Russia’s Alrosa seeks majority stake to mine in Zimbabwe

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The Chief Executive Officer of Alrosa, Sergey Ivanov said the Russian state-controlled miner will investigate the quality of Zimbabwe’s diamond reserves over the next six months. However, the company will only start mining if it can take a majority stake of such a project.

Zimbabwe seeks to attract investment and has scrapped legislation that restricts foreign participation for some commodities. The country is yet to do so for diamonds and platinum, but has said that it will.

Ivanov said “of course we’ll only be ready to participate in projects in cases where we can have management control and operational control of the assets”. He noted that it would mean a stake of at least 51 percent, adding that he would be confident of achieving that if it gets to the stage of detailed discussions on how to advance a project.

Since the days of Zimbabwe’s independence war against British rule, Russia and China have been a political ally of the country. This year, the African country selected Alrosa and China’s Anjin Investments to partner its state diamond company.

Alrosa, the biggest diamond producer by volume, as well as Anglo American’s De Beers, the biggest in value terms, both say supply will shrink in the coming years as mines, such as Rio Tinto’s Argyle project, become depleted.

Laboratory-grown diamonds will add some supply. But Alrosa, like De Beers, says man-made stones are a separate market and have no re-sale value, in contrast to natural gems. De Beers last year began marketing laboratory diamonds as jewellery for the first time, but Ivanov said that Alrosa has no interest in following suit.
In 2018, Alrosa said it was increasing its stake in Angola and Ivanov expects a deal to increase the company’s stake in Angola. Alrosa and the Angolan government would each have a 41 percent stake, with the rest held by Chinese investors.
Ivanov said stake size is not the only consideration and in Angola the company has reached agreement on corporate governance, transparency and has established an advisory board.

 

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