Online Reporter
Herald Reporter
State-owned diamond miner, Zimbabwe Consolidated Diamond Company (ZCDC), has weathered the storm after experiencing a turbulent trading environment for the last six months, marked by depressed diamond prices and, most recently, geopolitical tensions in the Middle East.
The influx of lab-grown diamonds has affected demand for natural diamonds, leading to softening prices of the precious stones.
Official figures show that in 2024, international diamond prices averaged US$25,15 per carat compared to US$28,84 in 2023 and a peak of US$74 in 2018.
The volatility in global diamond markets and shifting domestic conditions has not only affected local diamond miners but has also had ripple effects across the globe, characterised by mine closures and downscaling of operations by major producers.
ZCDC, which is under Zimbabwe’s sovereign wealth fund, Mutapa Investment Fund (MIF), has not been spared from the disruptive developments on a global scale.
Last year, the company embarked on a staff rationalisation exercise aimed at aligning operational costs with market conditions.
In a statement, a ZCDC spokesperson said the diamond mining value chain has, over the past four years, been facing headwinds mainly due to several factors, which include geopolitical tensions, declining prices and shifting consumer habits.
“The diamond value chain has experienced unprecedented challenges in recent times. Diamond miners are now faced with the stark reality that ‘the diamonds are forever’ slogan is no more,” said the spokesperson.
“The company is now engaged in serious engagements with all relevant stakeholders to keep the business running. ZCDC is now the only diamond mine operating as Anjin is under care maintenance while Murowa has downscaled operations. As you may be aware, we conduct auctions of rough diamonds on both the local and international markets.
“Under our current marketing arrangements, foreign sales are conducted in Dubai, but unfortunately, geopolitical tensions in the Middle East have resulted in some instability in Dubai that has affected scheduled sales.
“This setback has had serious ripple effects on the business, but both the management and board are engaged and a recent successful sale will release necessary cash flows for continuing operations. The company will continue to explore avenues to grow the business and maximise shareholder value.”
Lab-grown diamonds remain the biggest threat to the business and only cost efficiencies and a move to kimberlites will be key to the survival of the business in the face of the obtaining market challenges, specifically targeting the lower end of the market goods.
Large, high-quality natural diamonds remain rare and in demand, hence ZCDC’s kimberlite exploration target.
The unfavourable operating environment has seen some local diamond miners, such as RioZim-owned Murowa Diamond and Anjin, closing shop.
This, coupled with the closure of big mines across the globe, might see a supply shortage-led recovery in prices in the medium term.
