• Zimbabwe remains a significant natural diamond producer but faces severe challenges from a ~74% global rough diamond price collapse since peaks, and high 10% royalties
• The sector shows resilience with record highs in late 2025 and expansion plans but overall output has halved from 2012 peaks, calling for urgent reforms
• To thrive long-term, Zimbabwe must adapt proactively by emphasizing local beneficiation,  marketing natural diamonds' rarity/ethical story, fiscal policy easing, diversification into industrial uses…
• And  global alliances for natural vs. lab-grown distinctions turning the lab-grown threat into an opportunity

Harare- The diamond industry, long synonymous with luxury, rarity, and enduring value, is undergoing a profound transformation due to the rise of lab-grown diamonds. These synthetic gems, chemically identical to their natural counterparts but produced in controlled environments, have flooded the market, driving down prices and challenging traditional mining economies.

Lab-grown diamonds, which can be manufactured at a fraction of the cost, are now priced up to 90% below natural diamonds according to De Beers Group, with further declines anticipated as production scales.

This shift has particularly impacted countries reliant on natural diamond exports, forcing them to reconsider fiscal policies, marketing strategies, and diversification efforts. In 2026, the industry faces renewed pressures, with De Beers cutting rough diamond prices for the first time in over a year amid weak demand from China and a surge in lab-grown alternatives.

Natural diamond markets began the year on a cautious note, with reports of sharp price cuts in mid-sized stones and stockpiles swelling in producer nations like Botswana due to persistent low prices.

Zimbabwe, as one of the world's top diamond producers, finds itself at the epicentre of this disruption. Zimbabwe is the world's 7th largest diamond producer by volume, producing over 4 million carats annually, ranking behind top producers such as Botswana, Russia, Angola, Canada, South Africa, and Namibia.

With vast reserves in the Marange fields, the country has seen its diamond sector contribute significantly to national revenue, yet it now grapples with declining global prices and competition from synthetics.

Against such a competitive environment, Zimbabwe imposes the highest royalty rate in Africa at 10% from another record high of 15% in 2013, adding another layer of complexity as it balances revenue generation with industry sustainability.

Diamond production in Zimbabwe is dominated by state-controlled and joint-venture entities, primarily operating in the Marange diamond fields and the Murowa area. The major companies currently involved in extraction include the Zimbabwe Consolidated Diamond Company (ZCDC), Anjin Investments, and RioZim Murowa, with Russian-owned Alrosa involved in exploration.

Zimbabwe's diamond production has been one of the cornerstones of its mining industry since even before the discovery of the Marange fields in 2006, which propelled the country into the global spotlight as a major producer.

In 2004, one year after the country joined the Kimberley Process, Zimbabwe produced 450,000 carats valued at $7.98 million, reaching an all-time high of 12 million carats in 2012 valued at $644 million followed by 10.4 million in 2013 valued at $539 million before fluctuating to a record low of 2.102 million carats in 2016 and 2.108 million in 2019.

Since 2004, the country has produced rough diamonds valued at $4.24 billion from approximately 83.4 million carats up to 2024. Zimbabwe's production has more than halved from a peak of 12 million carats in 2012 to just 5.3 million in 2024, and earnings have gone down from $644 million, more than halving to $220 million in 2024.

In 2025, the country had set an ambitious target of between 10-12 million carats with ZCDC targeting to double its output to 5.7 million carats. Anjin Investments has set a target of producing 1 million carats in 2025, supported by plans to acquire new, modern equipment to overcome previous production shortages.

However, the target comes in a highly taxed economy, where royalties are the highest, blackouts continue to be rampant though supply has improved lately, local currency continuing to depreciate on the parallel market, exacerbated by the global price crunch courtesy of lab-grown diamonds.

Such a tough environment disincentivises production and production efficacy, and amid low prices, this warrants government intervention through policies, either tax deductions or a tax structure where a higher 10% can be used when prices surpass a certain milestone, a tiered tax system just like the 10% royalty applied on gold only when gold prices surpass US$5k/oz. This will allow costs to align with production, and gives room to the companies to reinvest, value add, and expand production. 

For immediate context, Zimbabwe's diamond sector experienced a significant downturn in the first half (H1) of 2025, with production and exports falling sharply due to weak global demand, falling prices, and operational challenges. Diamond export volumes plunged by 60% to 2.7 million carats, according to the Minerals Marketing Corporation of Zimbabwe (MMCZ). In the first quarter (Q1) of 2025 alone, diamond production declined by 45%, falling to 0.78 million carats from 1.41 million carats in the same period in 2024.

In the first 11 months, diamonds export earnings fell to $133.84 million from $212.2 million during the same period last year. Earnings continue plunging as lab-grown continues their dominance especially in a price-sensitive market, warranting the need for reforms to alleviate the sector.

