Herald Reporter
THE diamond industry is appealing for a review of mining royalties, warning that the current tax regime is worsening operational pressures and threatening producer viability amid a prolonged global market downturn.
The Chamber of Mines of Zimbabwe (CoMZ) has urged Government to lower diamond royalties from the current flat rate of 5 percent—which sits slightly above the regional average—to 2 percent, or adopt a price-linked structure until market conditions improve.
The appeal comes ahead of Finance Minister Professor Mthuli Ncube’s 2027 National Budget presentation on November 19.
Currently, only the state-owned Zimbabwe Consolidated Diamond Company (ZCDC) remains active after Chinese-owned Anjin and RioZim’s Murowa suspended operations due to operational challenges.
Speaking at the Ministry of Mines and Mining Development Strategic Planning Workshop in Kadoma recently, CoMZ chief executive Mr Isaac Kwesu said the royalty burden has become unsustainable.
“They (diamond producers) have said that this (royalties) is a major cost that they are facing, they will be able to survive some way, somehow until the tide turns,” said Mr Kwesu.
“They are requesting support, specifically saying a 2 percent royalty may be better for them. Otherwise, they would prefer, maybe not to pay a lot all at this juncture.”
The sector’s struggles stem from depressed international prices, rising competition from laboratory-grown diamonds, and geopolitical tensions affecting major trading markets.
CoMZ argues that a flexible fiscal regime, similar to the three-tier, price-sensitive royalty system introduced for gold producers earlier this year, would keep diamond mines viable during downturns while allowing Treasury to capture revenue when prices rebound.
The downturn has already forced deep cuts across the sector.
Last year, ZCDC retrenched nearly 500 workers and implemented strict cost-containment and value-addition measures to stay afloat, though industry players warn such internal steps are insufficient without fiscal relief.
