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Mystery over diamond stockpile

By Business Reporter – Wednesday 23 June 2020

HARARE (Mining Index) – A CONSIDERABLE amount of diamond stockpile is suspected to be held at the Minerals Marketing Corporation of Zimbabwe (MMCZ), but the institution has denied having any stockpile of the precious stone.

The 500 000 carats that was scheduled to be auctioned in December 2019 with an estimated value of US$3 million and the 2020 ZCDC production from January to date has potential to generate the country revenue for economic development.

Diamonds produced by the Zimbabwe Consolidate Diamond Company (ZCDC) are marketed and sold by MMCZ through an auction sale.

Sources within MMCZ revealed a diamond stockpile from ZCDC is being held at MMCZ which is not keen to sell diamonds to the local market.

“We have the diamonds at MMCZ from the ZCDC stock pile. They (MMCZ) are not keen to sell locally at low prices at the domestic market,” said a source within MMCZ.

Most Zimbabwean diamonds have over the years been sold to international buyers, with few gems reserved for the local market.

However, MMCZ general manager, Tongai Muzenda dismissed allegations of a diamond stockpile at his institution.

           Tongai Muzenda – MMCZ General Manager

“It is illegal to stockpile minerals and or metals without a valid reason. MMCZ/ZCDC is not holding any stock which we are not keen sell. We conduct tenders as and when we have reasonable amounts to sell,”

Muzenda however confirmed the last diamond auction sale that was scheduled for December 2019 to dispose a 500 000 carat stock as announced in September 2019 was not conducted.

“No we did not (hold the diamond auction in December 2019).”

Asked to respond to the whereabouts of the 500 000 carat stockpile he announced in September 2019 would be auctioned at the 4th and last diamond auction for 2019 that was pencilled for December, Muzenda commented;

“When you run a tender, it does not mean everything will be sold. Whatever may be unsold will be pushed to the next sale.”

MMCZ had scheduled to hold the last diamond auction sale FY2019 in December 2019 to auction 500 000 carats of diamonds with an estimated value of US$3 million.

State media, including The Herald of 25 September 2019, reported on the impending auction to dispose the half a million carats of diamonds in a story headlined ‘Zim to sell 500 000 diamond carats’ saying ‘The Minerals Marketing Corporation of Zimbabwe (MMCZ) says it will conduct another diamond auction before the end of the year targeting to sell between 400 000 and 500 000 carats.’

The Herald quoted Muzenda saying;

“We are looking forward to conducting another diamond auction where we are targeting to sell between 400 000 and 500 000 carats by the end of November.”

No diamond auction sale has been conducted FY2020. MMCZ held the last diamond auction from September 9th to September 13th 2019 which traded 310 000 carats produced by ZCDC.

Despite the COVID-19 lockdown ZCDC continued diamond production in Chiadzwa.

“ZCDC continued diamond mining operations in Marange although it scaled down its operations following the effective date of the Lockdown. However, it is understood that the company has decided to lock-down some workers on two weeks shifts so that they work within the mine before another shift comes in on a rotational basis,” revealed the second edition of the situation report published by Zimbabwe Environmental Lawyers Association (ZELA) in April 2020.

“ZCDC has been mining since beginning of year. I am sure by now, the past 6 months from January to June 2020 has generated them enough stockpile for auction. Add the 500 000 carats that were supposed to be auctioned in December 2019, that should be sufficient enough to hold a lucrative diamond auction,”

“If MMCZ say they have no stockpile, where are the 500 000 carats that were supposed to be auctioned last year in December? Where are the diamonds they have been mining since beginning of year? Surely, this must be investigated!” responded one diamond guru who refused to be named.

Every year, MMCZ conducts diamond auctions that attract companies from the global market.

The third diamond auction held in September 2019 attracted 25 companies from the international community including Belgium, Dubai, India, Israel and South Africa.

According to the National Diamond Policy of December 2018, a paltry 10 percent of diamonds is reserved for local value addition while private players can participate in value addition after cleaning and sorting upon obtaining the necessary approvals.

In 2018 ZCDC produced 2.8 million carats valued at US$49 million. ZCDC’s goal is to grow annual output to 10 million carats by 2025. ENDS//

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