Maravi

(NEWZIMBABWE) Zim eyes $2bn annual diamond windfall

Zim eyes $2bn annual diamond windfall
by Nelson Banya, Reuters
31/08/2010 00:00:00

ZIMBABWE'S diamond output from its Marange fields will reach 40 million carats in the next three years, with annual revenues expected at around $2 billion, a government adviser said on Tuesday.

The government says it has stockpiled 4.5 million carats from its two joint venture mines in Marange since January and that it sold its first stones last month after approval from global diamond industry regulator, the Kimberley Process (KP).

"With the new diamond find in Chiadzwa (Marange), we're estimated at 40 million carats per year and $2 billion per year in revenue," said Belgian diamond expert Filip van Loere in an interview. He is advising the government on ensuring compliance with the KP.

"Zimbabwe has been propelled to the number one spot as the world's most important player and it will be number three in value. That is estimated to come along within the next two to three years."

Zimbabwe's unity government, formed by President Robert Mugabe and Morgan Tsvangirai, now prime minister, says it needs $10 billion to fix an economy ravaged by hyperinflation, which peaked at 500 billion percent in December 2008.

Van Loere said Zimbabwe could surpass top diamond producers like Russia, Botswana and South Africa, but said a sudden increase in output on the global market could force prices down.

"The main issue for Zimbabwe is to be careful in harvesting this resource. Zimbabwe might add 20 percent to global trade, but then prices will go down at least 60-70 percent, so we have to be responsible, Zimbabwe should not become the main producer just for the sake of it," van Loere said.

Zimbabwe's government has formed two joint venture firms -- Mbada Diamonds and Canadile Miners -- with South African partners to mine the Marange diamonds, but van Loere said there was scope for more mines in the vast fields.

On Tuesday, Canadile Miners launched the construction of a $20 million diamond processing and auction centre to the west of the capital Harare.

"Currently, the two mines occupy 10 percent of the total area. We need two or three more firms in the area," said van Loere.

Over 30,000 illegal diggers descended on the Marange fields in 2006, prompting the government to deploy the army to stop rampant panning and smuggling.

Rights groups, however, accuse the security forces of committing atrocities during the crackdown on the panners. - Reuters

Labels: CHIADZWA, DIAMONDS

posted by MrK @ 5:15 AM