HARARE - President Robert Mugabe is courting Russian investors with a
view to secure a US$5 billion loan to bankroll a joint venture diamond
mining project, according to the London-based think-tank Africa
Confidential.After failing to secure meaningful support from his friends in Asia,
Mugabe and Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono have
been working hard to bring in Russian capital, especially in the opaque
diamond sector.
Russian surveyors have already visited deposits in Midlands province
and President Mugabe was hoping for a cash injection of up to US$5
billion from the Russian government and state mining company Alrosa,
which had held discussions with Gono, the think-tank said.
Gono is said to be in constant touch with Alrosa officials who he met during a visit to Moscow last year.
Alrosa representatives were in Zimbabwe last month, according to Africa Confidential.
The think-tank said the Russians were jittery about working with Mugabe.
It is not that their human-rights record is great, but the time and investment to make the field profitable are significant and would involve considerable financial risk in light of the political
instability there, said Africa Confidential.
Mugabe is said to be keen to rope in the Russians for the 170-acre Chiadzwa diamond mining project in Manicaland province which the Zimbabwean government is trying to regularise after two years of free for all mining.
Zimbabwe security forces have forcibly evicted thousands of illegal diamond miners and cordoned off diamond fields in Marange, about 100 kilometres south-west of the eastern city of Mutare.
The state-run Zimbabwe Mining Development Corporation (ZMDC) has since the beginning of 2009 taken over mining operations at the Chiadzwa diamond fields in Marange.
Zimbabwe state media reports last week said the ZMDC was realising between 50 000 and 60 000 carats of diamonds a week.
Mines Minister Obert Mpofu put the potential daily diamond output at Chiadzwa at more than US$600 000 if the ZMDC was adequately capitalised.
At least 10 000 people were camped at Chiadzwa at the height of the diamond rush in 2008, with half of them illegally mining and trading in diamonds while the rest were engaged in selling food and drinks to the illegal miners.
The illegal miners smuggled the diamonds to South Africa and Europe where the mineral has a ready market.
Under Zimbabwe's mining laws, minerals such as diamonds are supposed to be sold solely to the state-run Minerals Marketing Corporation of Zimbabwe.
Although the official plan since 2006 was for the government to mine at Marange, in practice mining was carried out for the benefit of senior government and Zanu (PF) officials and those close to them, with little income returned to the government.
Most of the officials had their own diggers and traders.
By late 2008, mining was being carried out by soldiers, using local villagers as forced labour.
The soldiers occasionally paid the villagers with diamonds and surrendered much of the produce to their senior officers.
The diamond rush in Marange started in the second half of 2006 following the expiry of an exploration contract held by British company, Africa Consolidated Resources (ACR) in May 2006.
Through its exploration, ACR had discovered deposits of industrial diamonds in Chiadzwa but no official estimates exist on the size of the deposits.
The ACR exploration licence was not renewed following its expiry, leading to a stampede by locals and government official seeking to make a quick buck from the ensuing chaos on the British company's claim.
Gono has estimated that the Chiadzwa diamond field on the border with Mozambique should provide Zimbabwe with over US$1 billion per month in revenue although that figure was disputed by independent experts.
Meanwhile the World Federation of Diamond Bourses last Friday banned
its 28-member countries from trading in diamonds originating from
Zimbabwe citing several irregularities.
The Federation said comprehensive data, descriptions and photographs of
these rough diamonds mined at the Marange deposits have been widely
circulated by the Kimberley Process working group of diamond experts,
thus making identification of these illicit diamonds easier.
President of the World Federation of Diamond Bourses, Avi Paz said the
decision to ban the Zimbabwe diamonds follows reports and violations of
the Kimberley Process Certification Scheme (KPCS).
"The WFDB and its membership worldwide are committed to do all it can
to prevent conflict diamonds from Zimbabwe or from any other source for
that matter to be traded by our members," Paz stated Friday.
Paz said: "As founding members of the World Diamond Council and as
signatories to the Kimberley Process Certification Scheme (KPCS), it is
our duty to remind not only our own members but all those who operate
in the diamond industry and trade of the devastating impact of
conflicts fuelled by the trade in conflict diamonds on the peace,
safety and security of people in affected countries, and the systematic
and gross human rights violations that have been perpetrated in such
conflicts.
Paz said the WFDB and its member bourses have a cast-iron rule that
rough diamonds can only be traded when they are accompanied by KP
certificates.
Reports have previously indicated that several diamond diggers and
buyers have been killed during the trade of the precious commodity
leading to some arrests.