that the policy has been ad-hoc and based on brinkmanship.
Newsday reports the minister in charge of mining Obert Mpofu pushed for Zimbabwe’s participation in the Kimberley Processing Certification (KPC) despite being accused of not having complied with all the requirements: “People are using the KPC for their own agenda. It’s sad, instead of promoting world trade, some people are busy deterring us. We will not pull out of KPC. There cannot be a KPC without Zimbabwe.”
Mpofu also reiterated an allegation that De Beers smuggled out gems worth “hundreds of millions of dollars” from the controversial Chiadzwa and Marange fields. Diamonds were found by villagers in Chiadzwa in 2006, leading to a frenzied diamond rush that was eventually crushed by the army.
In the first six months of this year the country exported 716 958,50 carats of alluvial diamonds raising $103,9 million from mines that do not fall under the ban. Overall, mining projects worth $260 million were approved in the first half of 2011, more than three times the figure over the same period last year according to the Zimbabwe chamber of mines.
