THE state-run diamond firm, Zimbabwe Consolidated Diamond Company (ZCDC) has heightened its security prowess in anticipation of increased production this third quarter into next year. ZCDC has for some time been tightening its security systems following reports of security breaches in the past with indications that the miner has been on a massive production ramp up since the takeover by new management. Zimbabwe Independent reporter Rugare Mubika (RM) had an interview with ZCDC chief executive Mark Mabhudhu (MM, pictured) and below are excerpts of the interview:
RM: Have you been scouting for new markets around the globe?
MM: Yes, we have been because the market in Zimbabwe is small but we reserve 10% of our production for the local market. The local market buys and also feeds their small factories but 10% of our production is reasonably small. The rest literally goes out, but most of the diamonds are sold from here, which means the buyers come, bid and then offer. When people come here to buy, they come with a condescending attitude that says we are coming to buy your product, you are not bringing your product to where we are, so they want to depress the price.
So you find half the time we get offers that are not consistent with the market sentiment. People come here, buy and sell in those markets literally getting much more. That is an ongoing exercise and when we get to the right spots we take our product. If we go there, we get more than when they come here. But it has to be done procedurally through a regulatory body like the Minerals Marketing Corporation of Zimbabwe (MMCZ). I am just a producer.
RM: Which markets, in particular, are you targeting?
MM: We are targeting places like Dubai, places like Antwerp in Europe, Tel Aviv in Israel and anywhere across the globe.
RM: In the short term, what plans have you put in place to increase output?
MM: One of the areas is optimisation and that has done a phenomenal change because diamond mining is probably one of the most complicated processes and also a young process in Zimbabwe. A number of things to increase production are security and if we don’t secure the diamonds they get stolen. We also have projects to expand production. We have new sites we are going to be working on this quarter into next year with the intention of increasing production.
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RM: What security measures have you put in place to plug diamond leakages?
MM: We set up a system and we can see everything happening on the operations. There are drones and we have a fence. I mean we can see people in the sort house in Masasa and from Chiadzwa in Mutare we can see everything. This process provided assurance to everybody. When a geologist says this block has 10 diamonds, they must come out here so that we can see them, which never used to happen. We have tight security monitoring.
RM: How much have you invested towards enhancing your security systems?
MM: We have put so much and I don’t have the exact number in terms of figures. There are more than 700 camera views and that is just one side of the story. We have done network upgrades to make sure these cameras view effectively and videos are transmitted. Just this system alone was about US$320 000. This set up including drones and everything else is more than US$2 million.
So it’s not a small investment, including the physical fencing and this is another US$2 million. We can talk about more than US$5 million and we are still going ahead. We are buying more drones, long endurance drones that stretch for up to 10 hours so that we don’t have gaps.
RM: When Zimbabwe finally assumes the chairing role of the Kimberly Process Certification Scheme, what key issues will you push for?
MM: Zimbabwe is going to make sure that the tenets of the KPCS are upheld. This is about good practice in the global diamond business and Zimbabwe will not take anything for granted. You will notice that the KPCS is also due for review after 20 years and Zimbabwe will be in the chair to oversee that process. So that is an important responsibility for Zimbabwe and we will make sure we keep pushing so that participants, observers and all communities are part of that process.
Remember the KPCS is premised on three pillars; government, industry and communities. That relationship is difficult to win in most cases. You may find a hostile community and a good industry or industry and government might be on one side while the community is fighting both but in Zimbabwe, we have set a good example on these relationships.
RM: What are some of the key challenges that diamond-producing countries are facing?
MM: Many challenges, for instance, this is an industry that relies heavily on foreign currency particularly for spares and of course replenishment of consumables and stuff. A lot of those come from South Africa or across the world, some of it in Europe. We need foreign currency and some of these challenges emanate from the fact that it is never enough. You know when we receive our proceeds, 40% is issued in local currency at the interbank rate, so we remain with 60% and it’s not enough. That is the biggest challenge so we have to go back to the market to buy again.
With these Russia/Ukraine geopolitical conflicts, the movement of spares is also affected and to some extent when it should be taking two weeks it takes six weeks so this affects production. I am sure you know we were facing the Covid-19 ravages.
Some of our earth-moving equipment and special technology come from Germany and some from South Africa and Russia, and any disruption out of a geopolitical scenario directly impacts us. Security as you saw is a difficult initiative and people always imagine making attempts, so they always try. Some of them come and cut the fence and try to go in but because of drones, we can see them. The challenge of dealing with the community whose lives we touch is probably one of the most pressing issues. So there has to be a balance between being aggressive against the community versus human rights abuse which people always talk about.
Then the other challenge is of course the markets. We have to find the best place to sell our product without having to accept what comes here.
RM: How much have you invested this year in Corporate Social Responsibility?
MM: We have done much, about US$500 000. What we are also doing now is that every business that we deal with must help us in dealing with the community and we are saying a percentage of your invoice must remain with us, which we put in a community fund for development. We are finalising these issues.
We have three horizons that are strategic in terms of our thrust. Horizon one is the diamonds of today, where the ones we are mining must finance the country’s requirements and look after requirements for the community, among other things. We must also make sure that we are able to do exploration to find new mines which are the diamonds of tomorrow. The third horizon is life beyond diamond mining. What are we going to leave when diamonds run out?