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Harare - Zimbabwe's Consolidated Diamond Company (ZCDC) and the country’s state-controlled coal miner, Hwange Colliery, have raised production in the first half of the current year and it is expected that this will drive the mining sector to a 5.1 percent growth this year amid demands for more revenue from the industry by the government.

All alluvial diamond mining companies in the Chiadzwa area have been merged under the ZCDC, with the state now owning half of the shares in the consolidated company.

There was earlier resistance by Zimbabwean diamond mining companies to the consolidation process and this had stalled gem mining in the country.

However, Finance Minister Patrick Chinamasa said the consolidation process had enabled greater transparency in diamond mining and the ZCDC had now moved to full start operations, with output for the first half of 2017 going up to 1.1 million carats.

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The other diamond operations in Zimbabwe include Murowa, from which Rio Tinto has since exited after disposing of its interests to its former partner in the operation, Rio Zim.

“With the capitalisation of the ZCDC, diamond output during the first half of 2017 was 1.1million carats against 690000 carats produced during the previous year,” Chinamasa said last week.

The government has previously said that it has taken over all earnings from diamond mining in the country.

In the period January to May 12, 2017, Zimbabwe’s earnings from diamonds plunged to $27 million (R348.32m), compared with $51m in the previous contrasting period, according to figures provided by the Zimbabwe chamber of mines.

Platinum export earnings by South African platinum mining groups such as Anglo Platinum, Impala Platinum and Sibanye Resources, which have units operating in Zimbabwe surged to $333.5m, significantly up from the $282m recorded for the same period in 2016.

Chinamasa said the mining sector was expected to grow by 5.1percent and help propel Zimbabwe’s gross domestic product growth to 3.7 percent this year.

The growth in mining is expected to come from increased output by gold, platinum, chrome, coal and nickel companies

“The ongoing reforms in diamonds and the coal industry are already seeing the turn-around of these sub-sectors, providing impetus for higher growth of mining,” said Chinamasa.

Zimbabwe has taken measures to turn around the fortunes of Hwange Colliery, which has been suffering from debts and from poor equipment availability.

Makomo Resources, another private coal miner in Zimbabwe, has also contributed significantly to coal mining output in the country.

As a result, “coal output is also on the increase following implementation of turnaround strategies” at Hwange Colliery. Production from Hwange has jumped from 30 000 tons to 150 000 tons per month.

Although mining companies have been raising production, the chamber of mines of Zimbabwe says mining companies are battling against delayed payments for imported equipment and other raw materials. The government is also demanding that they contribute more to state coffers that are starved of revenue flows.

BUSINESS REPORT ONLINE