Alrosa, the largest diamond producer in the world, will develop new mineral deposits in Zimbabwe. To do this, Alrosa (Zimbabwe) Limited was founded in the capital of the republic, Harare, said the general director of Alrosa, Sergei Ivanov, on Monday, January 14, following a meeting with President of Zimbabwe Emmerson Mnangagva.
The subsidiary Alrosa will explore, search for and extract minerals with the prospect of creating joint diamond-mining and other mining enterprises. “Alrosa” is ready both to develop joint projects for the exploration and mining of diamonds in Zimbabwe, and to support the country in the development of its own diamond mining industry, the press service of the word Ivanova reports. Investments and activities of the company in Zimbabwe will be determined by the results of the preliminary work of the specialists of Alrosa, who will arrive in the country in February, the company representative explained.
According to Alrosa, Africa accounts for 47% of the world's diamond reserves. The company has been carrying out geological exploration in Zimbabwe since 2013, but in 2016 it left after the reform of the diamond mining sector in the country. Now in Zimbabwe, everything is changing rapidly, says Nikolai Sosnovsky, director of metallurgy and mining at Prosperity Capital Management: “After the change of power, the attitude towards investors became more friendly, the government is again seeking to attract them.”
“The main region of the company's presence, Yakutia, is already strongly explored, the prospects for finding there light objects are small. And in Africa there is a chance to discover new large objects, - continues Sosnovsky. “Bearing in mind its success in Angola, Alrosa is trying, with relatively small means, to guarantee its presence in a potentially important region for future production.”
In 1993, with the participation of "Alrosa" in Angola, a joint venture "Catoca" was established, in which the Russian company owns 41%. The same number of Angolan state-owned companies Endiama. Catoca is developing the Luasche field. Its production is about 7 million carats annually, Ivanov cited the data in an interview with Russia 24 TV channel in spring 2018
Risks in Africa are higher than in Russia, said Oleg Petropavlovsky, a senior analyst at BCS Global Markets: “But in the long term, deposits around the world will continue to deplete, so the search for new facilities is justified.” According to his estimates, Alrosa's exploration expenses in Zimbabwe in the near future will not exceed several tens of millions of dollars. Expected in 2018, the volume of capital expenditures is 28.3 billion rubles. (about $ 422 million), so a little more than 2% of total investment may be spent on geological exploration of new facilities in Zimbabwe.
Back in 2012, “Alrosa” developed the “Development Strategy for Projects in Africa” and it corresponds to the new development strategy of the company until 2024, adopted in 2018, says a representative of “Alrosa”. The company is interested in increasing its presence in African countries, in the search and implementation of geological exploration projects and the creation of new diamond mining companies on the continent, he explains.
“Given the growth of the middle class and, accordingly, the consumption of diamond jewelry in emerging markets, in the near future we can expect an increase in the volume of African diamonds in the global market. Under these conditions, it is necessary to establish mutually beneficial cooperation between African countries and foreign partners, ”the representative of the diamond company concluded.