HARARE – Zimbabwe’s diamond producers are pressing the Government to reduce mining royalties to 2% and lower licensing charges, warning that collapsing international prices and rising operating costs are threatening the viability of the country’s struggling diamond industry.
The appeal, presented by the Chamber of Mines of Zimbabwe (CoMZ) at a Ministry of Mines and Mining Development strategic planning workshop in Kadoma, comes as the Government prepares its 2027 National Budget and faces growing pressure to balance mining-sector competitiveness with public revenue requirements.
Chamber chief executive Isaac Kwesu said diamond prices had fallen from about US$72 per carat to approximately US$22, leaving producers struggling to absorb a fiscal burden that has remained high despite the deterioration in market conditions.
“The cost structure remains unbearable,” Kwesu said, describing the industry’s call for Government intervention, according to a report by Mining Zimbabwe published on Wednesday.
Producers want a price-sensitive royalty framework, with a base rate of 2% at current price levels and higher charges introduced as international prices recover. The proposed arrangement would give miners some relief during downturns while allowing the Treasury to capture additional revenue when market conditions improve.
The industry is also seeking a reduction in licensing fees for diamond X-ray machines from US$50,000 to US$10,000 per machine, arguing that the existing charges add to the cost of operating in an increasingly difficult market.
The lobbying effort involves producers including the state-owned Zimbabwe Consolidated Diamond Company (ZCDC), Anjin Investments, Alrosa’s local operation and RZM Murowa. However, the sector has suffered significant operational disruption. Mining Zimbabwe reported that Murowa had scaled down operations and Anjin had been placed under care and maintenance, leaving ZCDC as the only active diamond mine.
The pressure is not confined to Zimbabwe. Natural diamond producers globally are confronting weaker demand and growing competition from laboratory-grown stones, which have become increasingly popular among jewellery consumers. Mining Zimbabwe reported that rough diamond prices had fallen by approximately 74% from their 2020 peak.
Zimbabwe’s production figures illustrate the challenge. Kimberley Process data cited by Mining Zimbabwe show physical diamond output increased by 18.6% between 2022 and 2024, while the reported value of production fell by more than 61%. The divergence highlights how higher volumes do not necessarily translate into stronger export earnings when prices deteriorate.
Kwesu said producers had already engaged the Ministers of Finance and Mines, as well as the Public Service Commission, to present their concerns. Companies were also implementing employment reductions and other cost-containment measures.
The proposed royalty adjustment follows the Government’s introduction of a three-tier, price-sensitive royalty structure for gold in the 2026 Budget. The Chamber argues that a comparable approach for diamonds would make the fiscal regime more responsive to commodity-market conditions.
There is, however, an important distinction between the industry’s proposal and Government policy: the requested reduction has not been approved. Any adjustment will require a decision by the authorities, which must weigh the immediate financial pressures facing producers against the revenue needed by the State.
The Zimbabwe Mail’s assessment is that a flexible royalty system could help preserve productive capacity, employment and future investment in the diamond sector. But relief should be linked to transparent production reporting, credible sales valuations and effective monitoring of mineral exports to ensure that lower charges translate into sustainable operations rather than simply reducing public revenue.
The debate also highlights the need for Zimbabwe to capture greater value from its diamond resources through improved processing, transparent marketing and stronger access to international markets. A lower royalty may ease pressure on producers, but it cannot by itself resolve the structural challenges of weak demand, competition from synthetic diamonds and limited investment.
With the 2027 Budget approaching, the Government faces a difficult decision: maintain the existing fiscal burden and risk further contraction, or introduce a more responsive system that shares the effects of market downturns while preserving the State’s ability to benefit when prices recover.
