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Diamond price slump cripples Zimbabwe miners
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Zimbabwe central bank touts tight monetary contrZimbabwe's diamond industry is facing a deepening crisis as global prices continue to tumble, leaving major mining companies unable to meet salary obligations and forcing widespread job losses.
The Zimbabwe Independent has established that Anjin Investments - a joint venture between China's Anhui Foreign Economic Construction Company and the Zimbabwean military's investment arm, Matt Bronze - now owes employees seven months' worth of salaries. Workers say management has repeatedly blamed falling international prices for its failure to pay wages.
"We have gone for seven months without salaries. Our efforts to engage management have produced nothing. Management attributes its failure to settle salaries to falling prices," one employee said. "We are living on the edge. It is not a coincidence that a number of workers have been dismissed over diamond theft and for raising concerns over outstanding salaries. The situation is dire."
Anjin human resources assistant David Muchinguri would not comment immediately, saying he needed to consult his superiors.
The price slump has also severely affected the state-owned Zimbabwe Consolidated Diamond Company (ZCDC), which has retrenched an estimated 500 workers. Management withheld diamond parcels from auction in a bid to avoid selling at a loss, but the move cut off crucial revenue and triggered large-scale downsizing.
The Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) has condemned the retrenchments as unfair, accusing ZCDC of violating labour procedures. The union has since petitioned Mines and Mining Development minister Winston Chitando to intervene.
Compounding the crisis is erratic electricity supply, which has disrupted mining operations and further strained company finances.
The turmoil marks yet another setback for Anjin, which was among several companies expelled from Chiadzwa in 2016 when the government consolidated diamond operations under the newly formed ZCDC. Although Anjin later returned to the fields, the global downturn has once again upended its operations.
ZCDC's own challenges run deep. Despite receiving about US$80 million in state capitalisation in 2016 - used to install a 450-tonne-per-hour conglomerate processing plant and upgrade security systems - the company has continued to record losses.
Zimbabwe's diamond sector is buckling under the weight of a global slump driven by falling demand, declining rough diamond prices and growing competition from cheaper synthetic stones. With miners already grappling with high operating costs and persistent power shortages, the downturn has dealt a heavy blow to the industry.
As workers endure months without pay and hundreds more face unemployment, labour unions warn that the crisis is pushing diamond-producing communities closer to poverty. With no sign of a swift recovery in the global market, the future of Zimbabwe's diamond sector - and the thousands of livelihoods it supports - remains uncertain.ols
Zimbabwe's inflation rate is projected to fall to single digits by January 2026, marking what could be the most significant breakthrough in price stability in more than a decade. The projection, announced by Reserve Bank of Zimbabwe (RBZ) director of economic research and policy Nebson Mupunga, comes as annual inflation eased to 32,7% in October.
Speaking at the Zimbabwe Independent Banks & Banking Survey and Awards ceremony in Harare, Mupunga said month-on-month inflation had held steady at 0,4% since February, signalling what he described as real currency stability under the ZiG regime.
"This means if you were able to buy bread with ZiG, the same amount you used in February can still buy the same quantity today. In other words, the currency has actually appreciated," he said.
He attributed the improving outlook to tight money supply management and the RBZ's accumulation of foreign reserves now standing above US$980 million - enough to fully back total ZiG deposits estimated between ZiG17 billion (US$645,4 million) and ZiG18 billion (US$683,37 million). The reserve-backed structure is designed to insulate the currency from volatility that crippled past monetary reforms.
ZiG circulation in the formal economy has reached 15%, according to the RBZ, but economists caution that this represents only a small portion of total economic activity. Economist Gift Mugano noted that the formal sector contributes just 23,1% to overall economic activity, with the informal sector - which trades largely in US dollars - dominating at up to 80%.
Mugano argued that inflation dynamics would look very different if measured across the entire economy.
"The government has made a decision, in my view, to shelve the ZiG. That is why when they pay suppliers, they pay in US dollars," he said. "It is wisdom because if they had continued to use the ZiG, the ZiG would have been buried by now."
He added that the authorities appear to have accepted the US dollar as the anchor currency, a reality he says has contributed to falling inflation.
"Why would inflation rise when ZiG liquidity is almost zero? The tight monetary policy is keeping ZiG circulation below 2% of the economy," he said.
The RBZ has set 2030 as the target year for transitioning the ZiG into Zimbabwe's sole medium of exchange. To achieve this, Mupunga said the country must maintain single-digit inflation, build reserves to at least six months of import cover and ensure a stable, transparent foreign exchange market.
"We do not want the currency to fail again, as past reforms have," he said, referencing the collapse of the Zimbabwe dollar during the 2008–09 hyperinflation era.
The International Monetary Fund (IMF) this month credited Zimbabwe with a "stronger than expected" economic recovery in 2025, citing robust agricultural output, solid mining performance and easing inflation supported by exchange-rate stability.
However, the Confederation of Zimbabwe Industries (CZI) offered a more cautious outlook. In its October inflation brief, CZI projected annual ZiG inflation could drop to around 30% by December - still higher than RBZ forecasts. The industry body warned that the widespread use of the US dollar remains the biggest obstacle to Zimbabwe's de-dollarisation efforts.
With the US dollar offering relative price stability, CZI said it continues to be "attractive as both a transaction and savings currency". It warned that the ZiG will only gain public confidence if its stability is sustained over a long period.
For ordinary Zimbabweans, the real test is whether authorities can maintain monetary discipline after decades of failed currency reforms. And while Mupunga insists that the narrowing parallel market premium means "there is no need for anyone to go to the parallel market", the US dollar remains deeply embedded in daily transactions.
