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.
A presentation made to the Zimbabwean parliament on Thursday details the secrecy, corruption and human rights abuses that accompany mining activities in the Marange alluvial diamond fields.
Hundreds were killed and thousands of local miners were driven off claims when the army seized control of the area in 2008 and most observers believe an international ban on these gems are being widely flouted. The report alleges that in contrast to the official $200 million, as much as $2.8 billion – equal to all other tax revenues – found its way into a parallel government via the army, police, prisons and intelligence agencies which all have ‘permits’ to mine there.
MINING.com reported back in July as Zimbabwe’s shaky unity government inches ahead with extensive electoral reforms ahead of fresh elections now expected next year, the prospect of the country’s army seizing power looms large. The military’s top brass has taken on a visible role in the country’s political affairs and has been brazenly opposed to security sector reforms.
Zimbabwe’s finance minister Tendai Biti in July said the reality of Zimbabwe’s situation is that there is no connection between Zimbabwe’s income from diamonds, its output and international prices adding the country’s resources are in danger of turning into curse rather than a blessing. Zimbabwe exported 716 958,50 carats from its alluvial diamond mines but only $103,9 million of diamond export shipments was accounted for in the first half of the year
MINING.com reported earlier this month on a Pyrrhic victory for Robert Mugabe when Rio Tinto’s Zimbabwe subsidiary Murowa Diamonds ceded 51% of its equity to comply with a new law that requires Zimbabweans to own the majority of foreign companies. Rio Tinto says on its website it has completed a feasibility study and received environmental go-ahead to expand Murowa production 8-fold at a cost of $200 million, but it is doubtful on whether the investment, which requires foreign capital, would now be made.
3 Comments
Highflying2026
The funny thing about all of this it the current mining operations are managed well, their is no abuse and this could actually be a responsible industry. Granted, there was a lot of “stuff” going on and yes people died but this is now history. It was exaxtly the same in Angola, Sierra Leone and the DRC, so yes its was bad but time to move on.
The grades reported in the above articles are completely wrong and to high in most cases by a factor of 4 to 6 times! further, the run of mine production includes substantial amounts of bort, so the fact of the matter is the prices received for ROM are in fact low. The reason for this is the deposit is in fact not alluvial…..and in fact from a geological perspective quite unique, and should in time we lectured on in most Geological classes around the world.
Yes, the Zim political situation layered over the fantastic resource is most unfortunate, so it will not matter how well the mining is run, and how responsible the miners are – it will always be a political food ball.
Chat Later.
PS
Mrkhrdr
Follow the money. Always follow the money.
Zim mike @zim mike
The diamonds in zimbabwe belong to zimbabwe 3 or more major countries were extremely unhappy with the find as they were the masters in bringing zimbabwe to its knees.Why should rio tinto now want to break their sanctions on zim. pse be reminded rio tinto extracted millions of gold tons at effell flats in kadoma and what did the owners of the resources recieve no school no hospital no college no roads low level work. All they got was a football team 6th world rimuka football stadium, rimuka township with 10th world housing and a beerhall. The enviromental damage done during rio,s time is clearly still very visible. All countries in the world demand indiginous percentage control of thier resources why not zimbabwe. And as far as i have seen the lives of zimbabweans is slowly improving and will continue to do so. Those that called for sanctions should continue why change their tune now pse leave zimbabwe and thier diamonds alone