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Botswana’s Okavango first-half diamond sales up 9 percent

14 July 2017 Comments (0) Latest Updates from Reuters

GABORONE (Reuters) – Botswana’s state-owned Okavango Diamond Company (ODC) sales rose 9 percent to $309 million in the first half of the year as demand improved, its deputy managing director said on Friday.

Marcus ter Haar told Reuters the company had sold 1.8 million carats in five auctions held since January.

“The volumes of carats sold were 3 percent higher than the same period in 2016,” he said.

ODC, which plans to have 10 tenders this year, sells 15 percent of the output of Debswana, a joint venture between Anglo American Plc’s De Beers and Botswana, which is targeting production of 20.5 million carats this year.

 

(Writing by Olivia Kumwenda-Mtambo, editing by David Evans)

 

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South Africa Looks to Modern Mining for Youth Empowerment

15 August 2016 Comments (0) Africa, Business, Featured

youth in mining summit

South Africa’s mining industry to make use of non-traditional programs to empower youth

Even in 2016, the term “mining” brings to mind images of dust-covered coal miners with pickaxes. South Africa is rolling out a youth empowerment program in urban mining through its state-run mining and metallurgical entity, Mintek, that couldn’t be more different. Contrary to what its name suggests, urban mining does not involve any actual resource extraction. Urban mining is the slightly more glamorous and modern-day version of dumpster diving: this field re-appropriates pre-existing materials, such as recycled glass, into commercially viable semi-luxury goods.

At a recent South African conference, the Youth Mining Summit, government officials spoke about their desire to empower South Africa’s youth to look into the mining sector for jobs. The Youth Mining Summit occurred in mid-June, over the 40th anniversary of the infamous SOWETO Uprisings. To commemorate the historic youth uprising, South Africa dedicates each June to focus on youth development issues. This year, Deputy Director General of Mineral Regulation Joel Raphaela discussed the government’s efforts to encourage more young South Africans to go into the mining industry: “We continue to reach the youth through the department Learner Week Programs, where we create mining awareness by organizing mine visits around the country.” This sort of exposure, Raphaela hopes, will show young people from diverse backgrounds and educational qualifications that there are numerous job opportunities within the mining sector.

One Man’s Waste

Mintek Small Scale Mining & Beneficiation Program

Mintek Small Scale Mining & Beneficiation Program

An important component of this effort is the training and mentorship opportunities available to interested youth. Since 1934, Mintek has been South Africa’s leading mining and metallurgical research and development center. As South Africa begins to put a more visible emphasis upon black empowerment, Mintek is an integral part of a youth development program that looks to train young people in marketable metallurgy. Mintek emphasizes its newly branded urban mining program as the future for sustainable employment. A simple example of urban mining is the creation of glass beads from recycled bottles: Mintek provides training in all of the skills needed to turn glass bottles into beautiful jewelry with everything from different crushing techniques to the variety of ways to melt and re-purpose crushed glass. According to Mintek, “Urban mining presents numerous opportunities for young people to use urban waste to manufacture saleable products, without necessarily having a higher education qualification. The glass bead manufacturing process is a great example of this.”

Last year, Mintek provided 148 youth with practical training in partnership with the Mining Qualifications Authority (MQA), and the Department of Science and Technology. Thirty-six of these graduates have been placed in foundries across the country, where they continue to grow their theoretical and practical skill sets in the metallurgical field. Unemployed graduates from previously disadvantaged groups have the opportunity to receive further training in the field of occupational hygiene, surveying, mining, electrical and mechanical engineering. Not only is Mintek providing hands-on training, but it is working with local governments to set up training centers in the Northern Cape. Two such centers were established in Upington and Prieska, where students can get practical training for making jewelry from locally-mined semi-precious stones.

A Diamond in the Rough

South Africa’s mining stretches beyond metallurgy and re-appropriation of urban waste to the most glittering of all gems: diamonds. After the 2015 launch of the South African Young Diamond Beneficiators Guild, a collective of predominantly black-owned small and emerging diamond manufacturers, young adults were accepted into training programs to learn the cutting and polishing techniques employed to refine rough diamonds. 25 of the young trainees were accepted into a two-year training program based in Italy, but will also travel to Switzerland to learn about the technical art of watchmaking.

