The Zimbabwe Consolidated Diamond Company posted a profit of US$26,35 million on production of 151,3kg of diamonds for the first half of this year, with profits being just over 40 percent of the diamonds sold.
According to a report to Parliament, the company made a profit of US$26 356 890 and states that it is on course to meet its year-end target of a profit of US$62 119 436.
While the company significantly missed its half-year production target, producing just 756 518 carats (151,3kg) against a target of 1 151 500 carats (230,3kg), it was helped by better than expected prices, receiving an average of US$85,6 for each carat against an expected price of US$68,3.
The company expects to produce 3 044 050 carats (608,81kg) by year end.
Sales of diamonds in the six months brought in US$64 770 207, against a target of US$78 650 000, so the expenses and costs totalled just over US$38,4 million, or just under 60 percent of the revenue.
The company said it had inherited legacy debts from companies that were merged into it when it was formed in 2015 after the Government consolidated all the diamond mining concessions in Chiadzwa, Manicaland.
The company also responded in its report to queries raised by Auditor General Mrs Mildred Chiri in her 2019 report on the company’s inherited debts and its management of these debts.
She said the company did not account for inter-related party debts and investments.
The diamond company replied: “Consolidation of mining concessions in Chiadzwa resulted in some financial obligations being transferred onto the ZCDC balance sheet from former mining companies in which Government had an interest through Zimbabwe Mining Development Corporation, eg DMC and Marange.
“ZCDC has created a provision for all the doubtful debts owed by related parties, while a comprehensive debt management framework is being worked on, through the Ministry of Mines and Mining Development,” ZCDC said.
The company has engaged an independent firm to do a business
valuation of its investment in DTZ-Ozgeo to achieve a true and fair position.
Leakages, basically theft and poaching of diamonds, is being tackled through a number of measures, said the company.
Last year ZCDC commissioned a security optimisation exercise aimed at enhancing product security across the entire value chain.
A surveillance point has been set up at the company’s head office and the head office of the Ministry of Mines and Mining Development while efforts are underway to open another surveillance point at National Joint Operations Command and the Office of the President and Cabinet so more entities can check and monitor the entire chain.
The company had procured long range drones to upgrade security around the mine.