ALROSA Signs Joint Venture Agreement in Zimbabwe

Mining and Exploration
16/07/2019 18:03

Alrosa, the world's largest diamond mining operation, and Zimbabwe's national diamond miner Zimbabwe Consolidated Diamond Company (ZCDC) have signed a joint venture agreement to develop diamond deposits in Zimbabwe. The Russian miner made certain to emphasize that its developmental work and any future mining activities would not take place in the troubled Marange region: "We would also like to note once again that ALROSA does not plan operations in Marange."

According to the terms of the agreement, ALROSA gets a 70% controlling stake for the development of greenfield projects, ZCDC – 30%. First of all, the joint venture will be engaged in geological exploration of greenfield deposits. Further objectives of the cooperation agreement include diamond mining and independent sales of rough diamonds in external markets. The new joint venture will be able to work not only with the licenses ZCDC has today, but also in the territory of the whole country. In case a new prospective area is discovered, the company will contact directly the Zimbabwe Ministry of Mines and Mining Development requesting a new license for this area.

“Creation of a joint venture is a major step in the cooperation with our partners in Zimbabwe," said ALROSA Deputy CEO Vladimir Marchenko. "We are committed to productive work in the exploration of new promising areas and subsequent diamond mining. Our specialists have been working in Zimbabwe for more than three months now, and the national authorities have been of great support to them. We have chosen various projects for the joint venture, and part of them is to be launched this autumn. Of the existing fields for development, we are preliminary considering the areas located in the Chimanimani region.” In December 2018, ALROSA established an affiliated company in Zimbabwe, ALROSA (ZIMBABWE) Limited, for the implementation of projects in mineral prospecting, exploration and mining operations with a view to creating joint diamond-mining and other mining enterprises. 

The Russian miner has published a file concerning Alrosa's value proposition to Zimbabwe.

Not in Marange

Last week, Alrosa was the subject of a blistering critique by Zimbabwean NGO, the Centre for Natural Resource Governance (CNRG), based on what turned out to be 'fake news'. Entitled "Alrosa enters Zimbabwe’s Marange killing fields", the letter states: "Alrosa ... has officially entered Zimbabwe’s Marange diamond fields where scores of artisanal miners are killed annually whilst hundreds are tortured every month by the quasi-state security guards and state security agents ." Criticising the secrecy with which it says Alrosa made the deal and claiming the community condemns mining operations in Marange, it recommended that Alrosa should seek a social license from the Marange community, publish its contract with the Zimbabwe government for the sake of transparency and commit to conduct its business in an ethical manner. 

Alrosa fired right back with its own announcement, "Alrosa does not plan operations in Marange". It reads, "In response to the distributed CRCG message that ALROSA goes to the Marange region, we officially announce: ALROSA only explores and considers the feasibility, among other parts of the country, of working in the Chimanimani area. ALROSA has never and under no circumtances considered and won't consider the possibility of entering the Marange region. All reports that ALROSA officially entered Marge or is going to ... must be considered false."

The CNRG, in return, backtracked by saying that it had only reported on information that was already in the public domain through Zimbabwe's State owned newspaper, The Herald, which published a story on 9 July saying that Alrosa was already licensed in the Marange region. "The news generated a lot of anxiety in the communities CNRG operates in," they write in an email. "Our goal," they add, "is to defend the rights of the communities, hence we could not ignore such a pronouncement from the State owned publication."