.png)
The Zimbabwe Consolidated Diamond Company (ZCDC) is advancing its Area 3 Diamonds Processing Plant Expansion in Chiadzwa, with the diamond recovery section slated for completion by 30 August 2026, Mining Zimbabwe can report.
By Rudairo Mapuranga
This critical infrastructure project aims to enhance diamond recovery, boost foreign currency inflows, and create employment, even as the industry grapples with calls for fiscal reform and stricter environmental regulations.
The Area 3 expansion is a strategic response to the shifting geology of the Marange fields. The easily accessible alluvial diamonds are largely depleted, forcing miners to tackle deeper, harder conglomerate deposits that are more expensive and complex to process. The new plant is engineered specifically for this challenge. This focus on deeper, harder-rock mining aligns with ZCDC’s long-stated strategy to transform into a highly mechanised firm capable of extracting these deeper gemstones.
While specific production targets for Area 3 are not detailed in public reports, the project fits within ZCDC’s broader ambition to boost national output significantly. The company has previously stated goals of ramping up production to 10 million carats annually, leveraging Zimbabwe’s substantial 56 million-carat diamond reserve base. Success in Area 3 is crucial for maintaining the country’s trajectory toward joining the prestigious “one tonne club” of top diamond-producing nations.
Three core economic benefits for Zimbabwe justify the expansion:
Improved Diamond Recovery: The new, modern plant is expected to deploy advanced technology to increase the efficiency and volume of diamonds extracted from the challenging conglomerate ore, directly boosting output.
Enhanced Foreign Currency Inflows: As Zimbabwe’s mining sector contributes over 60% of foreign earnings, every increase in diamond production translates to vital hard currency for the national economy. More recovered carats mean more auction revenue.
Employment Creation: The construction and operation of a major new plant will generate jobs. This aligns with ZCDC’s history of sourcing about 45% of its workforce from surrounding communities, offering a direct local benefit.
However, the path to achieving these benefits is fraught with significant headwinds that the project must navigate.
The Fiscal Pressure Point
The most urgent challenge comes from the industry’s unified call for fiscal reform. Diamond producers, including ZCDC, argue that Zimbabwe’s fixed 10% royalty rate is unsustainable, one of the highest globally, and fails to account for market volatility. With rough diamond prices plummeting and competition from lab-grown diamonds intensifying, this fixed cost severely squeezes margins.
The industry’s proposal is a sliding-scale royalty model, similar to the system recently implemented for gold, where the government’s take adjusts with profitability or price. For the capital-intensive Area 3 expansion, such a reform could mean the difference between a viable long-term investment and a struggling operation, especially during market downturns.
The Environmental Imperative
Simultaneously, the regulatory landscape is tightening. The forthcoming Responsible Mining Initiative (RMI) Part 2 promises “severe penalties, including loss of mining titles” for environmental violations. This adds a critical layer of operational cost and compliance necessity for the new plant.
This is not an abstract concern for the Chiadzwa community. Past mining by other companies has left a legacy of unreclaimed pits and slime dams filled with stagnant water, leading to sharp rises in malaria and posing deadly hazards to villagers. The Area 3 project will be a high-profile test of whether new development can break from this destructive past. The RMI Part 2 framework will require rigorous rehabilitation and mine-closure plans from the start, shifting compliance from voluntary to mandatory.
ZCDC brings relevant experience to this challenge. Under former CEO Mark Mabhudhu, the company executed a notable turnaround, moving from perennial losses to profitability by changing processes and adopting new technology. During the COVID-19 pandemic, ZCDC effectively used drone technology and remote surveillance for security and community awareness, demonstrating an ability to integrate advanced systems. Applying this technological mindset to environmental monitoring and efficient resource recovery will be essential for Area 3’s success under the new regulatory regime.
The Area 3 expansion is a microcosm of the entire Zimbabwean diamond sector’s dilemma. The unified call from ZCDC, Anjin, Alrosa, and RZM Murowa for a developmental partnership with the state underscores a critical juncture. They seek a fiscal framework that incentivises the very investment needed for projects like Area 3, warning that the current system “risks stifling the goose that lays the golden eggs”.
The government’s ambition to build a multi-billion-dollar annual export sector is clear. Achieving it requires balancing immediate revenue collection with long-term sector growth and environmental sustainability.
As the deadline for the diamond recovery section nears, the progress of the Area 3 plant will be closely watched. Its success or failure will hinge not just on engineering prowess but on the broader ecosystem in which it operates:
- Will the fiscal regime evolve to support capital-intensive, deep-level mining?
- Will the formidable new environmental regulations be enforced consistently and transparently?
- Can the project deliver on its promises of economic benefit while unequivocally protecting the community and ecosystem?
The completion of the Area 3 expansion by August 2026 will offer a powerful indication of whether Zimbabwe’s diamond industry can transform into a modern, responsible, and globally competitive sector or remain constrained by the challenges of the past. The ball, as the industry report states, is in the policymakers’ court.
