New Marange row erupts

Also in dispute is the value of the auctioned diamonds, with various

figures thrown around ranging from US$72 million to US$250 million.

Zimbabwe began selling its stockpiled rough diamonds from the Marange

fields last week after nearly a year during which the country was not

allowed to sale gems from the controversial area where soldiers have

been accused of human rights abuses.

But a political row has broken out over the diamond revenue amid

reports that Finance Minister Tendai Biti wants net revenue from the

sale deposited with the Treasury.

Sources said Biti has clashed with Mines Minister Obert Mpofu over who

should be the custodian of the diamond process.

Biti wants the state-owned Zimbabwe Mining Development Corporation to

pay all its net revenue to the Treasury while Mpofu is adamant that

the ZMDC should retain the net proceeds from the Marange sales and

only pay annual dividends to the government, one source said.

The row comes barely a month after Biti made a passionate plea for the

diamond industry watchdog Kimberley Process to allow Zimbabwe to

resume exports of rough gems from the Marange area, arguing that the

cash-strapped Harare government desperately needed the money in order

to balance its books.

The Movement for Democratic Change secretary general spoke of a

government consensus to takeover all the alluvial diamond mining in

the country.

The move to centralise control of the diamond funds comes in the wake

of claims by Biti who said in his mid-year budget review that the

government could not account for US$30 million earned from exports of

the Marange diamonds last year.

Human rights organisations accuse the countrys army of abuses against

hundreds of illegal miners who descended on Marange and have said no

diamonds from the fields should be sold until rights issues are

addressed.

Diamond sales from the field in eastern Zimbabwe were suspended in

November 2008 after accusations by human rights organisations of

killings and brutality by the Zimbabwe security forces that were sent

to clamp down on smuggling and illegal sales.

The value of the gems is also in dispute.

Prime Minister Morgan Tsvangirai and KP monitor for Zimbabwe Abbey

Chikane put the value of last Wednesdays sale at US$72 million while

Mpofu said auction brought in about US$250 million.

Analysts said even the US$72 million figure was an exaggeration for

the gems sold, translating to an average of US$82 per carat.

They said the Marange diamonds are estimated to be worth about half

that, averaging US$35-US$50 per carat.

Meanwhile an international network of diamond buyers and suppliers has

advised its members to boycott diamonds from Zimbabwes Marange

fields, threatening to expel and blacklist anyone who violated the ban

on trading in gems from the controversial area.

The New York-based Rapaport Diamond Trading Network said although

trading of Marange diamonds may be legal in certain countries,

companies owning or selling the diamonds are prohibited by US,

European Union and United Kingdom governments and their trading may

be illegal by citizens of these countries.

Rapaport strongly advises all diamond buyers not to trade in KP

certified Marange diamonds and to request written assurance from their

suppliers that their diamonds have not been sourced from Marange, the

group said in a statement.

According to Rapaport, the KP does not have a mandate to deny its

certification for diamonds involved in human rights violations and,

therefore, there was no guarantee that Marange diamonds with KP

certification are free of human rights violations.

RapNet, the Rapaport Diamond Trading Network, will not allow the

trading of any diamonds sourced from Marange, Zimbabwe. Members found

to have knowingly offered Marange diamonds for sale on RapNet will be

expelled and their names will be publicly communicated, the statement

said.