World’s largest diamond firm announces Zimbabwe investment

Zimbabwe Alrosa
Alrosa CEO Sergey Ivanov

Alrosa, the world’s largest diamond producer by output, is investing in a new operation in Zimbabwe, the company’s CEO has announced.

Alrosa has registered a subsidiary in Zimbabwe and will launch exploration and extraction operations in the country, the company said Monday during a visit by President Emmerson Mnangagwa to Moscow.

“Within the next month Alrosa’s experts, including geologists and mining engineers will arrive in the country to start the operations,” the company said.

The deal comes after talks in Harare last April between Mnangagwa and Sergey Ivanov, Alrosa’s CEO.

Alrosa first showed interest in Zimbabwe in 2014, but the company dropped its interest in investing two years later and let go of its exploration licences in the country.

“Today we see opportunities for a new stage of our partnership. We are ready to develop new joint projects for diamond exploration and extraction. We also seek to support Zimbabwe in the development of its diamond-mining industry in line with industry’s best practices. We are happy to share with our partners a wealth of experience in the field of mineral exploration and diamond mining, including the industry self-regulation and responsible business “, said Ivanov at a press conference.

Zimbabwe is desperate for investment in diamond production, which has collapsed over recent years after alluvials in the controversial Marange fields ran out and Government evicted all private miners from the area, most of them Chinese.

Zimbabwe’s diamond output is down almost 75% over the past five years.

Zimbabwe diamond production since 2010 – Bloomberg

According to Rappaport, which tracks the diamond industry, Alrosa’s diamond sales reached $4.5 billion in 2018, after selling 36.6 million carats, making it the world’s leading producer. The company itself says it accounts for 27% of global rough diamond production in terms of carats.

Up to now, Alrosa has not ventured far from Russia with its investments. The company’s only other operation in the region is a stake in Angola’s Catoca, the world’s fourth largest diamond mine. 

Alrosa’s entry is the first since Zimbabwe announced a new diamond policy late in 2018. Under the policy, the Government ended its monopoly of diamond mining by saying it would allow two private companies, in addition to RioZim’s Murowa Diamonds, to mine for diamonds.

In November, Alrosa exited an exploration joint venture in Botswana with Botswana Diamonds. Interestingly, this was just a month after Botswana Diamonds partnered with UK-listed firm Vast Resources to develop a diamond concession in Marange.

Vast Resources last August concluded an agreement with
Red Mercury, a company owned by the Marange-Zimunya Community Share Ownership Trust, giving it access to
a 15 km² area in Marange.

In December, Vast said it had not yet received any official word on whether it would be included under the new diamond policy, despite press reports quoting Mines Minister Winston Chitando saying Vast would be allowed to mine.

In March last year, during a visit to Harare by
Russian Foreign Minister Sergei Lavrov, Zimbabwe and Russia revived stalled plans for a joint venture on a platinum mine at Darwendale.