Zim to get more from diamonds

TIRED of pocketing crumbs from the sale of raw diamonds that naturally fetch less on the global market, Government has launched an audacious bid to join the big league by wading into the value addition and beneficiation sector.

The thrust of adding value and beneficiating diamonds is captured in the diamond policy that was approved by Cabinet a fortnight ago.

In the period 2009 to 2016, rough diamonds were sold at between US$40 and US$80 per carat.

Sources say the bulk of the diamonds were sold at about US$53 per carat, depriving the country of meaningful economic value and sparked concerns that gems were looted by a small clique of bigwigs.

Last week, President Emmerson Mnangagwa indicated that it was time the country moved into the mega-bucks value-addition sector.

“This new (diamond) policy protects the national interest, while meeting the expectations of the Kimberley Process Certification Scheme,” said President Mnangagwa.

“The equity structure which the policy prescribes firmly secures our national interest. So, too, does its interest in and coverage of all stages of the diamond value chain, which are exploration, mining, processing, sorting and valuation, beneficiation and value addition, marketing, capacity building, security and compliance.

“. . . this means Zimbabwe must move and stay as close as possible to where real value is. This is the import of our diamond policy, which incorporates a valuation centre, a school of gem training, and a whole special economic zone for jewellery manufacturing and retailing.”

Statistics show that global rough diamond sales generate between US$15 billion and US$18 billion.

Rough diamond sales is the first stage of the diamond value chain, while cutting and polishing diamonds is the second stage, which fetches anything between US$20 billion and $24 billion.

On the upper rung of the diamond value chain ladder is the jewellery retail market, which attracts revenues of between US$70 billion and US$72 billion.

President Mnangagwa said it was imperative that the country taps into the billions of dollars that accrue from value addition.

“Clearly, the greatest value does not reside with the miner at Chiadzwa. Rather, it resides with the diamond trader somewhere in Antwerp, Surat, Tel Aviv or New York who dresses the customer’s finger,” he said.

This year, the Zimbabwe Consolidated Diamond Company (ZCDC) has a stretch target of 3 million carats.

Between January and October, ZCDC had hauled 2,4 million carats, which is considerably above the 1,8 million carats mined all of last year.

Considering that diamond occurrences have been noted in most parts of the country, including Midlands and Matabeleland South, analysts say it is imperative that value addition is expedited to ensure more revenue is generated.

Value addition cuts across all minerals.

The 2019 National Budget underscores the need for value addition and beneficiation.

Finance Economic Development Minister Professor Mthuli Ncube said Zimbabwe’s thrust is to add “value and beneficiate more through processing and refining of minerals and link processed and refined minerals to the manufacturing sector in order to industrialise”.

Government is finalising the Mineral Value Addition and Beneficiation Policy designed to improve domestic smelting and refining, to take advantage of the immediate scope for income and exports generation offered by minerals such as platinum, chrome, lithium, nickel, diamond, copper, gold and coal.

As value addition gathers pace, the platinum sector has already complied with Government aspirations, with President Mnangagwa set to commission Anglo-Platinum’s smelter at Unki Mine in Shurugwi this week.

“I am set to officially launch this much-awaited investment next week, thus enabling our mining industry to move one more step further up the platinum value chain,” said President Mnangagwa.

In 2014, Government directed the country’s three platinum mining firms — Zimplats, Unki and Mimosa — to construct a precious metal refinery to ensure local beneficiation to stem possible leakages of minerals amid fears the miners were not declaring all proceeds from other minerals associated with platinum such as gold.

The deadline to construct a platinum refinery was January this year.

Towards end of last month, Johannesburg Stock Exchange-listed Anglo American Platinum (Amplats) announced the completion of a US$62 million platinum group metal (PGM) smelter at Unki.

The smelter is expected to generate matte, a product that would be sent to Amplats’ South Africa’s base metals and precious metals refineries.

As at Wednesday last week, the price of platinum per ounce was US$834,90 while palladium, which is part of the PGMs, was fetching US$1 225,90 per ounce on the international market.

The palladium price was marginally lower than gold, which was selling at US$1 246,30.

With more platinum projects in the pipeline such as the US$3 billion Great Dyke Investments (GDI) — a joint venture between Zimbabwe and Russia — expected to be consummated when President Mnangagwa travels to Russia mid-January next year at the invitation of President Vladimir Putin, the Unki smelter will come in handy.

The US$4,2 billion Karo Resources platinum project is also taking shape.

Value addition of lithium is also set to start with President Mnangagwa earmarked to officially open the lithium carbonate plant situated in Kwekwe.

The lithium carbonate plant was installed by Australian-listed mining concern, Prospect Resources, which is set to create battery grade (+99,5 percent) lithium carbonate.

Prospect owns the US$52,2 million Arcadia Lithium Project in Goromonzi.

source: The Sunday Mail

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