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.