by Grace Chekai
Fear has gripped the diamond sector which anticipates a long recovery period from the COVID-19 pandemic, Harare Post has learnt.
Economic analysts say the situation has been exacerbated by the shutdown in diamond mining and trade across the globe.
The two operational diamond mining companies in Zimbabwe, that is Zimbabwe Consolidated Diamond Company (ZCDC) and Rio Zimbabwe Limited`s Murowa Diamonds in Zvishavane, have both stopped operations and put their mines on care and maintenance, a contact has revealed.
According to the contact, the decline in the diamond production and trading is similar across the world.
“The trend has been similar across the globe with the already subdued diamond sector having been frozen across the supply chain, from mining to sales, on account of lockdown in two of the top diamond markets in the world, the United States of America and China,” said the contact.
The contact said that the diamond sector feared it might take a year or even more for it to recover after the Covid-19 pandemic.
He said that ZCDC has about 300 000 carats of diamonds which were due to be auctioned at the beginning of this month but was affected by the Covid-19 pandemic which has forced a number of countries to close borders and embark on a lockdowns to stop the spread of the deadly virus.
However, the ZCDC is expected to resume operations this week as it was granted essential service status which exempts it from the national 21-day lockdown.
An international diamond industry analyst says, “Although the slump in diamond supply would ordinarily be expected to have a positive effect on diamond prices around the fourth quarter of 2020, the sudden slump in economic activity globally is likely to have a knock-on-effect on the spending capacity in diamond markets.
“Luxury spending will be greatly affected. As such, the diamond sector will endure a decline in demand.”
The Ziminsky Global Rough Diamond Price Index shows that diamond prices slumped by seven percent between February and March 2020, the sharpest slump in over 18 months.
Russian diamond producer, PJSC Alrosa reported a 12.3 percent slump in the sale of rough stones between January and February 2020 whilst De Beers also reported rough diamond sales of US $355 million for February 2020 down from sales of US $551 million in January 2020.
The COVID-19 pandemic has not only impacted the mining sector. Tourism, air transport, and the oil sectors are visibly bearing the effects of the pandemic.
