HARARE – Diamond production in Zimbabwe fell 6 percent in the first quarter after government took possession of all diamond operations ostensibly because previous miners had robbed the country of its wealth.
During the first quarter of 2017, total diamond output stood at 567 024 carats, 6 percent lower than 603 590 carats produced in the comparable period of 2016.
The latest figures reveal a dramatic slump in production in Zimbabwe, which was the eighth largest diamond producer in the world with 4,7 million carats in 2014, according to industry group Kimberly Process.
“The decline in diamond production is attributable to the transitional challenges involving the consolidation of former diamond companies into one State company, the Zimbabwe Consolidated Diamond Company (ZCDC), since February 2016,” Finance minister Patrick Chinamasa said in the latest Quarterly Treasury Bulletin.
This comes after the Mines ministry ordered diamond mining firms to halt operations in February last year and leave the Marange fields as their licences had expired.
The diamond fields in the east of Zimbabwe near Mozambique were mined by nine firms.
Eight, including two Chinese-run companies, were joint ventures 50 percent owned by the government and the other one was wholly owned by the State.
The State-owned ZCDC now holds all the diamond claims in the country.
“In 2017, diamond production is projected at 1,9 million carats underpinned by envisaged successful capitalisation and full production at ZCDC,” Chinamasa said.
“Government is already working on addressing challenges related to legal wrangles and capitalisation of ZCDC.”
The largest diamond mining firm booted out of Marange, Mbada Diamonds, has dragged government to the High Court over its eviction and has been given the green light to take control of its mining assets but has been stonewalled.
Chinese-run Anjin Investments also challenged the government ban at the same court.
One of the firms extracting gems in Marange, Jinan has already wound up its operations — pulling its $4 million equipment from the area in April.
ZCDC took delivery of $30 million worth of equipment from Belarus last week to enable it to process kimberlite diamonds.
The equipment was acquired under a local facility arranged by the Reserve Bank of Zimbabwe and is earmarked for upgrading and redesigning mining operations.
Chinamasa said “secured equipment, to the tune of $30 million, is expected to support higher throughput”.
Prior to the government takeover of diamond firms, President Robert Mugabe had told Chinese President Xi Xinping during his visit to Zimbabwe in December 2015 that his government was not getting much from Chinese-owned diamond mining firms.
He also told State TV during his traditional birthday interview last year that the country had lost an estimated $15 billion to leakages in the sector.
“Companies that have been mining diamonds have robbed us of our wealth, that is why we have now said the state must have a monopoly,” Mugabe said.
“The State will now own all the diamonds in the country.”
But the ZCDC, which was formed last year after government expelled all diamond miners in Marange, has failed to deliver.