Zim poised to be second largest diamond producer

Zimbabwe is poised to become the world’s second- largest diamond producer in six years, doubling its market share to 17%, an independent forecast has shown.

According to Rapaport, Zimbabwe is ranked seventh after producing diamonds worth $334 million last year.

Botswana is the world’s top gem producer with $2,5 billion followed by Russia which produced diamonds worth $2,38 billion. Canada produced diamonds valued at $2,3 billion.

South Africa is ranked fourth after producing $1,8 billion worth of gems, while Angola, which produced $976 million is rated fifth. Namibia is now ranked sixth after producing $744 million worth of diamonds.

The second diamond industry report prepared by Equity Communications states that last year’s production and revenue from Marange diamonds accounted for 9% and 6% of global market share
respectively.

Equity Communications is an investor communications company and premium business information provider specialising on Zimbabwean industries that had considerable global significance such as tobacco, platinum and diamonds.

The company, however, said: “Making sense of Zimbabwe’s data on diamonds has been challenging again this year because a lot of things do not add up, including data available from companies actually mining in Zimbabwe.”

Production of diamonds is said to have jumped by 1 000% in three years to 11,1 million carats in 2011, at a time when the country was facing extreme domestic and international impediments.

Global diamond producers plan to increase production by 46,7% in the forecast period with companies operating in Marange poised to gain market share.

“Anjin Zimbabwe’s $350 million investment in its Marange concession will result in the company emerging as one of the largest diamond producers in the world, with 10% of world production in 2018,” reads part of the report. Anjin has on numerous occasions been accused of not remitting proceeds from diamond sales to Treasury.

Finance minister Tendai Biti was last month forced to revise downwards the $4 billion 2012 National Budget to $3,6 billion as a result of the underperformance of revenues from diamonds.

By 2018 Australia, Russia and Zimbabwe are projected to account for two-thirds of world output growth. The country would be responsible for 49,3% of annual growth from 2010-2018 according to the report, if production plans were to succeed.
“Without new production from Zimbabwe, world output in the forecast period would grow at 39% less than in the period 2000-2008.

“With new production from Zimbabwe, world output will grow 20% faster than in the period 2000-2008,” Equity Communications said.

In the eight years to 2018, world diamond producers plan to spend $15 billion on new mines and expansion of existing mines. If all projects go according to plan, annual production capacity will increase to plus 180 million carats around 2017-2018.

World supply will also be boosted by new production from Zimbabwe, which is expected to experience a significant growth now that the Kimberley Process has authorised diamond exports from the Marange fields.

Increased output mainly from Zimbabwe and Australia, would drive down the annual growth in per-carat-value of production from the current 19,47% per annum.

According to the report, the country’s alluvial diamonds have the potential to cause serious headaches for the market because quality of production varies tremendously — ranging from $5 to $280 per carat.

“Zimbabwe remains extremely vulnerable to the attention of would-be economic vultures and the threat of far-reaching secret diamond deals in exchange for immediate cashflow is
a distinct possibility,” the report said.

Related Posts