News / National
State diamond firm lays off hundreds to avoid collapse
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Zimbabwe's state-controlled diamond miner, the Zimbabwe Consolidated Diamond Company (ZCDC), has launched a major retrenchment exercise in a desperate bid to stave off collapse, following a brutal crash in global diamond prices that has shaken the industry.
Internal documents reveal that the struggling miner has already begun laying off workers as part of cost-cutting measures aimed at keeping the company afloat. This development comes less than a decade after authorities poured US$80 million into establishing ZCDC, envisioned as a vehicle to safeguard Zimbabwe's diamond wealth following years of allegations of rampant looting.
ZCDC was formed in 2016 after government forcibly shut down seven privately-owned companies accused of plundering the Marange diamond fields. The state entity inherited equipment from the ousted firms and was expected to anchor Zimbabwe's efforts to stabilize its economy through enhanced diamond revenue.
However, in an interview with The Independent, a ZCDC spokesperson confirmed the sweeping job cuts, admitting the company had to make hard decisions in light of plunging revenues. Around 200 workers are said to be affected by the retrenchments.
"Diamond prices have gone down on the market," said the spokesperson. "The company had to choose between closing and maintaining operations at a reduced rate whilst awaiting price recovery."
Global prices for natural diamonds have fallen by 26% since 2022, while synthetic, lab-grown stones - now popular in major jewelry markets - are selling for 74% less than they were in 2020. The oversupply of diamonds, coupled with dampened demand due to geopolitical tensions, has crippled the industry. In December, global industry leader De Beers disclosed it was sitting on a US$2 billion stockpile of unsold diamonds and has since slashed production by 20%. Parent company Anglo American has since announced plans to sell the historic diamond unit.
For Zimbabwe, the troubles at ZCDC signal deeper woes for government finances. As one of the few remaining state-owned companies still providing fiscal support through mineral exports, ZCDC's financial crisis adds pressure to a government already battling severe economic headwinds.
Documents seen by The Independent show that retrenched workers have been ordered to vacate the Chiadzwa diamond operations site with immediate effect. A memo circulated by management two weeks ago read: "Today's meeting was about notification of employees who have been identified for involuntary retrenchment. The identified employees will be served with notification letters today that they will sign. These employees will leave the ZCDC premises…reason being the nature of our core business, as well as trying to avoid incidents and injuries."
The retrenchments have provoked outrage among workers, some of whom accuse management of unfair practices. Several employees interviewed said the company had prioritized keeping workers from distant towns while dismissing locals who had been the backbone of operations. "Close to 200 local employees have been retrenched. Local workers have invested their time and efforts into the company. They have also contributed significantly to the local economy," one worker said.
ZCDC's struggles are not new. In July this year, The Independent revealed that the company had been fined US$1.73 million by tax authorities over unpaid dues for 2022. Auditors flagged a range of compliance failures, including missed transfer pricing deadlines and chronic delays in VAT and income tax payments. Management attributed the failures to cash flow challenges.
These difficulties reflect broader distress across Zimbabwe's mining sector. The Chamber of Mines of Zimbabwe reported that 1,216 jobs were lost in 2024, a fourfold increase from 2023. Addressing its annual conference in Victoria Falls in May, the Chamber said that by the end of last year, the sector employed 49,160 workers, with an unknown number working informally in the gold sector. A total of 69 mines retrenched staff in 2024, compared to 42 in the previous year, as rising costs and falling profits battered companies across the industry.
While gold, platinum group metals, and chrome registered increased output in 2024 - lifting total mineral exports by 9% to US$5.9 billion - diamonds bucked the trend. Industry data shows the average price of a one-carat natural diamond dropped from over US$6,000 in 2022 to below US$4,500 in 2024.
Industry observers warn that younger buyers in key markets like the United States and Asia are increasingly favoring cheaper, environmentally friendly lab-grown diamonds, a shift that could permanently reshape the global industry and deepen ZCDC's woes.
Internal documents reveal that the struggling miner has already begun laying off workers as part of cost-cutting measures aimed at keeping the company afloat. This development comes less than a decade after authorities poured US$80 million into establishing ZCDC, envisioned as a vehicle to safeguard Zimbabwe's diamond wealth following years of allegations of rampant looting.
ZCDC was formed in 2016 after government forcibly shut down seven privately-owned companies accused of plundering the Marange diamond fields. The state entity inherited equipment from the ousted firms and was expected to anchor Zimbabwe's efforts to stabilize its economy through enhanced diamond revenue.
However, in an interview with The Independent, a ZCDC spokesperson confirmed the sweeping job cuts, admitting the company had to make hard decisions in light of plunging revenues. Around 200 workers are said to be affected by the retrenchments.
"Diamond prices have gone down on the market," said the spokesperson. "The company had to choose between closing and maintaining operations at a reduced rate whilst awaiting price recovery."
Global prices for natural diamonds have fallen by 26% since 2022, while synthetic, lab-grown stones - now popular in major jewelry markets - are selling for 74% less than they were in 2020. The oversupply of diamonds, coupled with dampened demand due to geopolitical tensions, has crippled the industry. In December, global industry leader De Beers disclosed it was sitting on a US$2 billion stockpile of unsold diamonds and has since slashed production by 20%. Parent company Anglo American has since announced plans to sell the historic diamond unit.
For Zimbabwe, the troubles at ZCDC signal deeper woes for government finances. As one of the few remaining state-owned companies still providing fiscal support through mineral exports, ZCDC's financial crisis adds pressure to a government already battling severe economic headwinds.
Documents seen by The Independent show that retrenched workers have been ordered to vacate the Chiadzwa diamond operations site with immediate effect. A memo circulated by management two weeks ago read: "Today's meeting was about notification of employees who have been identified for involuntary retrenchment. The identified employees will be served with notification letters today that they will sign. These employees will leave the ZCDC premises…reason being the nature of our core business, as well as trying to avoid incidents and injuries."
The retrenchments have provoked outrage among workers, some of whom accuse management of unfair practices. Several employees interviewed said the company had prioritized keeping workers from distant towns while dismissing locals who had been the backbone of operations. "Close to 200 local employees have been retrenched. Local workers have invested their time and efforts into the company. They have also contributed significantly to the local economy," one worker said.
ZCDC's struggles are not new. In July this year, The Independent revealed that the company had been fined US$1.73 million by tax authorities over unpaid dues for 2022. Auditors flagged a range of compliance failures, including missed transfer pricing deadlines and chronic delays in VAT and income tax payments. Management attributed the failures to cash flow challenges.
These difficulties reflect broader distress across Zimbabwe's mining sector. The Chamber of Mines of Zimbabwe reported that 1,216 jobs were lost in 2024, a fourfold increase from 2023. Addressing its annual conference in Victoria Falls in May, the Chamber said that by the end of last year, the sector employed 49,160 workers, with an unknown number working informally in the gold sector. A total of 69 mines retrenched staff in 2024, compared to 42 in the previous year, as rising costs and falling profits battered companies across the industry.
While gold, platinum group metals, and chrome registered increased output in 2024 - lifting total mineral exports by 9% to US$5.9 billion - diamonds bucked the trend. Industry data shows the average price of a one-carat natural diamond dropped from over US$6,000 in 2022 to below US$4,500 in 2024.
Industry observers warn that younger buyers in key markets like the United States and Asia are increasingly favoring cheaper, environmentally friendly lab-grown diamonds, a shift that could permanently reshape the global industry and deepen ZCDC's woes.
Source - The Independent
