January 5, 2007

Zimbabwe: World Diamond Council Probes “Smuggling” to South Africa

Text of report by Njabulo Ncube and Rangarirai Mberi entitled "Zimbabwe under probe" published by Zimbabwean newspaper Financial Gazette on 5 January; subheadings inserted editorially

Zimbabwe's diamond rush has prompted the World Diamond Council (WDC) to launch an international probe into allegations that the rough stones from this country are being smuggled into South Africa and blended with "blood diamonds" from the Democratic Republic of the Congo (DRCongo) for export.

It is understood that the WDC probe will focus on allegations that diamonds from River Ranch Mine, in which ZANU-PF [ Zimbabwe African National Union-Patriotic Front] bigwig, Solomon Mujuru, has a disputed stake, are being mixed with illicit diamonds from the Congo and sold validly on the world market under a Kimberley Process Certificate (KPC). The New York-based WDC regulates the global diamond market.

Risk of blacklisting

A couple of years ago, senior Zimbabwe government and army officials were named in a UN report as having profited from the looting of diamonds in the DRCongo during Zimbabwe's military involvement in the mineral-rich Congo.

The WDC's moves put Zimbabwe at great risk of being blacklisted as a source of legitimate diamonds. The country is a signatory to the Kimberley Process, established in 2002 to certify diamonds originating from sources that are free of conflict or rights abuses. A blanket ban on Zimbabwe's stones would hurt producers such as Murowa Diamonds and River Ranch itself.

Last year, Murowa, 22 per cent owned by Zimbabwe Stock Exchange- listed miner Rio Zim, produced 189,658 carats of diamonds in the nine months to September. In the 2006 third quarter, Murowa produced 56,660 carats. Although no official output data was available from River Ranch, the mine is understood to have the potential to earn 20m United States dollars in sales per year. Its plant, which can churn out 100 tons of ore an hour, is reputed to be 10 times larger than that of Murowa.

"Suspension" pending further scrutiny

While government claims to have thrown a tight security cordon around Marange and arrested up to 18,000 illegal miners in a bid to halt the booming trade in diamonds, the WDC says the illegal sale of diamonds is, in fact, increasing. WDC chairman, Eli Izhakoff, has now written to the incoming chair of the Kimberley Process, Karel Kovanda, expressing concern over the smuggling of rough diamonds from Marange and River Ranch, alleging the rough diamonds from these two areas of Zimbabwe were being combined with blood diamonds from the DRCongo for export. Izhakoff stressed that all rough diamond exports from Zimbabwe and the DRCongo should be suspended pending further scrutiny.

Said Izhakoff in a letter to Kovanda: "While remaining mindful of Zimbabwe's membership of Kimberley Process, such illegal exports present a clear threat to the integrity of the legitimate export process as a whole. In addition, we have heard that the River Ranch diamonds are being mixed with production from the DRCongo. We appeal to the chair and participant nations of the Kimberley Process to act swiftly and in unison, to resolve this situation and protect the legitimate and law-abiding industry."

The WDC said the governments of Zimbabwe, South Africa, and the DRCongo should ensure that illicit diamonds were not exported under the Kimberley Process Certificate Scheme.

He said: "In addition, we appeal to all rough diamond importing countries to carry out appropriate inspections of all parcels of rough diamonds emanating from Southern Africa to ensure that they do not contain Zimbabwean and Congolese production."

Kovanda, the new Kimberley Process boss, responded: "I fully agree that the situation in Zimbabwe needs to be carefully monitored, and that participants and observers must take further action to ensure that the Kimberley Process is not negatively affected by these events."

Fresh ammunition to EU critics in campaign for renewal of sanctions

Government sources said Zimbabwe informed the Kimberley Process Plenary Session in Gaborone, Botswana, last year of the problems it was facing in stemming the diamond rush in Marange. But the European Commission, the next chair of the Kimberley Process, has asked the Zimbabwean government for more frequent updates on the diamond saga.

Zimbabwean government officials now fear that this new probe will give its EU critics fresh ammunition in their campaign for the renewal of sanctions against members of President Robert Mugabe's regime. The EU decides on the sanctions early next month.

Herald columnist Nathaniel Manheru wrote at the weekend that if the WDC went ahead and recommended a diamond ban on Zimbabwe, "Europe will be happy to oblige and we are taught a year-long lesson."

(c) 2007 BBC Monitoring Africa. Provided by ProQuest Information and Learning. All rights Reserved.