• October 2025 diamond exports surged to $43.4 million from zero in September, pushing cumulative revenue for the first 10 months to $130.12 million
• However, this was the lowest in recent years and a 36% drop from 2024
• Despite the rebound, the sector faces a long-term decline driven by a 74% global rough diamond price collapse, rising lab-grown competition, high 10% royalties etc
• Urgent reforms including lower royalties, reduced forex surrender, tax incentives for beneficiation, and infrastructure upgrades are essential to revive the industry

Sources: Zimstat, Equity Axis

Harare- Zimbabwe’s diamond industry continues to exhibit resilience amid hardship, with October 2025 exports surging to $43.4 million from zero in September, lifting the first 10 months' cumulative revenue to $130.12 million according to the latest Zimstat figures.

This rebound provides a vital lifeline, yet comparative analysis of the first 10 months across recent years reveals a troubling downward trajectory: $161.29 million in 2021, $131.15 million in 2022, a peak of $289.92 million in 2023, $202.09 million in 2024, and now the lowest at $130.12 million in 2025.

This represents a 36% drop from 2024's equivalent period and a 55% decline from 2023's high, reflecting the sector's deepening vulnerability to a 74% global rough price collapse since 2020 peaks, intensifying lab-grown competition claiming 20% of jewellery demand, and persistent domestic constraints that hinder reinvestment and operational stability.

The government's Vision 2030 goal of $1 billion annual diamond revenue, integral to scaling the mining sector to $12 billion (missed in 2023), remains elusive. Cumulative exports since 2021 exceed $1 billion only marginally by late 2025, despite ZCDC's forward-looking 2030 target and tactics like Dubai-based sales.

The July 2023 monthly record of $115.86 million, achieved through heightened Marange activity, stockpiling, efficiency gains by ZCDC and partners including Anjin Investments, indigenisation policy shifts enabling foreign inflows, and Kimberley Process certification, demonstrates the revenue potential when enabling factors converge. This proven episode offers a compelling case for immediate, substantive reforms to replicate and sustain such performance.

Global challenges remain formidable. Rough diamond market values have contracted from $16–18 billion in 2022 to $10–11 billion in 2025, with volumes holding at 115–120 million carats amid stockpiles and sanctions affecting Russian supply. Lab-grown diamonds, approaching 30 million carats in annual production, provide cheaper, ethically positioned alternatives that have particularly impacted mid-range naturals, forcing production curbs among majors. Zimbabwe's focus on industrial-grade alluvial rough leaves it exposed in this price-sensitive segment, ranking seventh globally yet struggling to capitalize consistently as a non-sanctioned supplier routing to Indian and other cutting centres.

Local impediments amplify these external pressures, creating a cycle of underperformance. The 10% fixed royalty rate, SADC's steepest, eclipses Botswana's 5%, South Africa's adaptable 0.5–5% scale, and DRC's 3.5%, squeezing margins in downturns and signalling uncompetitiveness, as noted in CZI assessments placing Zimbabwe third in regional operational complexity.

The 30% forex surrender, exchanged for ZiG at rates 30% below parallel markets, builds arrears and restricts dollar access for critical imports. Power shortages erode at least 20% of output potential, per ZNCC estimates, while aging infrastructure inflict losses like ZCDC's 1.4 million carats in 2023.

Private operators exemplify the strain. RioZim's Murowa mine contends with ongoing outages, equipment failures, and fiscal distress, culminating in High Court-ordered corporate rescue in October 2025 amid insolvency and oversight concerns. Smuggling and illicit flows further drain 10–20% of potential value, explaining the 2025 first-10-months plunge and threats to the sector's 70% share of mineral exports.

Diamonds export value in US$ million

Sources: Zimstat, Equity Axis

This comparative decline, from 2023's robust $289.92 million in the first 10 months to 2025's $130.12 million, highlights not merely market cycles but policy-induced fragility. The 2023 benchmark aligned with fleeting global price strength and domestic enablers, while subsequent drops reflect unaddressed inefficiencies in a maturing lab-grown era.

To illustrate the fiscal burden's impact, consider year-end export revenues as a proxy for gross output: $165.69 million in 2021, $164.93 million in 2022, $324.83 million in 2023, $219.99 million in 2024, and a projected $156 million for 2025 (extrapolating from the first 10 months). Using 2023's peak as an example, miners face layered deductions that severely erode net proceeds.

On $325 million gross (rounded for simplicity), a 10% royalty claims $32.5 million upfront, leaving $292.5 million. Then, the 30% RBZ surrender on export earnings assuming post-royalty for conservatism forces relinquishment of $87.75 million in forex, exchanged for overvalued ZiG at a 30% effective discount, yielding only about $61.4 million in real value (a $26.35 million implicit loss).

This leaves miners with $204.75 million in retained USD plus the diminished ZiG equivalent, for an effective pre-cost cash inflow of roughly $266.15 million, or 82% of gross, already down 18% from deductions alone. From here, assuming typical operating costs at 70% of net revenue post-royalty (around $204.75 million, based on industry benchmarks for alluvial diamond mining where costs per carat range $20–40 against Zimbabwe's $53 average in 2023), gross profit shrinks to about $61.4 million.

