Business, Economics and Jobs

Zimbabwe's diamonds mired in controversy


Zimbabwe's controversial diamonds are criticized by human rights groups as blood diamonds and it is argued the gemstones should not be sold on international markets.


Paul O'Driscoll

BOSTON — Diamonds are a dictator's best friend - but blood diamonds do not reflect well on anyone.

Zimbabwe's glittering gemstones are once again besmirched in controversy.

The Kimberley Process has cleared diamonds mined in Zimbabwe's eastern Marange Valley for international sales. But the Diamond Mining Council and the United States have urged international markets not to buy the Zimbabwe diamonds citing evidence of human rights abuses and allegations that the funds raised by the gemstones go to President Robert Mugabe's ruling clique, and do not benefit the majority of Zimbabwe's people.

A lot is at stake because Zimbabwe's diamond production is estimated to be worth $1.7 billion annually.

Discovered in 2006, the unexpectedly rich diamond deposit in the Chiadzwa area of Marange Valley has been a surprise windfall for President Robert Mugabe. Since then the diamond field has been mired in violence, blood and controversy.

Marange Valley is a 46 square mile area of river silt where the multinational diamond giant De Beers once owned the mining rights. Worried by Zimbabwe's political and economic crisis, and not seeing significant deposits, De Beers let its mining rights lapse. A British firm, African Consolidated Resources, bought the mining rights but had not begun exploiting the area.

That was when Zimbabwe's economic collapse was at its worst, hyperinflation had taken hold, food shortages were widespread and hunger stalked the nation. Desperate local peasants began digging in the area and grabbing diamonds by the fistful. Quickly the Chiadzwa fields were overrun by some 20,000 Zimbabweans who dug up the earth with their bare hands, picks and shovels.

A diamond rush quickly took hold and Lebanese, Israeli, Chinese, Indian and Belgian traders set up shop in the eastern border town of Mutare to buy the gemstones from the peasant farmers. Others smuggled the diamonds to Mozambique and South Africa in order to sell them for foreign currency.

African Consolidated Resources asked the government for protection. Mugabe sent in the army which seized control of the diamond fields. More than 200 Zimbabweans were killed, according to Human Rights Watch. The army took over the mining, kicking out African Consolidated and forcing hundreds of Zimbabweans to dig for the mines in dangerous conditions akin to slave labor, according to reports. Human Rights Watch publicly urged Tiffany, Cartier, Zale and other major retailers to refuse to sell Zimbabwe's diamonds.

More recently mining rights have been granted to Zimbabwean companies with ties to Mugabe's Zanu-PF party and the diamonds are sold to international buyers through the state marketing firm, the Zimbabwe Mining Development Corporation. Grace Mugabe has been named a shareholder in Mbada Diamonds, one of the two companies registered by Mines Minister Ober Mpofu to operate in the Marange fields. There is big money at stake. The state has a stockpile of 4.6 million carats of diamonds worth nearly $2 billion, according to reports. This has given Mugabe a new source of wealth for his patronage network and new funds for him to use for repression and often violent campaigning, according to human rights groups.

The South African-based Kimberley Process was established to prevent trade in "blood diamonds" that fuel conflict and bad governance. Last year the South African official running the Kimberley Process certified a portion of Zimbabwe's diamonds as OK for international trade in two monitored auctions. That move was seen by many as support from the South African ANC government to Mugabe's Zanu-PF government. Mugabe quickly sold off a pile of the gems.

Now the new Kimberly Process chairman, who is from the Democratic Republic of Congo, has given Zimbabwe's diamonds a clean report and said more diamonds can be sold on the international market. Kimberly Process chairman Mathieu Yamba said exports from the two "compliant" mining firms in Chiadzwa could resume "with immediate effect," according to the U.S. based Rapaport Diamond Trading Network (RapNet).

But Tuesday the World Diamond Council (WDC) stated it disagrees with the Kimberley Process clearance and has urged all international diamond dealers not to trade in stones from Zimbabwe's controversial Chiadzwa diamond fields, until their legal trade status has been clarified.

The WDC said it "understands that a number of KP participant countries, including the United States, Canada, Israel and the European Union are seeking clarity on procedural issues surrounding this release and have indicated that exports should not be permitted until these issues have been explained and resolved.

"While the World Diamond Council welcomes and applauds Mr.Yamba's efforts to bring an end to the apparent impasse that currently exists regarding the status of production and stocks from (Chiadzwa), the WDC advises members of the international diamond industry to refrain from trading in and exporting goods from the region, until the situation and the status of these goods becomes clearer," stated the WDC.

The United States has objected to Yamba's decision to allow the exports. U.S. representatives have apparently sent a note to Kimberley Process officials in India and the United Arab Emirates stating that it would view any shipments from Zimbabwe as non-compliant. The U.S. has also warned that it would publish the names of companies taking delivery of the diamonds on the State Department website to ensure that all American companies are aware of potentially non-compliant goods.

Zimbabwean author Douglas Rogers has written about the saga of the diamonds in "The Last Resort," a book about his parents' backpackers lodge in the Marange Valley and how it was overtaken by the diamond rush.

Canadian mining expert Ian Smillie, a designer of the Kimberley Process, said he is dismayed that Zimbabwe's diamonds have been certified for international sales, according to Fred Brigland, writing in The Herald of Scotland.

"They are blood diamonds," said Smillie. "They have blood all over them."