Vast Resources to sign diamond joint venture agreement with ZCDC

Vast Resources
Vast Resources

Almot Maqolo

HARARE –  As part of Zimbabwe’s concerted efforts to grow its diamond industry from 3.4 million carats in 2018 to 10 million carats by 2023, Vast Resources, a UK listed mining concern will next week sign a joint venture agreement with the Zimbabwe Consolidated Diamond Company (ZCDC) to mine diamonds in Chiadzwa.

Last month, Vast resources signed a joint venture agreement with Chiadzwa Mineral Resources (CMR) to establish Katanga Mining (Pvt) Limited – a company meant to represent the Chiadzwa community interests in the diamond concession.

Mines and Mining development minister Winston Chitando said the agreements are part of the progress being made towards the attainment of the $12 billion mining revenue by 2023.

“Katanga will be signing a joint venture agreement with ZCDC, which holds the mining titles and the details as to the structure and modalities of how that will work will be given at the announcement next week after the signing ceremony,” he said.

ZCDC is targeting to produce 4.1 million carats of diamonds this year, up from 2.8 million carats in 2018. At peak in 2012, Zimbabwe produced 12 million carats. The southern African nation is targeting to grow its diamond industry from 3.4 million carats in 2018 to 10 million carats by 2023.

In terms of world mineral facts and statistics, Zimbabwe is the third largest producer in the world, the 6th largest diamond producing country, the 5th lithium producing country, the seventh chrome producing country, within top 10 ranking gold producing country and the 10th largest nickel producer.

But, the country is extracting only a quarter of its 40 existing minerals with lack of capital being cited as the major obstacle affecting full exploitation of other untapped minerals.

The competitiveness of doing business for the mining sector has been negatively affected by high cost of doing business in the southern African nation coupled by high cost drivers, poor infrastructure, unrealistic foreign currency controls accelerated by forex receipts retention, high tax burdens and policy flip flop.

The major cost drivers are procurement at 49%, labour and or wages at 23%, statutory payments at 14% and energy at 10%. Given that most mines procure 90% of their inputs outside the country and require foreign currency, Economist Gift Mugano said, retention policy is going to affect negatively the operations of most mines.

Precious stones and metals which include gold, diamonds and PGMs raked in over a billion dollars in 2018 which is a drive towards a multi-billion sector economy. General mineral exports were on the upward trend for Zimbabwe but yellow metal as the current major contributor to the mineral GDP.

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