By Terence Zimwara.
Zimbabwe. (News Of The South) – The Kimberly Process Certification Scheme (KPCS) compliance , a verification and cleansing scheme of the diamond industry has propelled Zimbabwe to become the sixth largest producer of rough diamonds in the world.
Zimbabwe’s diamond output rose to a peak of about 12 million carats in 2012. Zimbabwe’s share of African production stood at 15.2 percent by volume in 2013, and accounted for 8 percent of global output, making the country the world’s sixth largest producer.
Inevitably, Zimbabwe has become a key in an industry that has been riddled with conflict or the so called blood diamonds. Sierra Leone and Liberia as well as the Democratic Republic of Congo were guilty of spreading conflict diamonds prompting diamond moguls to launch the KPCS or simply the Kimberly Process.
The Kimberly Process was set up to ensure that diamond purchases were not financing violence by rebel movements and their allies seeking to undermine legitimate governments
The discovery of diamonds in Marange led to a mad diamond rush as ordinary people sought to escape economic recession by mining the commodity. In 2008 when the army moved in sealing off the area, there were reports of human rights abuses, a charge that the diamond industry would use to bar Marange diamonds.
Formal mining by companies only started 2009 following the government takeover of the mining claims.
However, as Eli Izhakoff honorary president of World Diamond Council (WDC) would confirm at the recent Zimbabwe Diamond Conference that, he at that time understood the significance of Zimbabwe as a future global player in the industry.
“In so many ways I feel that I have a personal stake in the future of the diamond industry in Zimbabwe – most probably because it was during my term as president of the World Diamond Council that the magnitude of this country’s potential as a diamond producer was fully understood, as were the possibilities that the diamond resource offered Zimbabwe and its people,” said Mr Izhakoff.
Subsequently, it was a WDC Annual Meeting in St. Petersburg in July 2010 that an agreement was reached that enabled the renewal of rough diamond exports from the Marange diamond fields.
Prior to this, governments and international institutions had sanctioned Zimbabwe from selling its diamonds on open markets.
Zimbabwe has always maintained that its diamonds were conflict free and that the banning of Marange diamonds was politically motivated.
Nonetheless the country agreed to subject itself to the Kimberley Process and in November 2011 it became KPCS compliant allowing it to sell its resource on the open market.
However, diamond industry players in Zimbabwe continue to cry foul charging that rules are created just to stifle the industry.
Robert Mhlanga, president of Mbada Diamonds a Zimbabwean producer of rough diamonds complained that his organisation continues to be unfairly targeted by the Office Foreign Assets Control (OFAC) of the United States.
Mbada Diamonds is on the sanctions list of OFAC and this makes it difficult for the company to use the international financial system to transact as doing so Mbada would risk having its money seized.
Izhakoff confirmed after the meeting that he had had meetings with OFAC about removing Zimbabwe on the sanctions list but he refused to discuss the progress insisting that it was a sensitive issue.
The European Union recently removed the country from sanctions allowing the Zimbabwe Mining Development Company to trade freely on the international market.
Additionally, Mhlanga complained that money belonging to diamond producers in Zimbabwe was seized in Antwerp. Initially, Amari Platinum Holdings Limited, which had a claim against the Zimbabwe government, won an injunction at the International Court of Arbitration to seize the cash.
When the Zimbabwean government won the appeal against the seizure, the money was seized again after a group of former white farmers initiated court action against the government over the loss of their farms. At the time of writing the case had not been resolved and the money had not been returned.
Mr Mhlanga likened the seizure to the high seas piracy and he urged industry leaders to help in depoliticizing the industry.
Meanwhile Professor Gundyanga, permanent secretary in the Ministry of Mines and Mining Development, said Zimbabwe has the potential to produce 25 percent of the world’s alluvial diamonds.
However this could only be realised once the marginalization of Zimbabwe by powerful organisations was ended. Zimbabwe remains underexplored due to factors like sanctions, lack of clarity on empowerment laws and the global disunity in the diamond industry.
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