Diamond mining companies operating in Zimbabwe are mounting a unified and urgent appeal to the government to reform the sector’s fixed 10% royalty rate, which they label as one of the highest and most uncompetitive in the global diamond industry, Mining Zimbabwe can report.
By Rudairo Mapuranga
The push, highlighted in the 2026 State of the Mining Industry Report, comes not from a position of weakness but as a strategic call to secure the long-term viability and growth of a sector crucial to Zimbabwe’s economic ambitions. Producers argue that the rigid fiscal regime is untenable in the face of severe global market pressures, unique local operational challenges, and a government policy agenda that simultaneously seeks to attract investment and maximise state revenue.
The campaign is led by the key players shaping Zimbabwe’s diamond landscape: the state-owned Zimbabwe Consolidated Diamond Company (ZCDC), the Chinese Zimbabwean joint venture Anjin Investments, the Russian giant Alrosa (Zimbabwe) Ltd., and the privately operated RZM Murowa. Together, they represent the consolidated structure instituted after years of sector turmoil, now seeking stability and growth under a reformed fiscal model.
The industry’s plea is set against a backdrop of significant external challenges that have squeezed margins worldwide.
Plummeting rough diamond prices: After a post-pandemic surge, the global market for rough diamonds has corrected sharply. This decline erodes the revenue base upon which Zimbabwe’s fixed 10% royalty is levied, making it a disproportionately heavy burden during downturns.
The rise of lab-grown diamonds: The rapid consumer adoption of lab-grown diamonds, which can sell at an 80% discount to natural stones, has disrupted traditional markets, particularly in key segments like bridal jewellery in the United States and Asia. This competition places downward pressure on the value of all natural diamonds.
Geopolitical complexities: For Zimbabwean diamonds, historical controversies against some entities create additional market access hurdles and reputational barriers, potentially depressing the final selling price.
Local Geology and the High Cost Production Dilemma
Beyond global headwinds, Zimbabwean producers face intrinsic operational challenges that the fixed royalty exacerbates.
The nation’s diamond wealth is bifurcated. The famed Marange alluvial fields, operated by ZCDC and Anjin, are largely depleted of easy-to-mine surface gems. Mining has shifted to deeper, harder conglomerate deposits, which are significantly more expensive to extract. Meanwhile, the higher quality kimberlite pipes at RZM Murowa and those under exploration by Alrosa in Chimanimani offer better value stones but require substantial upfront capital and sophisticated technical expertise.
The core of the producers’ argument is that a one-size-fits-all 10% royalty fails to account for this spectrum. It unfairly penalises operations working with lower value, higher cost ore and stifles investment needed to develop the higher quality kimberlite resources that could boost Zimbabwe’s average dollar per carat yield.
A Policy Paradox: Gold’s Flexibility vs. Diamond’s Rigidity
The diamond producers’ case is bolstered by a glaring policy contradiction within Zimbabwe’s own mining fiscal framework. In its 2026 National Budget, the government demonstrated a clear understanding of progressive, market-sensitive royalty models by introducing a three-tier, price-linked system for gold.
Zimbabwe’s Gold Royalty Structure (2026)
Royalty rate: 3%
Price trigger: Applies when gold prices are between US$0 and US$1,200 per ounce.
Royalty rate: 5%
Price trigger: Applied when prices range between US$1,201 and US$2,500 per ounce.
Royalty rate: 10%
Price trigger: Levied when the gold price exceeds US$2,501 per ounce.
This system, designed to “ensure the mining sector contributes a fair share during periods of commodity price boom,” automatically adjusts the government’s take to market conditions. For the diamond sector, however, no such mechanism exists. The industry question is straightforward: if a smart, responsive model is logical for gold, why is a flat, high rate still imposed on diamonds?
This disparity is not lost on investors. The State of the Mining Industry Report 2026 reportedly reflects deep-seated concerns over fiscal predictability and competitiveness. The warning from Caledonia Mining regarding the impact of the new gold royalties on its profitability in Zimbabwe underscores the tangible effect these policies have on investment calculations and project viability.
Industry Response: Adaptation and Value Addition
Faced with these stacked challenges, diamond producers are not merely lobbying; they are actively adapting their strategies to survive and position for the future.
Embracing exploration: Companies like Alrosa and ZCDC are investing heavily in exploration across Zimbabwe, particularly for new kimberlite pipes, which are essential for the sector’s future beyond the alluvial deposits of Marange.
Pursuing value addition: There is a strong push, aligned with government goals in the National Development Strategy 1 (NDS1), to move beyond exporting rough diamonds. The objective is to develop local cutting and polishing, which can increase a diamond’s value by an estimated 8% or more. While progress has been slow, with less than 1% of stones currently processed locally, this represents a critical long-term strategy to capture more revenue within Zimbabwe and create jobs.
Navigating a tightening regulatory environment: Producers must also contend with an increasingly strict regulatory landscape. The forthcoming Responsible Mining Initiative Part 2 promises severe penalties, including loss of mining titles, for environmental violations, adding another layer of operational cost and compliance necessity.
The unified call from ZCDC, Anjin, Alrosa, and RZM Murowa represents a critical juncture for Zimbabwe’s diamond industry. They are advocating for a shift from a purely revenue extractive relationship to a developmental partnership with the state.
Their proposed solution centres on replacing the fixed royalty with a sliding scale model, similar to the new gold system or models proposed internationally. This would link the government’s take to profitability or price, protecting operators during downturns while ensuring the state captures greater value during booms. Such a reform, they argue, would enhance the sector’s resilience, attract fresh investment for exploration and beneficiation, and ultimately generate greater sustainable revenue for Zimbabwe’s economy than the current system, which risks stifling the goose that lays the golden eggs.
The government’s ambition to grow mining to a multibillion-dollar annual export sector is well known. The diamond producers’ message, as echoed in the 2026 industry report, is that achieving this goal requires a fiscal framework that incentivises growth, recognises sector-specific realities, and aligns Zimbabwe with global best practices. The ball is now in the policymakers’ court to decide whether to heed this call for partnership or maintain a course that the industry warns is unsustainable.
