Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
State-owned Zimbabwe Consolidated Diamond Co. plans gem auctions outside the country, including in Asian cities, to widen marketing options amid a market glut that’s steadily made polished stones cheaper.
The company must explore and penetrate the international market to boost sales volumes and plans 11 international tenders in 2020, according to acting Chief Executive Officer Rob de Pretto.
“All those big companies like De Beers and Alrosa are also doing it, so we must also be there with them,” De Pretto said in an emailed response to questions. “Harare is not a choice with many international buyers. By going to Dubai, Hong Kong, Antwerp and all those places, that is where the international buyers are.”
The tenders will be conducted by the Minerals Marketing Corp. of Zimbabwe. In its third auction of the year in September, MMCZ offered 316,000 carats in the capital, Harare, which attracted buying interest from Belgium, Dubai, India, Israel and South Africa, it said at the time.
ZCDC has cut its diamond production forecast for this year by 24% to 3.1 million carats, but sees a rebound to 6.12 million carats in 2020. In total, the nation expects 4.1 million carats output this year from 2.8 million carats in 2018. At the peak of production in 2012, the southern African country’s output was 12 million carats.
Buyers purchasing from African mines and selling to stores in cities such as New York, London and Hong Kong are being squeezed by oversupply and tighter bank financing. De Beers, the world’s biggest diamond producer, is said to have lowered prices by 5% at its sale this month to cushion the middlemen that trade and polish its rough gems.
(By Godfrey Marawanyika)
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