Zimbabwe’s largest diamond miner has begun retrenching some 400 workers as the industry takes a hit from tough domestic foreign currency policies and reduced demand amid global trade wars.
State-owned Zimbabwe Consolidated Diamond Company (ZCDC) has told employees that the massive job cuts are necessary for the firm to survive the turbulence.
The company employs around 1,800 people, and executives say they have to choose between shutting down or maintaining them at a reduced rate and wait for diamond prices to recover on the global market.
Plummeting demand for diamonds in markets like the United States and China, due to the growing popularity of lab-grown gems globally, has left Zimbabwe’s diamond industry in a tailspin.
A senior ZCDC official said the job cuts were inevitable as the diamond producer was struggling to stay afloat.“Diamond prices have gone down on the market,” the official said. “The company had to choose between closing and maintaining operations at a reduced rate whilst awaiting price recovery.”Zimbabwe’s other diamond producers, Anjin Investments and RioZim, are also struggling. Five years ago, RioZim announced a $400 million plan to build Zimbabwe’s biggest underground diamond mine. However, the company is now struggling to pay its workers. Its diamond output declined by 47 percent last year due to equipment unavailability and persistent breakdowns, its latest financial results show.
The company’s heavy mobile equipment was decommissioned and the operation shifted to hired equipment, with production reducing 13 percent to 359,000 carats from 414,000 carats the previous year.“The current fleet has passed its economic life,” RioZim said, referring to equipment at its Murowa Diamonds operations. “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.”20 percent valueGlobally, the prices of round diamonds have fallen by 74 percent since 2020. The decline has been blamed on lab-grown diamonds that sell at discounted prices of up to 80 percent because they are much cheaper to produce.
Zimbabwean producers have to contend with even deeper structural problems, including the fact that most of the country’s diamonds are exported in their raw form. This means that the country only gets 20 percent of the full value of the gemstones.
The government’s 10 percent royalty structure has also discouraged investors from putting their money into the sector with the world’s largest diamond, Alrosa of Russia, putting on hold plans to invest in Zimbabwe because of the Harare policies.
Job losses became pronounced across Zimbabwe’s mining sector last year with mines shedding 1,216 employees, a huge jump from the 294 layoffs recorded in 2023.
Justine Chinhema, Zimbabwe Diamond and Allied Minerals Workers Union general secretary, said the crisis in the sector was made worsen by illicit trade and unfair labour practices.“Our members, hardworking mine workers in the diamond sector, are suffering amid a wave of layoffs, unpaid wages, and deteriorating labour standards and working conditions at the country’s three diamond mining companies, the ZCDC, Anjin Investments and Murowa Diamonds,” Mr Chinhema said.
He said the retrenchments had spawned concerns about lack of transparency and unfair labour practices.“As a union, we condemn any forced or unfair retrenchment processes that violate workers’ rights and dignity,” Mr Chinhema added.“Recently, workers at Anjin Investments gathered at the management offices, demanding months of unpaid salaries and urgent answers regarding fair labour practices. This blatant neglect of workers’ rights is unacceptable and demands immediate intervention. This desperate act highlights the severe hardships faced by workers who have been deprived of their due compensation, further deepening the crisis in the sector.”Anjin Investments is a joint venture between Chinese investors and Zimbabwe’s military. It was one of the companies that were forced to cease operations by the late Robert Mugabe in 2016 after he claimed that diamonds worth $15 billion had disappeared without a trace.
Anjin was allowed to resume operations after a coup that toppled the long-time ruler a year later.
The Chamber of Mines of Zimbabwe (CoMZ) blamed the job losses on frequent power cuts and foreign currency shortages, which are crippling miners.
In its 2025 Quarter 1 report, CoMZ said the problems in Zimbabwe’s mining sector were still persisting this year.“Mineral production in the first quarter of 2025 declined across most key minerals compared to the same quarter last year, with significant drops in lithium (-60 percent), diamonds (-45 percent), nickel (-23 percent), chrome (-21 percent), platinum (-16 percent), palladium (-17 percent and rhodium (-10 percent),” the CoMZ report said.“The subdued performance was driven by operational challenges (foreign capital shortfalls, high-cost structure and capital constraints), market volatility, and reduced global demand amidst global trade wars.”In 2024, Zimbabwe’s mining industry contributed 70 percent to foreign direct investment inflows and 80 percent to exports.
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