Zim diamonds in European auction as local market crumbles

via Zim diamonds in European auction as local market crumbles | SW Radio Africa by Alex Bell  December 11, 2013  

A 300,000 carat stockpile of Zimbabwe’s diamonds said to have been auctioned in Belgium on Wednesday, as the local market faces a serious crisis.

The auction, the first of Zimbabwe’s diamonds in Europe, follows a decision by the European Union (EU) earlier this year to remove the state run Zimbabwe Mining Development Corporation (ZMDC) from its list of targeted restrictions.

The move, which was a result of serious pressure from Belgium, paved the way for the diamonds to be sold in Europe, despite concerns of a lack of transparency in the domestic sector.

The Antwerp World Diamond Centre said the auction of the 300,000 carats of diamonds would increase transparency in Zimbabwe’s industry.

“Antwerp is convinced that the combination of solid transparency, accountability and potentially increased mining revenues will contribute to a sustainable social and economic development of Zimbabwe,” the Centre said ahead of the auction.

A lack of clarity over where diamond profits over recent years has gone has been a major cloud hanging over the diamond trade, along with unresolved human rights concerns.

Over 200 diamond panners were shot and killed by army officers after a government-sponsored military crackdown on the diamond fields in 2008. The deaths were never investigated.

At the same time, profits from the illicit sale of diamonds are said to be supporting the ZANU PF regime and its grip on power. As Finance Minister since 2009, the MDC-T’s Tendai Biti repeatedly stated that almost no revenues were being received from diamond sales, despite the government being a joint venture partner in mining activities.

Tafadzwa Kuvheya, from the Centre for Natural Resource Governance in Zimbabwe, told SW Radio Africa that nothing has changed and there is still no transparency in the sector.

“We have seen a diamonds policy being put forward and a draft minerals policy, but nothing has been implemented…we have nothing against the diamonds being sold, but issues of accountability and transparency must be addressed,” Kuvheya said.

The sale comes as some mining firms in the Marange region have started retrenching their workers, citing ‘viability’ challenges.

A Bloomberg news report on Wednesday quoted an official from the Chinese run Anjin firm, which has announced that 190 workers (almost a quarter of its workforce) were being dismissed. Director Munyaradzi Machacha was quoted as saying that a fall in diamond prices was a main reason, along with a move from alluvial to underground mining.

This news follows the decision by another Chinese run firm in Marange, Jinan Mining (Pvt), which has retrenched over 30 contract workers.

Firms in Marange have warned that alluvial deposits are running low, and that extracting more diamonds would mean switching to the more expensive and more technical, hard-rock mining techniques.