Murowa Diamond Production Up Slightly, but Challenges Remain
By Rudairo Mapuranga
According to RioZim’s interim financial results for the period ended 30 June 2024, diamond production at Murowa rose by 2%, with the mine producing 216,000 carats compared to 212,000 carats during the same period in 2023.
Despite this modest increase, the mine’s revenue and overall profitability suffered significantly due to challenges facing the global diamond market.
“Production for the period at the company’s associate RZM Murowa (Private) Limited marginally increased by 2% to 216,000 carats compared to 212,000 carats recorded in the comparative period in 2023,” the Group stated.
According to RioZim, the improvement in production was largely due to processing higher-grade stockpiles, which provided a short-term boost. However, “despite an increase in diamond production, Murowa recorded a decline in revenue and profitability due to a continued decline in diamond prices,” the report highlighted.
The global diamond market has been grappling with persistent challenges, including economic uncertainties, geopolitical tensions, and shifts in consumer preferences, contributing to weaker demand for diamonds. As a result, even though Murowa increased its production slightly, the overall value of its output declined by 15% due to lower prices in international markets.
“The share of profit from the associate declined to ZWG 5.6 million from ZWG 12.8 million recorded in the comparative period,” the company noted, reflecting the severity of the price slump.
While Murowa remains a crucial part of RioZim’s portfolio, its profitability is closely tied to global diamond prices. RioZim will need to navigate these market headwinds carefully to safeguard Murowa’s financial performance. The company is now exploring ways to improve operational efficiency and reduce costs to mitigate the impact of falling diamond prices.
To secure its future in an increasingly competitive market, Murowa is focusing on extending the life of its pits. Extensive exploration activities are underway to identify new diamond-bearing zones that could sustain operations in the long term.
“The mine is currently engaged in extensive exploration activities aimed at extending the life of its pits, which will pave the way for the resumption of mining activities in the pits,” RioZim noted. This exploration is critical for ensuring Murowa’s long-term viability, particularly as mining from the pits has been suspended, and the mine is currently relying on processing stockpiles to maintain production.
The success of these exploration efforts will determine whether Murowa can resume full-scale mining operations in the future. Until then, the mine continues to rely on tailings and stockpile processing, which, while sustaining operations in the short term, limits its potential for significant growth.
In addition to exploration, Murowa is also exploring avenues to enhance production efficiency and reduce operational costs. Given the current state of the diamond market, improving efficiency is essential for maintaining profitability. The company’s management is focused on cost-cutting measures and optimizing the use of existing resources while ensuring the mine remains compliant with regulatory and environmental standards.
RioZim’s involvement in the diamond sector is part of its broader strategy to diversify its mining operations and reduce its reliance on gold production. With the gold segment experiencing challenges due to operational inefficiencies and fluctuating production levels, Murowa has become an increasingly important component of the company’s portfolio. Despite the current market challenges, RioZim remains committed to its diamond operations, recognizing the long-term value Murowa can bring once market conditions improve.
However, RioZim’s management acknowledges that Murowa’s profitability will remain vulnerable to global market conditions in the short term. The company stressed the need to closely monitor diamond prices while continuing to pursue efficiency improvements to ensure the mine’s sustainability. “The exploration program at the Murowa pits, which was in motion as of the period end, continued into the second half of the year in an effort to bring back mining activities and extend the life of the mine,” the Group confirmed.