A watchmaking teaching curriculum is currently being developed in South Africa. Once it is completed and through the approval process, South Africa would be able to teach the special skill set for the first time in its history.

Digging Deep to Lift Up Youth

All of these initiatives have the same goal: to empower youth with marketable skills that will not only provide them with sustainable income, but will allow them to participate in the global economy. Training programs are blossoming in everything from urban mining to watchmaking, and it seems that this is only the beginning. As Raphaela said, the “economic empowerment of young people is not an option, but a national imperative.”

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Anglo American appoints Bruce Cleaver CEO of De Beers

27 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

(Reuters) – Global mining company Anglo American Plc said it appointed Bruce Cleaver as chief executive of its diamond mining unit De Beers Group, after previous CEO Philippe Mellier decided to step down.

De Beers, the world’s largest diamond producer by value, will remain part of Anglo American’s operations even after a radical restructuring of the latter, in the belief that surging Chinese and Indian demand for diamonds will outstrip dwindling supply.

Cleaver, previously group director of strategy and business development, will take over the role on July 1, the company said.

Cleaver, 51, was first appointed to De Beers’ board in 2008 and served as its co-acting CEO in 2010 prior to Mellier’s appointment.

Anglo American has an 85 percent stake in De Beers.

 

(Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi and Sunil Nair)

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Zimbabwe’s platinum industry calls for $2.8 bln in new investment

20 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE, (Reuters) – Zimbabwe could double annual platinum production to more than 900,000 ounces in the next decade, making the metal the nation’s top export earner but current producers need $2.8 billion in new investment to do so, an industry association said on Friday. The southern African nation holds the second largest known reserves of platinum after South Africa but mines have struggled with low prices, a black empowerment law forcing mines to sell more than 50 percent of the business to locals, and power shortages. Zimbabwe Platinum Producers Association Chairman Winston Chitando told the annual meeting of the Chamber of Mines in the resort town of Victoria Falls that the industry needed new investment to raise annual production by existing producers from current levels of 458,000 ounces a year. “With vast platinum reserves, the sector has potential to increase production by the current producers from about 13 tonnes (458,562 ounces) to 20 tonnes (705,479 ounces) by 2020 and to 26 tonnes (917,123 ounces) by 2025,” Chitando said.

Anglo American Platinum, Impala Platinum and Aquarius Platinum are the three companies currently operating platinum mines in Zimbabwe.

He did not comment on the separate Russian-backed project which was announced by the two governments 20 months ago for the joint development of the Darwendale mine which was projected to be producing up to 800,000 ounces a year by 2024. http://reut.rs/1Tojx6y

Work on this project was still at the exploration stage, Zimbabwe’s mining minister told Reuters in March.

Chitando said on Friday revenue from platinum, which is the third largest export earner after tobacco and gold, could become the biggest at $1.2 billion in the next four years if more money was invested. “The industry requires around $2.8 billion over the next five years to ramp up and sustain operations. Bottlenecks that undermine capital inflows include clarity on indigenisation,” Chitando said. Under the Indigenisation and Economic Empowerment Act, which was passed in 2008, foreign-owned businesses are required to sell at least 51 percent of their local operations to Zimbabwean investors. But on April 12 President Robert Mugabe said the empowerment policy was confusing potential investors and made it hard to compete for foreign investment.

Noah Matimba, chairman of Zimbabwe Gold Producers Association said at the Chamber of Mines meeting that an investment of $600 million into existing gold mines would raise production to 50 tonnes.

The mining chamber projects gold output at 24 tonnes this year, up from 18.7 tonnes in 2015.

Gold producers say weak prices and electricity shortages and high tariffs are the biggest threat to producers.

Partson Mbiriri, the permanent secretary in the ministry of power and energy development, said the country would be self-sufficient in electricity generation by 2019 at the latest.

Zimbabwe’s power demand stands at 1,400 megawatts (MW) a day, while generating ranges from 1,000 MW to 1,200 MW. The deficit is met by imports from South Africa and Mozambique.

