Mbada, Marange explore synergies

HARARE – Diamond miners Mbada and ?Marange Resources (Marange) are reportedly in talks to enhance their cooperation in exploration activities in the vast Marange fields.

Although Mines permanent secretary Prince Mupazviriho and acting Zimbabwe Mining Development Corporation (ZMDC) chairperson Florence Gowora expressed ignorance over the issue, the development is expected to improve the companies’ mining efficiencies and boost shareholder value.

“As you would know, the companies operate in the same area and virtually next to each other, so they are exploring how best they can exchange experiences with a view of synergising, exploration and information exchange,” industry insiders said.

“And given that Mbada has done extensive exploration in the area, it is least surprising that there are such developments and one actually hopes these anticipated synergies will turn into much-more broader partnerships to the benefit the nation,” they said, adding “Mbada and Marange have a common shareholder, so it makes a lot of sense to have these arrangements”.

With the Manicaland-based miners also under pressure to increase remittances to Treasury, the government insiders said this was “a long overdue and not so peculiar operational move as such strategies were employed by other miners worldwide to manage costs, and improve   earnings.

In Zimbabwe, for instance, top tier miners Impala Platinum and Bermuda-based Aquarius have an equal share in Mimosa, but also have a platinum group metals (PGMs) processing deal.

Mbada and Marange’s foreseen cooperation also comes as exploration has generally been identified as one of the major cost drivers in mining, and ZMDC chairperson Godwills Masimirembwa said earlier this year that production costs at Chiadzwa had risen to 38 percent, including the Zimbabwe Revenue Authority’s 15 percent royalties.

According to GFMS Mine Economics, the global diamond mining sector has undergone a radical change over the medium-term with operating costs rising across the breadth of the industry, thus further squeezing dwindling margins.

Mining experts also told an inaugural diamond conference in November last year that Zimbabwe’s economic prospects were hinged on an extensive exploration programme to determine the success of the key industry.

In that respect, government has fashioned and invested nearly $4 million into an exploration company known as the Mining Promotion Corporation.

Mineral exploration is a process that involves investigating the contents of known ore deposits and potential sites by withdrawing a small diameter core of rock from the ore body.

With government owning Obed Dube’s Marange 100 percent, Zimbabwe also has a 50 percent share of Mbada and the other half in South African-based New Reclamation Group.

Through the ZMDC, government also owns a significant stake in other gem miners, including Anjin Investments ? a joint venture with China’s Anhui Foreign Economic Construction Company ? Diamond Mining Corporation and Gye Nyame Resources.

As the country holds the number six spot in terms of world diamond deposits — and a potential to control about 25 percent of diamond supply — Zimbabwe currently produces about 8,2 million carats annually and is vigorously pursuing efforts to value add its minerals, particularly diamonds.

Masimirembwa recently said Zimbabwe sold $685 million-plus worth of gems last year and the country intends doubling production from the controversial eastern fields this year.

The ZMDC boss also added that the country was hoping to increase exports to 16,7 million carats.

And for companies like Marange ? which lost around $5 million in revenue due to flooding early this year — actually needs such kind of boost and cooperation as the Mbada exploration venture.

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