Botswana Diamonds (LON:BOD) is expanding its operations from its base country to neighbouring Zimbabwe by teaming up with Vast Resources (LON:VAST) to jointly explore for diamonds in that country.
The memorandum of understanding signed Tuesday sees the two companies exchanging past exploration information on areas prospective for diamonds in Zimbabwe. It also says the parties will set up a jointly-owned special purpose vehicle to develop and exploit diamond resources.
Vast acquired a database related to diamonds in Zimbabwe back in 2008. It has also, until 2010, carried out its own exploration in the field using information from the database.
The two firms have agreed to exchange past exploration information on areas prospective for diamonds in Zimbabwe and form a jointly-owned unit focused on developing and mining diamond resources.
Botswana Diamonds, in turn, has independently acquired a Zimbabwe diamond database and has expertise in exploration, development and mining of precious stones. In particular, it has access to technology relating to extracting diamonds from hard rock.
The Southern African nation has “excellent” diamond potential, Botswana Diamonds chairman John Teeling said in a statement.
Vast CEO Andrew Prelea said in a separate release that the new Zimbabwe government's desire to open the country up for business triggered the deal with Botswana Diamonds. He added his company believed it was the right time to use its industry knowledge to bring value for stakeholders by developing new resources.
Prelea was referring to Zimbabwe’s decision, announced in March, to relax its ownership laws requiring companies to sell or transfer 51% equity to black citizens, particularly in the platinum and diamond sectors.
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