 

(By MacDonald Dzirutwe. Editing by James Macharia, editing by David Evans)

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Mugabe looks to nationalize Zimbabwe’s diamond industry

19 April 2016 Comments (5) Africa, Business, Featured

Robert Mugabe

Zimbabwe’s longtime President, Robert Mugabe, has announced the state will seize all of the nation’s diamond mines.

Zimbabwe’s controversial President, Robert Mugabe, has announced a massive change to the country’s diamond mining industry, in that all assets will now be state owned. In a move that is a throwback to his socialist roots, Mugabe claims that foreign mining companies have profiteered for too long off one of the nation’s most valuable commodities and he will ensure that the nation now reaps the rewards from its diamonds.

Mugabe gave an interview in early March to the state broadcaster ZBC, during which he expressed his anger at what he sees as foreign companies plundering Zimbabwe for a precious, natural resource. Mugabe claimed that, in doing so, foreign companies made around $15 billion in profits, while Zimbabwe itself had only earned $2 billion in the same period of time and, as such, the diamond rich region of Marange would now be a “state monopoly”.

The Marange diamond fields were only discovered in 2006 but by 2013 they were producing an astonishing 16.9 million carats of diamonds, which is akin to 13% of the world’s rough diamond supply. However, this output has dropped significantly due to reluctance by companies to invest in deeper exploration. Industry group Kimberly Process states that in 2014 Zimbabwe’s diamond production was around 4.7 million carats.

While it is understandable that Mugabe may feel the country needs to earn a greater proportion of the wealth that the Marange region is host to, issues of corruption and internal theft are perhaps as large a problem as outside sources. As far back as 2012, South Africa’s former President Thabo Mbeki warned that Zimbabwe was losing much of its diamond wealth to a “predatory elite” within its own nation.

Illegality plagues Zimbabwe’s diamond industry

The NGO Partnership Africa Canada (PAC), which monitors conflict minerals in Africa, produced a damning report in 2012 that stated government ministers in Zimbabwe were the ones becoming rich off the back of stolen diamonds. Corruption and theft were so rife that the organization said, “The scale of illegality is mind-blowing” and the investigation named former mines minister Obert Mpofu as having amassed an unaccountable fortune since mining began. Mpofu was said to have been spending $20 million “mostly in cash” over a 3 year period.

If high level government figures are the very people denying the state treasury of its rightful income from Marange’s diamond mines, then will a state owned monopoly make much difference? While Mugabe has angrily pointed the finger of blame abroad, it remains to be seen whether those now in charge of the state’s new body, Zimbabwe Diamond Consolidated Company, can ensure that the profits from diamond minds find their way to the rightful government coffers.

What is certain is that the foreign companies who have been mining in Zimbabwe will not take Mugabe’s orders without a fight. China has developed closer trade agreements with Zimbabwe in recent years and the Chinese-run mining company Anjin Investments has already challenged Mugabe’s ruling at the High Court. The early indications are that the courts might well side with the mining companies as the largest mine, Mbada Diamonds, has already won its case at the High Court and been given full control of its assets.

Whether this is a ruling that Mugabe’s government will accept and adhere by is an entirely different question. While some voices have expressed concern over how this dispute could affect trade between China and Zimbabwe, Mugabe himself dismissed such worries, saying, “I don’t think it has affected any of our relations at all…I told President Xi Jinping that we were not getting much from the company, and we didn’t like it anymore in this country.”

Zimbabwe diamond mine

Zimbabwe diamond mine

Where does Zimbabwe’s diamond industry go from here?

If the government of Zimbabwe overcomes the legal challenges, maintaining the $1 billion worth of Chinese trade despite seizing Chinese interests, and eradicates the corruption that has plagued the mining industry thus far, then it would obviously earn considerably more money. However, these are a sequence of unlikely outcomes given the manner in which the move has come and given the history of the mining industry in Zimbabwe.

There is the additional concern that potential investors in other mining projects within the country could be put off by this recent announcement regarding diamonds. John Turner, head of the mining group at law firm Fasten Martineau says, “To the extent that private firms were looking at Zimbabwe thinking they were ahead of the curve, this may give them pause for though.”

