Zimbabwe Parastatal Lacks Diamond Mining Capability, Gono Says

Dr Gideon Gono, governor of the Reserve Bank of Zimbabwe recently stated that the country’s state-owned mining company, Zimbabwe Mining Development Corporation (ZMDC), had so far raised only $15 million as a result of its diamond mining activities.

The parastatal ZMDC seized control of the Marange diamond mining and exploration operations in April 2007, following an effort by the government to halt diamond smuggling in the area.

"This confirms what I have always been saying – that what the parastatal is simply doing is mechanized panning, it has no capacity to mine diamonds," Gono said, who was speaking to political leadership in the northern province of Mashonaland Central, as reported by Harare news source The Herald.

Dealers and smugglers operating in the area before ZMDC took over operations were earning approximately $50 million per month, according to the report. In addition, Gono commented last year that a potential $1.3 million could be earned from the diamond operations in the area.

In March, African Consolidated Resources Plc (ACR), a London-listed Zimbabwean minerals exploration company, announced plans to build a diamond processing facility for diamonds mined from the Marange fields. At the time it was reported that the plant would begin operating this month.

ACR is reportedly working to form a joint venture with the government to be allowed access to Marange, in accordance with a law requiring 51 percent of mineral mining companies to be owned by Zimbabwean natives.

The company previously mined diamonds in Marange but was dislodged from the area in late 2006 when thousands of unlicensed and illegal miners (commonly referred to as “diggers”) entered the area searching for diamonds.

According to the report, the Ministry of Mines and Mining Development has said that the diamond fields belong to the people of Zimbabwe and has mandated that ZMDC oversee mining operations in the area.