Whether the ZiG eventually becomes the centrepiece of a stable, modernised economy - or joins the list of abandoned currencies - will depend on sustained policy discipline, robust reserve management and, critically, restored public trust.
The Zimbabwe Independent has established that Anjin Investments - a joint venture between China's Anhui Foreign Economic Construction Company and the Zimbabwean military's investment arm, Matt Bronze - now owes employees seven months' worth of salaries. Workers say management has repeatedly blamed falling international prices for its failure to pay wages.
"We have gone for seven months without salaries. Our efforts to engage management have produced nothing. Management attributes its failure to settle salaries to falling prices," one employee said. "We are living on the edge. It is not a coincidence that a number of workers have been dismissed over diamond theft and for raising concerns over outstanding salaries. The situation is dire."
Anjin human resources assistant David Muchinguri would not comment immediately, saying he needed to consult his superiors.
The price slump has also severely affected the state-owned Zimbabwe Consolidated Diamond Company (ZCDC), which has retrenched an estimated 500 workers. Management withheld diamond parcels from auction in a bid to avoid selling at a loss, but the move cut off crucial revenue and triggered large-scale downsizing.
The Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) has condemned the retrenchments as unfair, accusing ZCDC of violating labour procedures. The union has since petitioned Mines and Mining Development minister Winston Chitando to intervene.
Compounding the crisis is erratic electricity supply, which has disrupted mining operations and further strained company finances.
The turmoil marks yet another setback for Anjin, which was among several companies expelled from Chiadzwa in 2016 when the government consolidated diamond operations under the newly formed ZCDC. Although Anjin later returned to the fields, the global downturn has once again upended its operations.
ZCDC's own challenges run deep. Despite receiving about US$80 million in state capitalisation in 2016 - used to install a 450-tonne-per-hour conglomerate processing plant and upgrade security systems - the company has continued to record losses.
Zimbabwe's diamond sector is buckling under the weight of a global slump driven by falling demand, declining rough diamond prices and growing competition from cheaper synthetic stones. With miners already grappling with high operating costs and persistent power shortages, the downturn has dealt a heavy blow to the industry.
As workers endure months without pay and hundreds more face unemployment, labour unions warn that the crisis is pushing diamond-producing communities closer to poverty. With no sign of a swift recovery in the global market, the future of Zimbabwe's diamond sector - and the thousands of livelihoods it supports - remains uncertain.ols
Zimbabwe's inflation rate is projected to fall to single digits by January 2026, marking what could be the most significant breakthrough in price stability in more than a decade. The projection, announced by Reserve Bank of Zimbabwe (RBZ) director of economic research and policy Nebson Mupunga, comes as annual inflation eased to 32,7% in October.
Speaking at the Zimbabwe Independent Banks & Banking Survey and Awards ceremony in Harare, Mupunga said month-on-month inflation had held steady at 0,4% since February, signalling what he described as real currency stability under the ZiG regime.
"This means if you were able to buy bread with ZiG, the same amount you used in February can still buy the same quantity today. In other words, the currency has actually appreciated," he said.
ZiG circulation in the formal economy has reached 15%, according to the RBZ, but economists caution that this represents only a small portion of total economic activity. Economist Gift Mugano noted that the formal sector contributes just 23,1% to overall economic activity, with the informal sector - which trades largely in US dollars - dominating at up to 80%.
Mugano argued that inflation dynamics would look very different if measured across the entire economy.
"The government has made a decision, in my view, to shelve the ZiG. That is why when they pay suppliers, they pay in US dollars," he said. "It is wisdom because if they had continued to use the ZiG, the ZiG would have been buried by now."
He added that the authorities appear to have accepted the US dollar as the anchor currency, a reality he says has contributed to falling inflation.
"Why would inflation rise when ZiG liquidity is almost zero? The tight monetary policy is keeping ZiG circulation below 2% of the economy," he said.
The RBZ has set 2030 as the target year for transitioning the ZiG into Zimbabwe's sole medium of exchange. To achieve this, Mupunga said the country must maintain single-digit inflation, build reserves to at least six months of import cover and ensure a stable, transparent foreign exchange market.
"We do not want the currency to fail again, as past reforms have," he said, referencing the collapse of the Zimbabwe dollar during the 2008–09 hyperinflation era.
The International Monetary Fund (IMF) this month credited Zimbabwe with a "stronger than expected" economic recovery in 2025, citing robust agricultural output, solid mining performance and easing inflation supported by exchange-rate stability.
However, the Confederation of Zimbabwe Industries (CZI) offered a more cautious outlook. In its October inflation brief, CZI projected annual ZiG inflation could drop to around 30% by December - still higher than RBZ forecasts. The industry body warned that the widespread use of the US dollar remains the biggest obstacle to Zimbabwe's de-dollarisation efforts.
With the US dollar offering relative price stability, CZI said it continues to be "attractive as both a transaction and savings currency". It warned that the ZiG will only gain public confidence if its stability is sustained over a long period.
For ordinary Zimbabweans, the real test is whether authorities can maintain monetary discipline after decades of failed currency reforms. And while Mupunga insists that the narrowing parallel market premium means "there is no need for anyone to go to the parallel market", the US dollar remains deeply embedded in daily transactions.
Whether the ZiG eventually becomes the centrepiece of a stable, modernised economy - or joins the list of abandoned currencies - will depend on sustained policy discipline, robust reserve management and, critically, restored public trust.
Source - Zimbabwe Independent
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