Tax deductions, or government incentives such as duty exemptions on essential equipment imports, incentives for investors will be appealing as Zimbabwe's diamonds are prized for their quality, and the country has maintained a significant share of the global supply. With lab-grown, rough diamonds are only left mainly for a niche segment of investors and customers that have taste for quality. Policies should also be proactive, policy slippages hurt production.

Reactionary methods used by government like the ones seen after the collapse of the retail sector does not work, as these policies for retail were put after almost every retailer was out of business. So whom will you be protecting?

Since 2021 to FY2024, diamond exports have generated $1.027 billion according to Kimberley Process while Zimstat data for the period shows that $875.44 million was accumulated. In 2016, diamond production valued at $105 million contributed to the mineral sector's overall impact on GDP, which grew by 2.3% that year. These high taxes, like the 15% royalty then chokes companies to capitalise on rising prices. At a favourable rate then, Zimbabwe could have earned more and companies expanded through reinvestments.

It is because of such scenarios which leads to leakages like those reports historically indicating that between 2009 and 2015, only a fraction of the $2.4 billion in production value reached the treasury, with Finance Minister Tendai Biti noting just $41 million in 2013.

As global prices slump in early 2026, with De Beers' cuts reflecting broader demand weakness, Zimbabwe needs to ease burden on producers. There is a policing deficit which needs to be corrected. When diamond market reacts, governments needs also to be proactive.

Globally, the diamond market is projected to experience varied growth trajectories through 2030, with natural diamonds facing headwinds from lab-grown competitors. The overall diamond market is expected to grow by USD 53,381.6 million from 2026 to 2030, accelerating at a CAGR of 8.6%, driven by jewellery demand and industrial applications. The diamond jewellery segment, valued at USD 358.1 billion in 2024, is forecasted to reach USD 437.2 billion by 2030, growing at a CAGR influenced by lab-grown affordability.

However, the broader diamond market, including rough and polished, was USD 42.74 billion in 2025 and is projected to hit USD 53.16 billion by 2033 at a 2.7% CAGR, reflecting slower growth for naturals. Lab-grown diamonds are surging ahead, with the market valued at USD 18.91 billion in 2023 expected to reach USD 34.06 billion by 2030, fuelled by technological advancements and consumer preferences for ethical, cost-effective options.

The CVD lab-grown segment alone is anticipated to generate billions by 2030, reflecting the shift. Natural diamonds' recycled volume is forecasted to grow at about 2% CAGR through 2033, primarily from inheritance in mature markets, while the global diamond market aims for USD 139.91 billion by 2030 at 4.4% CAGR. These projections highlight a bifurcated market where lab-grown gems capture rapid growth, potentially eroding natural diamond shares unless producers like Zimbabwe adapt.

To survive and thrive in this era, Zimbabwe can implement multifaceted strategies to enhance its diamond industry, drawing from global best practices and addressing local challenges. Emphasising beneficiation, processing diamonds locally through cutting, polishing, and jewellery manufacturing could capture more value, as Botswana has done by mandating local processing, creating thousands of jobs and boosting GDP contributions.

Zimbabwe could expand its minimal beneficiation infrastructure, perhaps through incentives for ZCDC and partners like Alrosa to establish facilities, attracting investors with tax breaks on value-added exports. Second, marketing natural diamonds as premium, story-driven assets is key; Russia and De Beers promote rarity and heritage, countering lab-grown narratives. Zimbabwe might launch campaigns highlighting Marange's unique gems and ethical reforms to appeal to conscious consumers.

To attract investors, reforming fiscal policies like selectively reducing royalties for new projects or high-tech operations could help, mirroring Namibia's investor-friendly environment. Enhancing transparency via independent audits and blockchain tracing would build trust, addressing past leakages and drawing ethical funds.

Meanwhile, diversification within the sector, such as exploring industrial diamond applications in semiconductors and optics, aligns with global trends where lab-grown dominate but naturals hold niches. Zimbabwe could incentivize R&D partnerships, leveraging Alrosa's expertise.

Finally, regional alliances, like advocating for global labelling standards to distinguish naturals from lab-grown, could protect markets, inspired by G7 actions. By integrating these, Zimbabwe can position itself competitively, aiming to double output and revenue by 2030 amid global growth.

Therefore, while lab-grown diamonds pose an existential threat to natural producers, Zimbabwe's position as a top supplier, with stabilizing production and fiscal significance, offers opportunities for reinvention. Reducing taxes, easing regulations will deeply contribute to investing in beneficiation, marketing, fiscal reforms, diversification, community focus, and alliances, which can make Zimbabwe attract investors, stay afloat, and turn peril into prosperity.