Mutapa blocks ZCDC diamond sale

Zimbabwe's state-owned diamond miner, the Zimbabwe Consolidated Diamond Company (ZCDC), has been plunged into a deeper financial crisis after its sole shareholder, the Mutapa Investment Fund (MIF), vetoed the sale of a key diamond parcel that had been earmarked to pay salaries and sustain operations.

Confidential documents obtained by the Zimbabwe Independent show that MIF — the country's sovereign wealth fund — rejected ZCDC's plan to offload diamonds at US$17,17 per carat through a joint venture (JV) partner. The sale price was far below the company's operating cost of US$30,71 per carat and production cost of US$23,79, raising fears it would worsen the miner's already fragile position.

ZCDC had hoped to use the proceeds to pay outstanding June and July salaries and fund production. But MIF suspended the deal, citing the need to protect national assets, and ordered a review of the JV arrangement by legal teams.

"We could not accept that price and so referred the matter to both Mutapa and our board," ZCDC chief executive Douglas Zimbango told senior staff. "The board and Mutapa were of the view that we should suspend the JV while our legal teams reviewed the arrangement."

A last-minute proposal to sell the May and June output on consignment at a reduced commission was also rejected by the JV partner, leaving ZCDC without funds to cover wages or production costs.

Industry headwinds are compounding the company's troubles. ZCDC confirmed that it has been hit by a collapse in global diamond prices, worsened by growing competition from lab-grown stones.

"It is true that the worldwide diamond industry is in turmoil and ZCDC has not been spared," a company official said in a statement. "The company is positioning itself to tackle the challenges primarily related to pricing, resulting from competition from lab-grown diamonds."

The failed deal comes on the back of mass retrenchments at ZCDC, with hundreds of workers — mostly from the Chiadzwa host community — losing their jobs. Official trade data paints a grim picture: Zimbabwe's diamond earnings have plunged 46%, from US$303 million in 2023 to just US$163,76 million by July 2025.

The Chiadzwa Community Share Ownership Trust (CCSOT) has accused ZCDC of carrying out the layoffs without proper consultation and disproportionately targeting locals. CCSOT chief executive Hardwork Mukwada claimed that of the 575 workers retrenched, over 500 were from the host community.

"Your alleged meeting with Chief Marange on 11th June 2025 was neither a consultation of him as chairman of CCSOT nor a consultation of CCSOT in any manner," Mukwada wrote in a protest letter.

ZCDC maintains that it followed due process, met traditional leaders, and secured the necessary approvals from the Ministry of Public Service, Labour and Social Welfare before effecting the retrenchments.

Formed in 2016 after government took over Chiadzwa diamond fields from seven private firms accused of large-scale looting, ZCDC was seeded with US$80 million to establish a fully state-controlled operation. But nearly a decade later, the company is struggling to stay afloat — squeezed between falling global demand, hostile community relations, and internal operational crises.