Any concerns outside of Zimbabwe have not appeared to weaken the resolve of Mugabe or his government. They insist that the problem lies with theft from abroad and moreover that recent mining has actually been illegal, as the mining companies had not renewed their licenses.

Amid conflicting claims and ongoing lawsuits, who emerges as having control over the lucrative Marange diamond mines over the next few months will be of interest to many parties and people both in and outside of Zimbabwe.

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Zimbabwe orders diamond mines shut, says not nationalising

22 February 2016 Comments (0) Africa, Business, Latest Updates from Reuters

HARARE (Reuters) – Zimbabwe ordered diamond mining firms to stop operations immediately on Monday and leave the Marange fields as their licences have expired but denied the government was seizing the mines.

The diamond fields in the east of Zimbabwe near Mozambique are mined by nine firms. Eight, including two Chinese-run companies, are joint ventures 50 percent owned by the government and the other one is wholly owned by the state.

“The JV companies neglected or failed to renew the special (mining) grants. Some expired as far back as 2010 and others in 2013,” Mines Minister Walter Chidhakwa told reporters and executives from the mines in question.

“Since they no longer hold any titles, these companies were notified this morning to cease all mining activities with immediate effect,” he said, adding that Harare’s position was final and not negotiable.

Monday’s move follows months of wrangling between the mining companies and the government over its plans to merge the mines into one new entity to ensure efficiency and transparency, a proposal opposed by some of the firms.

Chidhakwa said the state-owned Zimbabwe Consolidated Diamond Company (ZCDC) will now hold all the diamond claims in the country, but said the state was not nationalising the mines.

“We are not expropriating. Remember the concession that we are taking does not belong to the company … it vests in the state. We are not touching the equipment, the bulldozers, the excavators, everything that you have put up remains your assets,” Chidhakwa said.

The latest move by President Robert Mugabe’s government could further tarnish the country’s image as a risky investment destination, with investors already unnerved by Mugabe’s drive to force foreign-owned firms to sell majority shares to locals.

“We have created a very unstable and threatening investment environment, no matter which sector you invest in Zimbabwe you will be interfered with,” said economic consultant John Robertson.

Zimbabwe was the eighth largest diamond producer in the world with 4.7 million carats in 2014, according to industry group Kimberly Process. Last year, the government received $23 million in royalties and other fees from diamond mines, down from $84 million in 2014.

Chidhakwa gave the firms, including Chinese-run Anjin and Jinan, 90 days to remove their equipment and said company officials now required government approval to access the mines.

He said companies in Marange had not fulfilled their investment promises and refused to be part of a new ZCDC, which was part of the reason why the government had to cancel the expired licences.

Robert Mhlanga, chairman of the largest mine in Marange, Mbada Resources, declined immediate comment on the move.

 

(By MacDonald Dzirutwe. Editing by James Macharia and David Clarke)

 

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Diamond jewellery sales rise to record in 2014: De Beers

21 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Diamond miner De Beers said global diamond jewellery sales grew by 3 percent last year to a record of over $80 billion, helped by strong demand in the United States, but warned 2015 will be tough for the industry.

De Beers said sales of polished diamonds rose 7 percent in the United States, while demand in China and India grew by 6 percent and 3 percent in local currency terms, respectively.

“Growth would have been almost five percent had it not been for the strengthening of the U.S. dollar against the currencies of several of the major diamond consumer markets in the latter part of 2014,” De beers said in a report.

The company, a subsidiary of global miner Anglo American, warned growth would be muted in 2015 as the strong dollar and an economic slowdown in China weigh.

De Beers chief executive Philippe Mellier said many industry participants started the year with more inventory than planned due to weak demand for diamond jewellery at the end of 2014.

“This led to a period of ‘indigestion’ in the diamond value chain and as a result we expect 2015 as a whole to be a more challenging year,” Mellier said.

De Beers said global rough diamond production fell by 3 percent in volume terms in 2014 to about 142 million carats, remaining well below the 2005 peak of around 175 million carats.

The company said expected output from expansion projects currently under way in the sector would lift total carat production to levels similar to the mid-2000s.

 

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