Mining ZimbabweLatest Mining News, Policy and Industry Updates

The African diamond mining industry is poised for significant growth, with African producers aiming to consolidate their influence in the global market.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe, the Minister of Mines and Mining Development, the current African Diamond Producers Association (ADPA) Chairman, Hon. Winston Chitando, said Africa has vast potential to be a major player in the global diamond industry.

“Regarding the outlook for the diamond mining industry in Africa, we recognize Africa’s massive potential in this sector. This is why African producers aim to unite and be a significant voice in the global diamond market. However, the main challenge Africa faces is price setting,” Minister Chitando said.

He noted that countries like Botswana and Angola market their diamonds differently, making it difficult to form a unified African approach.

“Each country has its own marketing strategies tailored to its specific needs. For instance, Botswana and Angola have different structures for marketing their diamonds, which makes it difficult to establish a unified African marketing strategy due to the varying circumstances of each country,” Minister Chitando explained.

Despite these challenges, Minister Chitando remains optimistic about Africa’s future in the diamond sector, stressing that collaboration is key.

He emphasized that Africa, with its vast reserves, could become a global force, but only if countries work together to streamline operations and enhance their diamond beneficiation strategies.

According to Chitando, Zimbabwe, in particular, is committed to maximizing the value of its diamonds through local cutting and polishing initiatives, ensuring that more of the wealth generated from diamonds remains in the country.

Minister Chitando further noted that establishing Africa as a significant market for diamonds remains difficult due to the dominance of markets like the United States, which currently accounts for the largest portion of global diamond sales.

“As for whether Africa could become a market for diamonds, that’s challenging because the largest market currently is the United States. Establishing a significant diamond market in Africa would require a strong marketing strategy over a considerable period, coupled with substantial buying power from local consumers,” Chitando said.

There is a need for African countries not only to produce diamonds but also to create demand within their local economies. Zimbabwe, under the leadership of Hon. Chitando, has been making strides to ensure that diamond mining benefits the country holistically. Through policies that encourage beneficiation, such as local diamond cutting and polishing, Zimbabwe seeks to increase the value of its diamond exports and retain more revenue from the industry. These efforts align with the broader vision of African diamond-producing nations, which aim to ensure that the continent’s rich resources are used for the development and economic empowerment of its people.

Africa’s diamond industry continues to face obstacles, such as fragmented marketing strategies and the challenge of developing local markets. However, with leaders like Hon. Chitando spearheading initiatives to maximize value and encourage collaboration, the future looks promising for Africa to become a more influential player in the global diamond sector. As Zimbabwe dedicates itself to creating value through local beneficiation, other African nations may follow suit, increasing the continent’s share in global diamond profits.

Just over a year since resuming operations, Makomo Resources finds itself embroiled in a US$14 million legal dispute with Barak Fund SPC Limited, which claims Makomo owes this amount following its entry into corporate rescue in 2021.

By Ryan Chigoche

Makomo, once Zimbabwe’s largest coal miner, resumed operations last year after securing a contractor. It currently supplies coal to the Zimbabwe Power Company, positioning itself to regain prominence in the US$12 billion mining industry. However, if Barak Fund’s lawsuit is successful, it could significantly impact the company’s recovery efforts.

The lawsuit alleges that Grant Thornton, the corporate rescue practitioner, failed to conduct a forensic investigation mandated by the court, resulting in a US$13.5 million loss for Barak. Although US$2.8 million has been paid to other creditors, Barak’s claim remains “contingent,” preventing payment. Makomo’s legal team denies these accusations, asserting that the corporate rescue practitioners followed statutory requirements and that Barak’s request to remove Grant Thornton lacks legal merit.

Potential Impacts on Makomo Resources:

If the court rules in favour of Barak, the financial strain on Makomo could be severe, diverting funds away from operations, maintenance, and workforce management—crucial elements during the corporate rescue. The company’s ability to manage existing debts could be compromised, hindering recovery efforts.

The legal costs and financial liabilities may delay important projects and expansion plans, while the lawsuit itself poses reputational risks. Negative perceptions could harm relationships with stakeholders, customers, and potential investors, and might deter new investments critical for the company’s recovery.

Moreover, the legal scrutiny may force Makomo to adjust its operations, leading to increased costs. The focus on legal matters could detract senior management from pursuing long-term goals, and employee morale may suffer due to the ongoing uncertainty.

Additionally, any operational disruptions caused by the lawsuit could affect Makomo’s coal supply to key customers, jeopardizing relationships and impacting pricing strategies.

As the legal battle continues, the outcome will have significant implications for Makomo’s future and its corporate rescue efforts. Meanwhile, the company remains Zimbabwe’s largest privately-owned coal producer, with substantial supply to the country’s power stations and other sectors.

In 2013, Makomo became Zimbabwe’s leading thermal coal producer, surpassing Hwange Colliery Company. It operates on its 7,000-hectare Entuba coalfields in Hwange, with a life span of 30 years and resources for underground operations for over 100 years. Makomo is 60% owned by a group of six indigenous businesspeople, with the remaining shares held by foreign investors.

Investment promotion and protection company Taplane Business Solutions Centre is looking to partner with the Junior Chamber of Mines of Zimbabwe (JCMZ) to support small to medium miners in professionalizing their operations to world-class standards and securing funding, Mining Zimbabwe reports.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe, Taplane CEO Alain Diffo said his company has identified significant challenges related to the capitalization of most mines due to difficulties in finding the right partners.

He stated that Taplane is bringing the right investment partners and is looking to JCMZ to organize small to medium-scale mines to elevate them into large-scale operations.

“We are very interested in mining, which is why we are here at the Junior Chamber of Mines. There are significant challenges related to the capitalization of most mines, and we often struggle to find the right partners in countries that can demonstrate their resources backed by financial arrangements. We have access to those arrangements and are looking to the Junior Chamber of Mines to organize small to medium-sized mines, as we aim to elevate them to large-scale operations,” he said.

He added that miners intending to partner with Taplane should have business plans outlining the growth ambitions of their mines.

“For instance, if we find individuals in need of capital, we would require a business plan that outlines the mine’s lifespan. Based on that information, we can pursue foreign direct investment. We hope that Zimbabwe will embrace the opportunities with Taplane Business Centre, as we have established strong relationships with various international organizations that are often hesitant to invest in countries like Zimbabwe due to uncertainty. Our task now is to create a platform that brings Zimbabwean businesses together, showcasing their capacities and selecting a few that can receive sponsorship,” he said.

The government, through its “open for business” mantra, has been encouraging international investors to invest in the country’s mining sector as part of its efforts to contribute significantly to achieving an upper-middle-income economy by 2030.

Zimbabwe’s mining sector has witnessed a surge in investment over the past three years, with several companies investing heavily in exploration, expansion, and plant construction.

A survey by the Chamber of Mines of Zimbabwe (CoMZ), based on insights from mining executives, showed that substantial investments have been made in lithium, gold, Platinum Group Metals (PGMs), and ferrochrome companies.

The mining sector is a major contributor to the economy, accounting for 13 per cent of the gross domestic product and employing over 50,000 people. The sector also generates more than 70 per cent of the country’s exports.