Where did the US$140 million come from?
The Auditor-General’s report does not mention any US$140 million diamond loss or theft. It is not exactly clear how the widely reported US$140 million figure comes about, but it appears to have been calculated using a sentence in the Auditor-General’s report on the Minerals Marketing Corporation of Zimbabwe’s (MMCZ) financial report for 2019.
The MMCZ is a statutory body that is the sole marketing and selling agent for all minerals, except gold and silver, which also controls and regulates the stockpiling of minerals, including diamonds.
“The Corporation (MMCZ) could not account for five (5) carat diamonds worth USD2 075 belonging to a producer which went missing during a weight verification exercise,” the report says. One reading of this unclear sentence could yield a price of US$400 per carat.
Multiplied by the 350,000 carats or the purported “lost” diamonds, this price produces the reported US$140 million.
This price significantly overvalues ZCDC diamonds, which, according to the company’s latest available financial statement, average US$62 per carat. This is in line with the Kimberley Process Certification Scheme’s US$67/carat valuation for Zimbabwean rough diamonds. ZCDC realised US$21 million from the sale of 340,000 carats in 2018.
Industry experts say diamonds from Marange are mostly course, low quality stones, with only about 10% being gem quality stones.
In contrast, the privately-owned Murowa Diamonds, which produces predominantly white, gem-quality diamonds, has realised prices in the US$112-US$122/carat range.
According to Kimberley Process data for the pre-COVID-19 year, industry leaders such as Angola realised US$138 per carat from their production, Botswana pulled in US$145/ct, Lesotho (US$260/ct), Namibia (US$500/ct), South Africa (US$121/ct) and Russia (US$91/ct).
Reports that the Auditor-General has reported that diamonds worth US$140 million “vanished” or were stolen from the Zimbabwe Consolidated Diamond Company are false. Reports to that effect arose from a misinterpretation of the 2019 Auditor-General’s report.