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NewsDay

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African Consolidated seeks gold in lieu of diamond goal

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AFRICAN Consolidated Resources Plc is focusing on a Zimbabwe gold project.

AFRICAN Consolidated Resources Plc is focusing on a Zimbabwe gold project as it isn’t the right time for “engaging” with the State over the decision to strip the company of the multibillion-dollar Marange diamond field.

Bloomberg

“Marange is water under the bridge,” said chief executive officer Craig Hutton. “Marange has been a problem and a disappointment for us, but we haven’t lost the company. I do believe that we will come to an amicable resolution.”

Zimbabwe seized the diamond fields, discovered by De Beers, from UK-based African Consolidated in 2006. The Marange diamonds are being dug by China’s Anjin Mining with Mbada Mining (Pvt) Ltd, which is closely held by South African and Zimbabwean investors. All companies in the area operate 50-50 ventures with State-run Zimbabwe Mining Development Corporation.

“We certainly want to, at some point in time, engage with the government and come to an amicable resolution,” Hutton said in an interview in London.

“We don’t think the time right now is appropriate to be engaging on Marange. We will focus our efforts on our other core assets where we can deliver value.”

African Consolidated is developing the Pickstone-Peerless Gold Mine. The project, scheduled to begin output in the first quarter, will produce 15 000 to 20 000 ounces of gold before growing to as much as an annual 80 000 ounces two years later.

It’s “our cornerstone project, our company maker”, said Hutton. “I don’t think the political situation is something that is not manageable. That’s why we’re still there.”

The US, European Union, Australia and New Zealand don’t allow individuals or companies to trade with designated members of President Robert Mugabe’s Zanu PF party, or businesses associated with the party.

Western nations cite human rights abuses, including the killing of gem diggers at Marange, as the reason for targeted sanctions.

The country earned $1,2 billion from the sale of Marange diamonds over three years, the State media reported in December.

Ontario-based rights group Partnership Africa Canada, says Zanu PF has looted about $2 billion from the fields. The country can produce 8% to 10% of the world’s rough diamonds since its eastern Marange fields were found, Chaim Even-Zohar, chairman of consultant Tacy Ltd, said in November.

African Consolidated also has nickel projects in Zimbabwe, as well as copper and rare-earth deposits in Zambia.