The Zimbabwe Consolidated Diamond Company (ZCDC) is hoping to achieve its target despite the impact on production caused by Covid-19.
This comes after the global economy was negatively impacted by the Covid-19 pandemic and ZCDC had to cancel all international diamond tenders since the introduction of worldwide travel restrictions-imposed to curb the spread of the pandemic.
According to the ZCDC’s Head of Public Relations Sugar Chagonda, the company has since deployed innovative marketing strategies in view of the obtaining challenges.
“The company like many other organisations has been facing a myriad of challenges owing to this unfortunate situation.
“The pandemic affected our planned diamond sales as you know most of our buyers come from around the globe.
“However, ZCDC has since deployed innovative marketing strategies in view of the obtaining challenges.
“We are glad that the salaries you mentioned are being paid and the arrears no longer stand at four months, and production is underway, ” he said.
Chagonda added that the company is working closely with their partners including the Minerals Marketing Corporation of Zimbabwe (MMCZ) to ensure that they convert the current stocks into liquidity.
“It’s a situation our employees and stakeholders are well abreast of as we keep them well informed.
“The impact of the afore-mentioned market disruptions has resulted in serious cashflow challenges which has consequently affected the company’s working capital position and production capacity.
“These challenges notwithstanding, ZCDC has been exploring and implementing various strategies to adapt to the market change (new normal) and ensure operational sustainability through these challenging times.
“Despite the impact to production, ZCDC is making efforts to ensure that the disruption to operations is minimised and hopes to achieve set targets if the situation continues on a positive trajectory in terms of both the local and global response to the Covid-19 pandemic,” he said.
Although diamond prices vary according to the 4Cs , Carat, Clarity, Cut and Colour, the average global diamond prices averaged USD100 per carat in 2019 ( total value realized from sell of rough diamonds globally/ total carats produced).
The Covid-19 outbreak started at the beginning of the year before most producers had held their main tenders or sight sales.
Owing to the currently obtaining market disruptions caused by Covid-19 most producers have suspended sales with the biggest players, ALROSA and De Beers allowing their sight holders to defer purchases.
It is estimated that on average global diamond prices have reduced by 30% but the major players who control over 70% of the global production have resorted to a strategy to maintain their prior year prices and limit volumes while they survive or alternative funding.
According to Chagonda, ZCDC has had to suspend sales due to low demand as end users and producers were currently not purchasing diamonds owing to the ongoing market disruptions.
“It is anticipated that prices will recover when normal trading resumes as indicated by the positive spending patterns picked from China after the nationwide lockdown was lifted.
“ZCDC also intends to take advantage of this expected market development by having a presence in both local and international markets.
“We are yet to resume normal diamond tenders locally although we have received interest from some of our traditional clients interested in purchasing some parcels during this period,” he said.