ZCDC diamonds back on the market
STATE-OWNED diamond miner, Zimbabwe Consolidated Diamond Company (ZCDC)’s gems are back on the market after a seven-month hiatus.
The ZCDC has been on a massive production ramp up spearheaded by a new management team. Last year, for the first time, the diamond company declared a dividend to its sole shareholder, the government.
In an interview, ZCDC chief executive officer Mark Mabhudhu confirmed the development.
In 2020, ZCDC indicated that 11 local and international sales it had planned did not materialise due to Covid-19 restrictions, after battling government-sanctioned moratoriums. The miner had only managed to conduct four sales in 2019 out of the planned 10, a similar number to what it achieved the previous year when it first sold diamonds. ZCDC, which commenced operations in early 2016 did not conduct any sales that year and in 2017.
The former acting chief executive officer, Roberto De Pretto lamented interference from the Office of the President and Cabinet (OPC). However, the new ZCDC chief executive committed to keeping the highest standards in the diamond sector as the country is set to assume the Kimberley Process (KP) chairmanship in 2023.
Zimbabwe is the vice chair of the global Kimberley Process Certification Scheme (KPCS) organisation and chair of the African Diamond Producers Association (ADPA).
“We will assume the KP chairmanship during 2023. Tasked with this level of responsibility at country level, ZCDC and other diamond producers in Zimbabwe have got to go far and beyond in not only maintaining the high standards expected of such responsible roles, but to exceed them,” Mabhudhu said.
“So you will notice that we are very busy preparing for these fora which will occupy us during 2022 and 2023.”
The halting of sales of diamonds at the state-owned miner also coincided with the blacklisting of prominent diamond dealer Jamal Ahmed through an instruction to the Minerals and Marketing Corporation of Zimbabwe (MMCZ) by the presidium.
Ahmed, who was involved in a vicious fight with former First Lady Grace Mugabe over a US$1,5 million diamond ring, had become the sole diamond buyer at MMCZ, arrangement which raised serious concerns in government.
The situation triggered ZCDC to scout for its preferred buyers from India and Belgium.
A source said: “Jamal had taken control of the auction and such concerns have always been raised by ZCDC officials but MMCZ had its own ideas since they were the marketers of the product. It only took the intervention of the President’s Office for Jamal to leave the diamond auction,” the source said.
“ZCDC had to halt diamond sales as they went on a crusade of inviting credible buyers from different countries. The idea was to bring competition to the auction.”
Ahmed has always denied the allegations of favouritism by MMCZ top officials, arguing that he was a credible buyer who offered competitive bids.
There are allegations that ZCDC evaluators and MMCZ marketers were part of a syndicate that leaked diamond prices to prospective buyers, eliminating competition in diamond buying.
Last year, the ZCDC launched an internal investigation, which led to the dismissal of one senior employee (name withheld) accused of leaking prices to buyers.
The search for buyers by ZCDC, the independent learnt, has created friction with MMCZ top leadership, who say they have the mandate to market the diamonds.
In 2018, the government introduced online diamond sales – the Zimbabwe Electronic Diamond Trading System (ZEDTS) to promote transparency and the ease of doing business.
According to Mines minister Winston Chitando when the system was launched, the implementation of the ZEDTS was supposed to “augur well for future diamond sales and supported the ease of doing business mantra”.
The system, he said, was also meant to ensure the sale of diamonds through the MMCZ was in line with global best practice.
Last year, MMCZ published an advert soliciting for partners in diamond processing under a venture capital agreement. This was in line with the corporation’s strategic initiatives towards increased value addition and foreign currency generation. But the venture failed after ZCDC raised objections because it was excluded.
The diamond trading industry in Zimbabwe has always been targeted by diamond smugglers, who use the Mozambique route.
Three years ago, a Lebanese diamond dealer Hussein Robai was deported from Zimbabwe over allegations of illegal diamond dealings with former ZCDC executives.