The first ever sale of mining output by the Chinese-owned Anjin mine in Marange is taking place between December 2-5, 2011, in Harare, Zimbabwe. The Anjin mine has been operational since mid-2010 and, despite making huge investments, has, so far, never sold its production as it has been waiting for KPCS-compliance approval. The Kimberley Process Monitors have verified that all goods mined to date are actually held in stock. The mine's KPCS approval was given on November 17, 2011.
The auction that is organized by the Minerals Marketing Corporation of Zimbabwe (MMCZ) and is taking place at Anjin's premises is for 500,000 carats -- and the timing is just on the eve of the DTC sight. According to an Anjin spokesman, the average size of the stones that will be auctioned is 4 carats. The larger stones have not been excluded -- and the auction features a 30.45-carat gem-quality stone.
The Anjin run-of-mine production is typical for Marange mines. Some 8%-10% is gem quality, 45%-46% is near gem (Indian goods), with the remaining 45%-46% consisting of industrial qualities (boart). In terms of sizes, the bulk of the production is estimated to be in the 3.5-6.0-carat range.
The current tender is "by invitation only" because of the limited time span available for viewing the goods, though last-minute applications might still be considered. The invited parties include all those companies who have applied for manufacturing licenses in Zimbabwe and, of course, foreign rough buyers.
It is my understanding that only some 14 bidders have been invited. They will bid for 39 separate parcels. The rough has been cleaned and, apparently, has been professionally sorted - and is not "run-of-mine." A policy decision has been made that not a single buyer can purchase more than 30% of all the goods offered (by value).
Anjin is not impacted by historical reputational problems. Well before commencing its sales, it has built schools for the youngsters living in the mining area; it has built a clinic; and it has brought in Chinese doctors who treat patients free of charge. But - most significantly - it has allocated some $100 million for social responsibility programs that include the building of homes, roads and other infrastructure. A large part of that program has already materialized.
The total value of the goods up for sale is not known, as the 500,000 carats may not represent "typical run of mine." It may run between $20-$30 million. For those not invited to the present auction, I was told that "it is not impossible that another auction will be held in January 2012." As the company should have several million carats in inventory, the timing of the first few sales are pure marketing decisions and not dependent on current output.
Anjin is believed to be able to produce between about 500,000 carats per month - and probably even more - at full capacity. Its output is larger than that of the Mbada and Canadile mines, though the average size of the other mines is apparently larger. This depends on the geographic location of the mine in the Marange area.
The company is aware of the visa problems faced by some Indian buyers who received the invitation "at the last moment" - and it is making all efforts to assist and accommodate these visitors.