Zimbabwe’s diamond output from its major mines in the eastern part of the country has fallen to shocking levels from 12million carats a year during the peak to just less than a 1million carats a year amid reports that the government-owned Zimbabwe Consolidated Mining Development Company ZMDC is struggling to meet targets after taking over from private players early this year.
In addition to failure by the company to meet targets, it has also emerged that the diamond alluvial deposits were now exhausted, with the company now exploring ways to start underground mining of the product to boost production.
The government took over the production of the precious stones from private players after accusing private companies of pillaging resources and consequently remitting too little to treasury.
Despite having secured mining equipment from Belarus, the ZMDC, the sole miner of diamonds at Marange diamond fields, is struggling to increase production to desired results.
ZMDC chief executive officer Mr Morris Mpofu conceded that production levels had slumped to shocking levels.
However, he said that production is set to increase during the last quarter of this year when the company will explore underground mining.
“We have secured mining equipment and I think during the last quarter of this year we will pursue underground mining since alluvial deposits are exhausted,” said Mpofu.
According to a report produced by the ministry of Mines and Mining Development on the production of diamonds in the country, Zimbabwe is now producing about 950 000 carats of diamonds compared to 12 million carats during the peak.
“During the peak period in 2012 the country was producing more than 12million carats of diamonds per year,” read the report.
“To date the country is producing about 950 000 carats of diamonds which is far less than what we expect from the industry,”added the report.
In 2015, 2.3 million carats were produced with the figure going down to 985 000 carats last year.
This year the country had projected to produce 2.2 million carats of diamonds, but so far less than 500 000 carats have been produced.
Mines and Mining Development minister Walter Chidhakwa said the slump in production was shocking, hence the need to revisit the production chain.
“We need to revisit the whole production chain and see where we are going wrong,” said Chidhakwa.
“We, however, remain optimistic that production will rise to desired levels given the fact that we have bought new mining machinery,” said Chidhakwa.
“In addition to the purchase of new mining equipment, we feel the underground project, which the company wants to pursue, will yield the desired results.”
Before the government ejected private players from Chiadzwa mines, Finance Minister Patrick Chinamasa described the diamond sector as “virtually dead”.
Chinamasa said the sector was not contributing meaningful amounts of money to Treasury, triggering the state to take the sole responsibility of mining the product in eastern Zimbabwe.
The past two years had been action-packed in Zimbabwe’s diamond mining sector as seven companies were evicted from Chiadzwa mines and the ZMDC took over.
The companies unsuccessfully mounted several court challenges protesting against their ejection from mining diamonds.
The government, through the ZMDC, initially confiscated mining equipment from the affected companies but later released it after court challenges.
Chiadzwa diamond mines have been a hotbed since 2006 when alluvial diamonds were discovered in the area.
A police and army operation in 2008 saw at least 200 people being killed. This sparked outrage from human rights activists and international diamond miners who accused authorities of gross human rights abuse during diamond mining. The Kimberley Process Certification Scheme established in 2003 also objected to the sale of Zimbabwean diamonds on the international market, calling them blood diamonds.
The Kimberley Process Certification Scheme was established to prevent conflict diamonds from entering the main stream rough diamond market.
President Robert Mugabe said two years ago at least $15billion in diamond proceeds could not be accounted for, triggering panic and uncertainty within the diamond mining sector.
However, despite a shocking slump in production levels, Zimbabwean authorities still feel that the country could rack in $30bn annually from diamond sales.
“Our aim when we ejected companies from mining diamonds at Chiadzwa was to ensure that every cent from the sector is accounted for,” Chidhakwa said.
Chidhakwa said since February this year no auction had been conducted and therefore the southern African country was just stockpiling diamonds.
Chidhakwa said there were still huge diamond deposits in eastern Zimbabwe.