Zimbabwe's diamonds giant halts production

One of Zimbabwe's remaining diamond mining companies, Anjin Investments, has suspended production and placed its operations under care and maintenance as the global diamond market continues to face a prolonged downturn.

The decision comes amid falling rough diamond prices, weak consumer demand, and increased competition from synthetic stones — factors that have placed significant pressure on producers worldwide.

The company has also terminated contracts for a substantial number of workers who had reportedly gone unpaid for several months, as financial strain deepens.

Anjin, which resumed operations in 2017 after earlier government-led shutdowns in the diamond sector, has struggled to raise sufficient funds from recent diamond sales. Confidential internal documents indicate that a sale intended to clear salary arrears fell short of expectations.

After accounting for royalties and mandatory foreign currency surrender requirements, the company was left with limited funds, which were insufficient to cover its obligations.

Zimbabwe requires exporters, including diamond miners, to surrender a portion of their foreign currency earnings, which is then converted into local currency under prevailing exchange rules.

As a result of the shortfall, employees were reportedly only paid a portion of their outstanding salaries.

Internal meeting minutes also confirm that management resolved to suspend operations to cut costs, with the mine now placed under a non-production "care and maintenance" status.

The company further indicated that redundant workers' contracts would not be renewed, although they may be given priority if operations resume in the future.

In a letter to affected employees, mine manager Prosper Munemo confirmed the suspension of operations, citing ongoing financial and operational challenges.

"This serves as a formal notification that your employment contract with the company will not be renewed… The company is not operating due to major operational challenges," he wrote.

The workforce, previously estimated at around 400 employees, has been significantly reduced to a minimal team tasked with maintaining the site.

The crisis at Anjin reflects broader challenges facing the global diamond industry, which is experiencing one of its most difficult periods in over a decade.

Prices for natural diamonds have declined sharply since mid-2024, reversing the post-pandemic boom of 2021 and 2022, when strong demand in key markets such as the United States and Europe drove prices upward.

Major global producers have responded by cutting supply in an effort to stabilise prices. Companies such as De Beers Group and Alrosa have both reduced output and adjusted pricing strategies in response to weakening demand.

The downturn has hit diamond-dependent economies particularly hard. Countries like Botswana, where diamonds account for a significant share of export earnings and government revenue, have also faced economic strain.

Within Zimbabwe, the slump has affected both private and state-linked mining operations. Earlier reports indicated that the state-owned Zimbabwe Consolidated Diamond Company also implemented workforce reductions in response to falling revenues.

Anjin management confirmed that falling global prices, coupled with the rise of synthetic diamonds, have rendered operations unprofitable over the past two years.

A shareholders' meeting is expected to deliberate on the company's turnaround strategy and potential pathways to resume operations, including possible exploration expansion and additional funding.

The company, a joint venture between a Chinese construction firm and a Zimbabwe-linked investment entity, was first licensed to operate in the Chiadzwa diamond fields in 2010.

Its current challenges underscore the broader volatility in the global diamond market and the growing pressure on producers to adapt to shifting demand dynamics and evolving market conditions.