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.
As controversy continues to rage over mining in Zimbabwe’s Marange alluvial diamond fields, Voice of America reports a deal has been reached to sell Marange diamonds.
According to the World Diamond Council, the agreement allows two Marange operations to sell diamonds on the international market and a third, run by a Chinese miner, will be allowed to resume sales following third-party verification.
The agreement, reached in Kinshasa, Congo, was ratified by members of the Kimberley Process, which is a system to prevent the sale of so-called “blood diamonds”.
The United States opposed the decision by abstaining from the vote.
MINING.com reported last week on a presentation made to the Zimbabwean parliament detailing 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.
There have also been reports of widespread human rights abuses as outlined in a BBC documentary showing security forces beating and raping prisoners at two camps in the Marange diamond fields.
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
