Harare – Russian state-controlled miner Alrosa will assess the quality of Zimbabwe's diamond reserves over the next six months but would only start mining if it can take a majority stake in such a project, the company's chief executive said on Monday.

In a bid to attract foreign investments the Government has scrapped legislation that restricts foreign participation on some commodities with the exception of platinum and diamonds.

The miner earlier announced  in 2018 that it has made a decision start mining operations in Zimbabwe after engagements with Harare's authorities further stressing that it will will implement projects for exploration and mining operations with a view to establish joint diamond and other ore mining enterprises.

In this regard, Alrosa Zimbabwe was established on December 6, 2018  with prospects that by January 2019 experts, including geologists and mining engineers will arrive in the country to start the operations.

"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," Alrosa CEO Sergey Ivanov said in an interview with Reuters.

That would mean a stake of at least 51 percent, he said, adding that he would be confident of achieving that if it gets to the stage of detailed discussions on how to advance a project.

Russia, along with China, has been a political ally of Zimbabwe since the days of the liberation war against British rule, and this year Zimbabwe selected Alrosa and China's Anjin Investments to partner its state diamond company.

Anjin's had been operating in Chiadzwa together with other companies including Mbada and Marange Resources before the 2016 order which gave effect to a complete shutdown of all mining operations at the Chiadzwa fields.

These operations were stopped as government reviewed the mining activities amid allegations of corruption and externalisation of funds, upon which government went on to consolidate operations under the ZCDC, which is majority owned by the government of Zimbabwe.

Such volatility in policy and protection of property rights have scared many investors which considers Zimbabwe as offering less policy clarity especially in mining. This has led to low foreign direct investment in the economy despite a rich mineral endowment.

Alrosa, the biggest diamond producer by volume, as well as Anglo American's De Beers, the biggest in value terms, both anticipate supply will shrink in the coming years.

The company is expanding into Africa, where Zimbabwe and Angola remain under-explored. In its 2018 financial year, Alrosa said sales of higher-quality stones and an increased average price drove a spike in its profit and revenue.

The company’s diamond sales jumped 12 percent to RUB 278 billion ($4.29 billion), despite a 12 percent decrease in sales volume to 26.4 million carats. The decline in carats sold was offset by a 21 percent surge in the average price for gem-quality diamonds to $164 per carat. Alrosa derived its remaining revenue from transportation, gas and social infrastructure.

Alrosa started conducting geological exploration in Zimbabwe in 2013 but dropped the licences it held there in 2016 due to a reform of the country’s diamond industry.

The government is considering waiving a rule that has prevented foreign investors from holding controlling stakes in its diamond mines, as it targets production of 12 million carats by 2023, up from 3.5 million carats last year.

Despite the country’s diamond riches, no major producers are operating. Rio Tinto Group sold its stake in a project in 2015 and gem giant De Beers quit the country more than a decade ago.

Zimbabwe’s diamond production has tumbled in recent years as easy pickings at the once vast Marange diamond fields have been exhausted. Output is down almost 75 percent in the past five years.

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