Zimbabwe’s diamond industry is facing its biggest crisis in years, caught between falling prices and the rise of lab-grown diamonds abroad, and the impact of years of underinvestment and mismanagement at home.
The numbers tell the story. In April, diamond export receipts spiked to US$33.5 million, up 912% from US$3.66 million in March. But this big jump is not a recovery, but a blip largely due to the sale of a delayed parcel. Strip that away, and the outlook for the year is grim. Diamond earnings for 2024 fell 46%, from US$303 million to US$163.76 million.
Now the pain is hitting jobs. Global rough diamond prices are down 74% since 2020. The country’s biggest diamond producer, the Zimbabwe Consolidated Diamond Company (ZCDC), is laying off 400 workers, citing a collapse in prices. A ZCDC spokesperson told the Zimbabwe Independent: “Diamond prices have gone down on the market. The company had to choose between closing and maintaining operations at a reduced rate whilst awaiting price recovery.”
ZCDC is not alone. Murowa Diamonds, owned by RioZim, is also in crisis. In 2020, RioZim had announced a US$52 million expansion to extend Murowa’s life – then down to just a year – by four years, and a second US$400 million phase to build Zimbabwe’s biggest underground diamond mine.
Five years on, the reality is different. Workers have frequently gone on strike over unpaid wages, while plans to scale up have stalled. In 2024, production at Murowa dropped 13%, to 359,000 carats from 414,000 carats in 2023. Much of the mine’s equipment has now been abandoned due to age and breakdowns.
“The current fleet has passed its economic life,” RioZim says. “The low plant performance resulted in the Mine decommissioning all its heavy mobile equipment during the year, as it became unsustainable to run due to persistent breakdowns.”
The problems at home come at the worst time; the global diamond industry is facing massive disruption. The biggest threat? Lab-grown diamonds (LGDs) are now eating into the market share of mined gems. In the US, the world’s biggest diamond market, synthetics now make up 50% of engagement ring sales. Brands like Switzerland’s LOEV and Israel’s AmMil are appealing to younger buyers, winning them over with eco-friendly and ethical public relations selling points.
Lab-grown diamonds sell at discounts of up to 80% and are cheaper to produce. They don’t come with the baggage of conflict minerals, and many are made using renewable energy. LOVE uses 90% renewables in production. In 2021, global jewellery giant Pandora dropped natural diamonds altogether, a sign of where consumer sentiment is heading. India, the world’s top diamond polishing hub, is also struggling. Stocks are high, demand is weak, and prices are sliding. Botswana, the world’s biggest diamond producer, is feeling the pinch as the economy slows.
For Zimbabwe, the structural problems run deep, making it worse for local producers. Most of the country’s diamonds are exported in raw form, meaning the country captures just 20% of the full value. Beneficiation efforts have stalled, as projects like the Manicaland Gemology Centre remain unfinished. Government policy hasn’t helped. A 10% royalty structure has been a turn-off for investors. Russian giant Alrosa, the world’s biggest diamond producer, has been hesitant about fully committing to its Zimbabwe plans.
The global LGD market is projected to grow at 15% annually, far outpacing traditional diamond sales. For already badly run Zimbabwe mines, the outlook is not so shiny. – (NewZWire)
