The
World Federation of Diamond Bourses (WFDB) has called for a ban on
trade in Zimbabwean diamonds, alleging that the process is funding
"human-rights violations" by Robert Mugabe’s government. The WFDB is
not alone in its concerns: the EU has called for an investigation by
the Kimberley Processthe international certification scheme that seeks
to ensure that diamonds do not fund conflictand has expressed concern
that the Mugabe government is receiving financial support from dealings
in "illicit" diamonds.
The calls cast further doubt on claims by the
Reserve Bank of Zimbabwe (RBZ) that the country is capable of producing
and exporting US$1.2bn of diamonds a month. The RBZ governor's own
export figures put diamond sales over the past four years at US$31m
annually, halving from a peak of US$44m in 2005 to US$22.6m last year,
and the claimed totals would in fact exceed total global output (valued
at US$12.1bn a year).
The basis for the central bank’s extravagant
claim, and the focus of the EU/WFDB concern, would appear to be the
same: production from the controversial Marange/Chiadzya diamond fields
in eastern Zimbabwe. These depositswhose size and output are
unknownwere originally discovered by Kimberlithic Searches, the
Zimbabwean exploration arm of the world's main diamond-producing
company, De Beers. The De Beers concession, first granted in 1980,
expired in 2006 when the claim was acquired by a UK-based firm, African
Consolidated Resources (ACR), which started mining in December 2006,
only to be immediately shut down by the Zimbabwean government. A court
order won by ACR nullifying the state takeover was overruled by the
mines minister, and the Zimbabwe Mining Development Corporation (ZMDC)
took over the diamond properties, producing an estimated US$15m-worth
of stones in 2007.
Diamond rush
However, a diamond rush
started in September 2006 and accelerated after the state moved in, so
that by mid-December an estimated 15,000-20,000 "illegal" artisanal
miners were working the alluvial deposits. Police and army units were
deployed and the miners driven out, meaning that by mid-2007 there was
little evidence of mining other than by the ZMDC. Subsequently, Air
Marshall Perence Shiriformerly commander of the North Korean-trained
Fifth Brigade, used by the Mugabe government to crush so-called Ndebele
dissidents in the west of the country in the early 1980sbecame
involved in mining at Marange.
Late last year there were reports of
scores of miners being shot dead by security forces and a report
released earlier this year by Partnership Africa Canada (PAC) says that
by January 2009 the diamond fields resembled a military garrison. The
PAC believes that the mines are being worked by soldiers and villagers
from Marange press-ganged into service by the authorities.
Kimberley "isn’t helping"
The
PAC is also highly critical of the "failure" of the Kimberley Process
to investigate Zimbabwe’s diamond industry. Some Process members argue
that it is not a human-rights organisation and accordingly there has
been no discussion of Zimbabwe's exclusion from the agreement.
However,
critics have concluded that Zimbabwe's diamond industry is "out of
control". Mr Mugabe's government has been accused of expropriating
diamond properties and companies without due process, awarding prizes
to "cronies" in the ruling party and the military, and using "brute
force" to clear the diamond fields. The WFDB, donors and
non-governmental organisations like PAC are likely to keep up the
pressure on the government to come clean about the Marange fields and
to restore the properties of the mining companies that have been
dispossessed. This suggests that the central bank’s stated hope of
arranging joint ventures between international mining groups and the
ZMDC, and so massively boosting Zimbabwean diamond earnings, look
remote, especially given the drastic decline in the global diamond
industry over the past six months.
The Economist Intelligence Unit
Post published in: Economy