Zimbabwe earns $114mln from diamonds

ZIMBABWEAN mining companies earned US$114 million in diamond exports during the 11 months to November 2020, latest official data shows.
According to national statistics agency Zimstat, diamond earnings for 2020 were 1,72 percent lower from $116 million recorded in 2019. This comes after the global economy was negatively impacted by the Covid-19 pandemic, and some diamond mining companies had to cancel international diamond tenders since the introduction of worldwide travel restrictions imposed to curb the spread of the pandemic.

Owing to the market disruptions caused by Covid-19, most producers suspended sales with the biggest players, Alrosa and De Beers, allowing their sight holders to defer purchases.
It is estimated that on average global diamond prices dropped by 30 percent last year due to reduced global demand. Diamond exports reached a low of $261,739 in May and picked up in June at $18,14 million.

The southern African country currently has five diamond mining firms — the Zimbabwe Consolidated Diamond Corporation (ZCDC), Vast Resources, RioZim’s Murowa Diamonds, Russia’s Alrosa and China’s Anjin Investments. The government expects to increase diamond production to 11 million carats by 2023 from 3,2 million carats in 2018 as part of an ambitious plan to raise mining output and earn the country $12 billion a year.

In July, Alrosa said it had commenced prospecting and preliminary exploration works for primary diamond deposits in the country.  After extensive resource definition and quantification works, Alrosa revealed a rare and high value species of diamonds at the Malipati Diamond Project in Matabeleland South. London-listed Vast Resources signed a joint venture with Botswana Diamonds and said it sees real potential in Zimbabwe as an investment destination, despite the country’s political and economic troubles.

Murowa Diamonds recorded a two percent decrease in production during the three months ended September 30, 2020 attributable to processing ore from K1 pits which are of low grade.
ZCDC had anticipated diamond trading markets to be fully operational in the last quarter of 2020 after manufacturing and trading markets in India, Antwerp, Hong Kong, Dubai, Israel, and the United States closed thereby cutting off trade, while manufacturers in India deliberately effected a self-induced import ban on rough diamonds for over a month.

The mineral-rich southern African nation sees the mining sector as the main driver for reviving its ailing economy.  According to the Chamber of Mines, diamond output is expected to increase by 19 percent to 2,5 million carats in 2021 compared to 2,1 million carats produced last year. Diamond producers say that royalty for diamond miners at 10 percent is still one of the highest in the world and is undermining the viability of producers. Producers expect the government to reduce the royalty in line with best practice.
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