Africa

Zimbabwe diamonds row far from over

  • 16 July 2010
  • From the section Africa
Groups of miners in the diamond fields in Marange (Archive photo)
The Marange diamond fields are among the most lucrative in the world

The agreement made in St Petersburg is seen as a useful stop-gap by many who have watched the twists and turns of Zimbabwe's complex diamond debate.

Mines Minister Obert Mpofu has pledged to the Zimbabwean people that he "means business" and he will not let them down. But it is far from being the end of the story.

Both sides have been forced to compromise, but in the face of accusations of human rights abuses, how watertight is it?

That will only become apparent in the months ahead but it is a step in the right direction.

After deadlocked talks last month in Israel and sabre-rattling from the Zimbabwean government - which threatened to release some of a $1.7bn (£1.1bn) stockpile of Marange diamonds on to the market - the temperature has been turned down by this deal.

The agreement relates to exports from the two mining concessions that operate in the Marange area - Mbada and Canadile. The area is considered one of the richest diamond fields in the world.

A representative from Canadile was overheard on a flight declaring himself to be "thrilled" by the decision. He praised Zimbabwe for its "transparency on this issue of the Marange mines".

Given that campaign groups have raised questions about the alleged murky nature of how these joint venture firms were established in the first place, some might see things differently.

What the St Petersburg agreement does is to impose restrictions on the two joint venture operations, subjecting them to monitoring and audit to ensure they comply with the minimum standards of the Kimberley Process.

'Diamond smuggling'

What it does not do is address other burning issues such as alleged diamond smuggling and the much publicised requests for further mining concessions by other companies wishing to operate in the fertile Marange fields. One of the firms seeking a concession is reportedly run by senior figures from the police.

In practice the Kimberley Process's monitor and its much more potent review team will be allowed to come into Zimbabwe and monitor the diamond concessions as part of a set of pre-arranged visits.

If violations are found - and the Zimbabwean government has challenged human rights groups to provide evidence of abuses - then in theory it can impose an export ban once more.

According to the campaign group Global Witness the deal "links continued exports of diamonds to progress on the ground in Marange" so what happens in the long term is crucial.

Perhaps surprisingly, praise for the agreement has come from an unusual quarter.

Zimbabwean miners
Zimbabwe's diamonds could bring the country huge wealth

The Marange mines are at the centre of an ownership dispute with a company registered on the London Stock Exchange called African Consolidated Resources (ACR).

Its CEO, Andrew Cranswick, said he welcomed the lifting of the Kimberley Process ban but the company reserved the right "to continue to pursue legal action over the ownership of the resources".

It is perhaps a statement borne out of pragmatism rather than emotion. The mining areas claimed by ACR are being mined by the two mining concessions already mentioned.

A supreme court ruling has said that diamonds from this site should be kept in the reserve bank until the dispute is settled.

But in parliament early this week Finance Minister Tendai Biti said that Zimbabwe had sold $30m (£19.6m) worth of diamonds from the Marange fields, which neither the treasury nor the revenue authority had any knowledge of.

The haemorrhaging of diamonds out of the country or into the pockets of individuals represents a huge lost opportunity for Zimbabwe.

Its coalition government urgently wants the proceeds from diamond exports to help economic recovery in the country.

It looks to Botswana as a model where tax revenues from diamond sales have helped to build hospitals and schools. It remains to be seen how much the deal signed in St Petersburg will help to fulfil that dream.

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