The Zimbabwe Situation

By SARAH CHILDRESS

MANICA, Mozambique -- This dusty border town in southern Africa has become a major hub for trading rough diamonds, but there is a problem: Mozambique doesn't produce any of the sparkling stones.

The diamonds come from neighboring Zimbabwe, smuggled illegally along a pipeline that Mozambican officials say they are powerless to stop.

The Kimberley Process, an international regulatory body that polices the diamond trade, is set to decide Thursday at a meeting in Namibia whether to suspend Zimbabwe's membership, which allows it to certify that its diamonds are conflict-free. Earlier this year, its investigators documented human-rights abuses by the Zimbabwean military against diamond miners in some fields, which the military and government have denied.

If the group rules against Zimbabwe, the country will lose its Kimberley certification, an internationally recognized stamp of approval sought by middlemen, retailers and consumers as a way of avoiding so-called blood diamonds -- gems mined amid violence, sold to fund conflict, or both.

The rampant smuggling through Mozambique, however, could undermine any sanctions the Kimberley Process puts on Zimbabwe. And whether or not the group votes to sanction Zimbabwe, the smuggling route is complicating regional efforts to clean up the image of African diamonds.

Other nearby Kimberley Process members -- such as Botswana, South Africa and Namibia -- have been at pains to assure consumers that their own gems are conflict-free. Smuggled Zimbabwean stones can be sold as if they came from some of these neighbors, confusing buyers who might stay away from Zimbabwean stones no matter what Kimberley officials rule this week.

Murisi Zwizwai, Zimbabwe's deputy mining minister, declined to comment on allegations made by the Kimberley Process, including complicity in the smuggling trade. He said the government would respond to the charges at this week's Kimberley meeting. "Our diamonds are not blood diamonds," he said.

Starting late last year, the Zimbabwean military and police moved into diamond fields near the Mozambican border. Zimbabwe said the operation was aimed at relocating hundreds of thousands of artisan miners who had swarmed the region.

But human-rights groups said the authorities forced miners to dig for the benefit of senior government officials or military commanders under the threat of violence, allegations the government has denied.

Many of these stones are smuggled across the border, Mozambican officials say. Here, middlemen resell them to dealers, who then ship them out of Mozambique to be cut, polished and sold on the world market.

It is difficult to know how many diamonds are being smuggled through Mozambique. Kimberley Process investigators said that according to government statistics, 59% of Zimbabwe's production in 2008 wasn't exported through official channels.

Pedro Jemusse, a Mozambique district police spokesman in the provincial capital of Chimoio, about an hour away from Manica, said it is hard to crack down on the trade because foreign buyers usually have appropriate immigration papers, and it is difficult to catch smugglers in the act.

Mr. Jemusse also acknowledges police and border guards can be bribed. The first point of sale for rough Zimbabwean diamonds is Manica, according to interviews with the Mozambican government, police and border officials, as well as some diamond buyers.

Diamond traders from Lebanon, Israel, Somalia and West African nations like Nigeria and Guinea have flocked to the town, dotted with traditional mud-and-stick homes. Driving shiny new cars, they rent elaborate, freshly constructed houses, painted in pastels.

Zimbabweans and Mozambicans carry rough stones across the border checkpoint near Manica. They hide them in their mouths or in bandages wrapped around their legs.

One Mozambican man who lives in Zimbabwe said he walks across the border nearly every day, introducing Zimbabwean diamond sellers to mostly Lebanese buyers, who wait on the shaded terrace of the Flamingo Restaurante and Bar. Marked by a giant white flamingo signboard along one of Manica's main streets, it is one the town's best-known spots for meeting black-market diamond dealers.

On a recent afternoon, several men gathered around a plastic lawn table at another fixture of the smuggling route, the Manica Lodge, holding up stones to the light. Deals range from a paltry $1 a carat to $3,000 or $4,000 a carat for a good stone. One buyer said that they can make as much as $100,000 a month in the trade here.

Around midnight on a recent Friday at Coquiero, a popular nightclub outside town, three locally well-known Lebanese diamond buyers settled into the red couches in the VIP lounge, mixing vodka tonics from a bottle of Smirnoff on the mirrored tabletop. They scrolled through their BlackBerrys as they checked out girls on the dance floor.

One of the buyers told a reporter that he and his companions had been buying diamonds for the past one or two years, but said they weren't doing anything wrong. "I'm just trying to make a living," he said.

—Farai Mutsaka in Harare contributed to this article.

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