ZCDC planned auctions in limbo as diamond market tumbles

THE massive fall of diamond prices has put paid to Zimbabwe Consolidated Diamond Company (ZCDC)’s plans to carry out an international diamond auction, Zim Morning Post has learnt.

ZCDC last year said it plans gem auctions outside the country, including in Asian cities, to widen marketing options.

However, industry sources told this publication that the diamond market fell to 30% in the fourth quarter of 2019 amid reports that other players such as the world’s largest diamond producer, De Beers, are promoting the sale of synthetic diamonds.

Synthetic diamonds are laboratory manufactured diamonds which have the same features as the original diamonds such as chemical composition but the only difference with the original is the place of origin.

“The market tumbled because of the synthetic diamonds which are cheaper,” a source said

The fall in prices has left many concerned about the sustainability of their operations, with some players concerned about their survival.

A source said ZCDC has this year projected to produce 6 million carats as it awaits for the full operationalisation of its joint venture (JV) with Alrosa. At the peak of production in 2012, Zimbabwe’s output was 12 million carats.

ALROSA established an affiliate company ALROSA (Zimbabwe) Limited in December 2018. In July 2019, ALROSA and ZCDC signed a memorandum of agreement to transform it into a JV for prospecting, exploration and, in case of success, mining of primary diamond deposits in Zimbabwe.

Sources said Alrosa, which holds 70% stake in the JV where ZCDC has a shareholding of 30% is investing between $12 to $15 million worth of equipment as its initial capital.