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The mining licences of foreign companies failing to comply with Zimbabwe’s controversial indigenisation law have not, and will not, be revoked while the Zimbabwe Chamber of Mines is in discussion with the country’s government on the best route to implement the legislation. Read on page 16 of this edition of Mining Weekly of the government’s intention to engage the stakeholders and not to withdraw mining licences. While certain government spokespersons are doing their best to calm fears, investors are unlikely to be taken in under these topsy-turvy circumstances. There is just too much negative noise with the hardliners receiving the lion’s share of airtime, which has resulted in the investment red light being put firmly back on.

Rio Tinto has been in Zimbabwe for some time and has been trying its best to exercise good corporate citizenship in the troubled country, but that does not seen to have paid off for its Murowa diamond mine. Once the largest diamond-mining operation, it is now reportedly eclipsed by the little known Mdaba Mines becoming Zimbabwe’s largest diamond producer. Read on page 53 of this edition of Mining Weekly of Harare-based Mbada reportedly producing more than 150 000 ct a month from its operations at the Marange diamond fields in eastern Zimbabwe, compared with Murowa’s 250 000 ct a year. Mbada is one of four companies mining diamonds at Marange, where Human Rights Watch has accused Zimbabwean authorities of killing local villagers and informal miners. In 2008, more than 200 people were killed when security forces seized the Marange fields, according to the New York-based group.

While Rapaport Group’s RapNet Diamond Trading Network banned its members from dealing in Marange diamonds because of reports of severe human rights violations in the area, the Kimberley Process permitted Zimbabwe to hold two diamond auctions this year. Annual income from the Marange field could rise to $2-billion if the country is allowed to export gems freely, Zimbabwe Mines Minister Obert Mpofu has been quoted as saying, in the State-controlled Herald newspaper. Meanwhile, Botswana (this edition of Mining Weeklyon pages 6 and 7) has staged an economic coup for Africa by persuading De Beers to transfer of the centre of diamond gravity to Botswana. The new deal with De Beers strips the United Kingdom of the role of aggregating, valuing and selling all De Beers diamonds and places these roles firmly on the African soil where the precious stones are dug.

The Botswana government sees the deal as an inflection point that will place Botswana at the highest point within the global diamond firmament. The deal also allows the Botswana government to lay direct claim to 10% of the stones emerging as run-of-mine rough from Debswana, of which the government is already in a 50:50 joint venture partnership with De Beers, and to sell those diamonds into the market independently. The 10% of output will rise to 15% over five years in the arrangement announced at the new Diamond Trading Company (DTC) Botswana complex in Gaborone, by the government of the Republic of Botswana and the De Beers group.

Mining CEOs are reportedly continuing to ride a wave of high salaries and cash bonuses on the backs of overall solid company performances and strong prices for certain commodities over the past year. Read on page 21 of this edition of Mining Weekly of the question now being asked about whether or not the high salaries and bonuses that are tied to company and market performance, will remain as strong next year.

PwC reports that mining executives may have seen an even bigger bulge in their wallets this year, had it not been for climbing operational costs and some equity markets softness. Fierce competition to attract and retain qualified mining professionals across the spectrum of positions is said to be driving up compensation costs for mining companies. As storm clouds gather over the Eurozone and the US, memories of the 2008 crash and the ensuing collapse in commodity prices are sure to be surfacing, however.

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