Zimbabwe diamonds- KP gives Zimbabwe-ZANU-PF- free reign!

The Kimberley Process Certification Scheme which is supposed to regulate the legal trade of rough diamonds may have inadvertently given Zimbabwe- or as most members claim president Robert Mugabe and his cronies- a free reign to sell Marange diamonds outside its system.

Diamond expert Chaim Even-Zohar says although the KP has effectively banned the sale of Marange diamonds there appears to be roaring business in these diamonds judging from the number of flights to and from Harare and Maputo.

Even-Zohar said the mines in Marange were producing between one million and 2.5 million carats every month. The figure of one million that he had mentioned at a mining Indaba in Cape Town recently was accurate as he had obtained it from Zimbabwe government officials.

Already there are squabbles over diamond revenues between Finance Minister Tendai Biti and the Zimbabwe Mining Development Corporation.  Biti says up to $300 million in revenue, a huge sum under the prevailing situation, cannot be accounted for.

The mines would be able to account for every carat and the revenue they make if they were under the KP system as they are required to file returns and get certificates for every diamond they produce and export.

So while some members of the KP have argued that the sale of Marange diamonds must be stopped because Robert Mugabe and his cronies in the Zimbabwe African National Union-Patriotic Front are the ones benefitting instead of the country, they could in fact have played into the hands of ZANU-PF.

The KP gave Zimbabwe the go-ahead to sell its diamonds from Marange on January 17 after a special resolution. Some of the terms were that:

Zimbabwe could not export its diamonds stockpiled between 2007-2009 as these were mined at the height of violence and lawlessness in Marange until full compliance with the Joint Work Plan;

The KP also included a “violence clause” that would trigger an immediate export ban if there were credible reports of new violence in Marange which were supported by three members of the KP Working Group.

Zimbabwe apparently turned down the conditional approval saying it wants to sell its diamonds without any pre-conditions because its mines have met the KP requirements.

Even-Zohar says what this means is that though Zimbabwe is not allowed to export its diamonds, there is no law barring it from selling the Marange diamonds in Zimbabwe and  buyers can smuggle them rough stones out.

“We are dealing with a system failure that turns otherwise legal transactions into illegal ones,” he argues. “Clearly the KPCS has failed to reach accommodation with the Zimbabwe government, and the current status quo is, to put it mildly, weird, absurd and unsustainable.”

“The KPCS has gone beyond its core mandate and created a mission impossible for industry. …It should be recognised that as soon as diamonds are unearthed, as soon as they have been released from billion-plus years of protection underground, as soon as these goods are ‘liberated’, they flow like water. No border, no regulations and no armies will stop their flow.”

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