The Zimbabwean government is set to sign a three-year diamond for fuel deal worth about $1.4 billion with Russia’s diamond producer and a Swiss firm, according to local media reports.
The southern African country is experiencing intermittent fuel supplies.
Unnamed sources cited by Business Times said the deal is set to be inked this week.
Alrosa will receive diamonds from the state-owned Zimbabwe Consolidated Diamond Company (ZCDC) every month with an estimated value of $40m, insiders said.
“The deal is expected to come into effect in 2020 and the diesel supplies will run for a period of three years,” the source said.
Harare is said to be concluding a sale purchase contract with a Swiss firm, Tatneft, which will provide diesel in exchange for diamonds from the ZCDC.
“Due to fluctuations on the global market, Tafneft will have the liberty to reduce the value of the diamonds by 30%,” said the source. “The diesel will be supplied via the Port of Beira. Under this arrangement, Tatneft is expected to deliver high quality diesel 50 ppm [parts per million].”
Meanwhile, Alrosa's spokesperson said that this information has nothing to do with reality and the company has no relation to the activity described in the published article.
Alrosa has already partnered with ZCDC for diamond exploration and mining. However, it will only start mining if it takes a majority stake in any project.
Zimbabwe is planning to more than triple its diamond output to 11 million carats by 2023 from 3.2 million carats last year.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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