Zimbabwe’s diamond beneficiation sector struggles

By Kenneth Matimaire

Only
eight out of the 28 diamond cutting and polishing firms licensed at the peak of
Zimbabwe’s diamond boom are still in active operation.

A
total of 17 firms were licensed in 2008 to strengthen the
lucrative sector. The number grew to 28 by 2014 at the height of the sector but
out of these, 12 firms still remain and only eight are actively operational.

There
is Aurex Diamonds, BCE Diamonds, Chess Diamonds, Akim Investment, Kenako
Diamonds among others.

Industry
experts cite the capital intensive nature of operations and lack of access to
credit lines as hampering the operations of the diamond firms.

The
Zimbabwe Consolidated Diamond Company (ZCDC), the country’s largest diamond
company, has so far struggled to have its 24,000 carats absorbed by the local
firms.

Morris
Mpofu, the ZCDC chief executive this week said the law required that local
firms be allocated 10 percent of diamond production for cutting and polishing.

“A
local tender was conducted, 24,736 carats were on offer to local cutting and
polishing companies. While eight companies out of the 12 licensed viewed the
product, only five participated in the tender. The Minerals Marketing Company
of Zimbabwe (MMCZ) is currently analyzing the bids and the results will be
communicated to the participating companies soon,” he said.

Mpofu
said cutting and polishing players lack the financial muscle to industry fully
absorb the government threshold.

“We
have observed that due to the obtaining economic challenges, despite making
available 10 percent of its diamond production to local cutting and polishing
companies, the local industry lacks the financial capacity to absorb this
allocation. In an effort to capacitate downstream industries in the diamond
value chain, we will be entering into toll manufacturing agreements with local
cutting and polishing companies. In this regard, ZCDC will avail rough diamonds
to eligible companies, to cut and polish diamonds under contract arrangements,”
he said.

MMCZ
board chairperson David Murangari and the Zimbabwe Diamond Mining Diamond
Company (ZMDC) board chair Peter Chimboza said ZCDC was better positioned to
comment on issues to do with diamond beneficiation.

ZCDC
is expected to increase its annual production to 3 million by year end with 10
percent of the annual production allocated to local cutting and polishing
companies.

While
the local diamond industry is at its lowest ebb, the President Emmerson
Mnangagwa has pronounced plans to increase the 10 percent threshold.

“The
quota will be reviewed as the cutting and polishing industry grows,” said Mines
Minister, Winston Chitando.

ZCDC
has been urged to expedite the construction of the Mutare Diamond Cutting and
Polishing Centre.