A 25% corporate tax (plus minor levies like the 2% on gross for 2025 onward) then extracts another $15.35 million, yielding a net profit of just $46.05 million, or a mere 14% margin on gross.

Scaling this across years: for 2021's $166 million gross, net might hover at $23 million; 2022's $165 million at $23 million; 2024's $220 million at $31 million; and 2025's projected $156 million at a paltry $22 million. These razor-thin nets, after accounting for additional "other taxes" like VAT on imports (15%) and withholding taxes, leave scant capital for expansion, such as modernizing equipment (ZCDC's 2023 losses highlight this gap), investing in solar to combat 20% power deficits, or pursuing value addition like local polishing (which requires upfront of over $50 million for facilities).

In a competitive global arena, where peers like Botswana retain higher shares through lower royalties, Zimbabwean firms struggle to fund research and development, attract FDI, or scale production, evidenced by RioZim's insolvency and ZCDC's job cuts amid 15% price drops in 2024–2025. The layered fiscal drag not only deters reinvestment but amplifies vulnerability to lab-grown disruptions, turning potential growth into stagnation.

This is precisely why lowering taxes pays off, especially during these troubling times of price volatility and synthetic oversupply. By easing royalties to 5–7% and surrender to 15–20%, the government could boost miners' effective retention by 10–15% of gross, injecting $30–50 million annually into the sector, funds that could double output efficiency, as seen in Botswana's model yielding stable $2.5 billion exports.

Reduced burdens would encourage beneficiation, potentially adding 20–30% to revenues through premiums, while attracting FDI to offset short-term fiscal shortfalls via expanded production. In essence, a lighter touch fosters resilience, turning episodic surges into sustained contributions to Vision 2030.

To achieve this, Zimbabwe could adopt a suite of tangible reform incentives drawn from successful models in Botswana, Russia, South Africa, and Canada, designed to ease fiscal burdens, boost retention, and encourage value addition amid lab-grown competition and price declines. Reducing royalties to a variable 5-7% tiered by profitability, following Botswana's approach, could save producers $50-100 million annually on $300 million gross, enabling 20-30% output growth. Lowering forex surrender to 15-20% at market rates would end arrears and fund solar/machinery upgrades, mirroring 25-30% outage reductions there.

Offering 5-year tax holidays for local polishing facilities, akin to Canada's exploration credits, could mandate 30% domestic processing by 2030, adding $200-300 million in retained value. Canada offers the Mineral Exploration Tax Credit (METC), a 15% non-refundable tax credit for eligible mineral exploration expenses, which incentivizes investment in the mining sector similar in spirit to tax holidays by reducing effective tax burdens and helping companies raise equity.

Additionally, there's a 30% Critical Mineral Exploration Tax Credit (CMETC) for specified minerals. However, these are targeted at exploration rather than downstream activities like diamond polishing or beneficiation. For processing, Canada provides a "processing allowance" (accelerated depreciation deductions of 7-13% on eligible assets)

Implementing blockchain traceability for exports, as in Botswana's G7 hub, would curb 10-20% smuggling leaks and attract $200 million FDI. Botswana extensively uses blockchain traceability for diamonds, primarily through the Tracr platform developed by De Beers in partnership with the Botswana government and Debswana. Tracr is a blockchain-based system that tracks diamonds from mine to market, providing immutable provenance records. It combines blockchain with AI, IoT, and advanced scanning for source assurance. Botswana, the world's leading diamond producer by value, aggregates and scans much of its rough diamonds on Tracr. This covers a significant portion of global supply.

Providing subsidies for solar hybrids and modern dredgers through a $100 million fund would target 15-20% efficiency gains, addressing 20% power losses. Exempting SMEs from royalties for at least 2 years would encourage artisanal inclusion, while granting 100% forex retention for reinvested profits, would sustain high volumes.

Meanwhile, introducing VAT rebates on equipment imports would reduce capex barriers for upgrades, preventing losses like ZCDC's 1.4 million carats. Establishing joint ventures with negotiated government stakes of 15-24%, as in Botswana's De Beers model, would secure FDI. Creating a $20 million skills/training grant program, partnering with India's Surat for AI grading and tech transfer, would build capacity.

Also, offering 0% corporate tax on beneficiation profits would incentivize cutting centres, while allocating 20% concession quotas for artisanal miners, with micro-loans, would boost inclusive growth. Finally, launching a 2026 multi-stakeholder Diamond Taskforce would oversee quick wins like royalty tweaks, driving 20-30% sector growth toward $1 billion by 2030.

Coordinated implementation of these incentives would prioritize fiscal relief, infrastructure resilience, and governance transparency. In a $97 billion market increasingly bifurcated by synthetics, emphasizing traceable, ethical naturals could premium-position Zimbabwe's output. The October 2025 surge and 2023 precedent affirm the sector's capacity; sustained policy evolution is essential to convert volatility into Vision 2030 fulfilment, ensuring diamonds drive broad-based prosperity rather than intermittent relief.

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