European bank insists it is not boycotting Zim diamonds

eu_flagA European banking group that has previously stated its refusal to finance diamond transactions with Zimbabwe has now insisted it is not boycotting the countrys stones.

The bank, ABN Amro, said during a mining conference earlier this month that it would not deal with Zimbabwe or its diamonds, citing concerns about its reputation. Both Victor van der Kwast, a senior ABN Amro official and Pierre de Bosscher from the Antwerp Diamond Bank, made it clear that reputational issues stood in the way of their banks involvement with Zimbabwe.

De Bosscher stated that ethical standards must improve, and that we will not finance diamond transactions with Zimbabwe while it is still on the OFAC (European sanctions) list, under an EU trade embargo as well as a number of other such issues. He went on to say: We are not willing to even finance roundabout transactions in South African rands or Hong Kong dollars, because this isnt good for the transparency of the industry.

But ABN Amros van der Kwast has this week moved to clarify his position, telling an Indian newspaper that it was not boycotting Zimbabwes diamonds ABN Amro would like to help Zimbabwe mine its rich mineral and diamond resources, Van Der Kwast told the Times of India. But since the bank is based in Europe, it has to follow European regulations and comply with the EU sanctions currently in place against trading in Zimbabwean diamonds.

Van Der Kwasts clarification comes after a new Indian rough diamond sourcing consortium Surat Rough Diamond Sourcing India Ltd (SRDSIL) entered into an agreement with Zimbabwes government to train Zimbabweans in diamond cutting and polishing in exchange for a direct supply of rough diamonds. The deal is worth US$100 million in rough Zimbabwe diamonds a month to India, but Deputy Minister of Mines Chimanikire said Monday that the deal did not reflect government policy and that diamonds auctions will go ahead as normal.

International diamond dealers have been warned against dealing with diamonds mined in Zimbabwe, because the mining parastatal involved in plundering the natural resource is still on both European and US sanctions lists. The US based Rapaport Diamond Trading Network (RapNet) has cautioned its members against trading in stones mined from the Chiadzwa diamond fields, partly because of this involvement.

The parastatal Zimbabwe Mining Development Corporation (ZMDC) took over Chiadzwa in 2006, after the legal title holder, London based African Consolidated Resources (ACR), was forced off the claim at gunpoint. In 2009 the ZMDC joined forces with two South African owned entities to mine the alluvial fields, in a partnership that will see the ZMDC take 50% of the diamond profits. But the ZMDC is still listed on the targeted sanctions lists of both the US and EU and, legally, American and European diamond groups are restricted from dealing with the ZMDC.

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