The government cedes 70% ownership to the Russian company, while more than 30,000 people face eviction to pave the way for new mining initiatives.

The government on July 16th signed a joint venture agreement with the world’s top diamond producer by volumes, Russia’s Alrosa, for the exploration, extraction and marketing of diamonds, in a development expected to transform the country’s diamond sector.

The move is an endorsement of President Emmerson Mnangagwa’s robust drive to attract investment in a bid to turn around the economy, The Herald commented.

Zimbabwe Consolidated Diamond Company (ZCDC), a government diamond mining firm, signed the agreement with Alrosa in a development expected to boost diamond production and thrust the sector onto the path to attaining 10m carats by 2023.

Alrosa CEO Sergey Ivanov and ZCDC chairman Kilian Ukama signed the agreement in Harare at a ceremony witnessed by President Emmerson Mnangagwa.

The latest deal comes after a Chinese firm, Anjin Investments, was recently relicensed to extract gems in Chiadzwa.

Under the agreement, Alrosa will release about US$12m for diamond exploration in the country.

ZCDC’s Kilian Ukuma said the signing of the agreement marks the beginning of a partnership that will enable Zimbabwe to become one of the top five rough diamond producers in the world in the next five years.

“Alrosa has a proven track record as a joint venture partner in the region and globally. This will create more value for the country, government and other stakeholders, resulting in the rapid development and growth of the national economy in line with government’s Vision 2030.

“This joint venture will yield significant benefits to the communities and the nation through employment creation, generation of foreign currency, contribution to the fiscus, enterprise development and [uplifting] of communities,” said Ukama.

Alrosa will have a 70% stake in the joint venture with a provision set for possible expansion “in the territory of the whole country,” according to the agreement. The shareholding will be renegotiated at agreed intervals of the project cycle up to a split of 49-51% in favour of Alrosa, New Zimbabwe reports.

diamondsImage: CC 2011

President Mnangagwa’s government has amended the country’s controversial black empowerment law, which gave locals a mandatory 51% plus stake in all foreign firms operating in Zimbabwe. Only diamond and platinum exploration, mining and marketing have retained the mandatory 51% local ownership, which the government seems to have ignored.

Meanwhile, New Zimbabwe also reports that an estimated 30,000 people in six communities countrywide are set to be displaced to pave way for new mining initiatives without compensation, according to the Centre for Natural Resource Governance (CNRG).

CNRG director Farai Maguwu said on July 15th that communities in Masvingo, Marange-Kusena, Chimanimani, Dotito and Chihota have been given notice that they will be moved to Gokwe, and that “many more communities are likely to be displaced.”

The CNRG director accused the government of failing to prepare the people for eviction.

“People have a constitutional right not to be moved by anyone to anywhere. We are doing capacity building workshops and bringing in lawyers to speak to them about the law,” said Maguwu.

“We are also mobilising people to protest against this land grabbing by government officials. We fear that Zimbabwe is going back to the 1890s when the British came in and took our ancestors off their land.”

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Find out more in the Africa Research Bulletin:

Zimbabwe: IMF Backs Reforms
Economic, Financial and Technical series
Vol. 56, Issue 5 – July 2019

Zimbabwe: China: Seeking Investment
Economic, Financial and Technical series
Vol. 56, Issue 4 – June 2019

Zimbabwe: White Ex-Farmers to Get Compensation
Economic, Financial and Technical series
Vol. 56, Issue 3 – May 2019

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