Zimbabwe resumes sale of controversial Chiadzwa diamonds

HARARE - Zimbabwe’s cash-strapped government began Wednesday selling off stocks of rough diamonds extracted from its eastern Chiadzwa fields, where human rights abuses have seen the gems tarred with the “blood diamond” brush.

An auction of nearly one million carats of diamonds got underway at Harare International Airport after Zimbabwe was cleared by the Kimberley Process (KP) to resume its diamond exports.

The Kimberley Process is an international certification body set up to curb trade in diamonds used to fund conflicts.

Mining Minister Obert Mpofu first announced that Zimbabwe’s entire stock of 4.5 million carats was for sale.

But the head of the KP mission in Zimbabwe Abbey Chikane said he had not certified all the gems and that only diamonds mined since May could change hands.

“Slightly below a million carats will be sold today while the rest await my signature and that of auditors,” he told DPA.

The KP last year ordered Zimbabwe to suspend its diamond exports over reports of gross human rights abuses by the army against small-scale miners and residents in Chiadzwa but since cleared two consignments for sale.

Wednesday, Zimbabwe signed an agreement with the KP allowing it to fully resume exporting diamonds that were mined under KP supervision.

Directly afterwards, the auction, which drew buyers from the United States, Israel, Lebanon, Russia and India, got underway behind closed doors in a vault.

Mpofu told DPA the sale could fetch up to $1.7 billion - over half Zimbabwe’s annual budget. That figure was based on a sale of 4.5 million carats.

But Prime Minister Morgan Tsvangirai, who heads a power-sharing government with President Robert Mugabe, warned against overstating the country’s diamond wealth.

While the proceeds “should benefit the generality of Zimbabweans through the fiscus and boost liquidity levels in the country” such estimates were exaggerated, he said.

“I’ve heard and read of billions of dollars coming from today’s sales. Please let’s be realistic. Let’s not create high expectations for our people,” Tsvangirai cautioned.

Mpofu’s estimate would work out to Zimbabwe receiving around $377 per carat.

While labelling the gems high-quality the KP’s Chikane told DPA they were more likely to fetch up to $80 a carat.

There are conflicting reports on the quality of the alluvial diamonds found in the large field.

Some experts have labelled it the biggest find in a century.

But Craig Smith, managing director of the Geological Society of South Africa was sceptical: “The diamonds themselves tend to be large in size but you have to cut away a lot to make them into something like a ring,” he told DPA.

The KP took action against Zimbabwe last year following a brutal crackdown by the army against thousands of illegal diamond diggers in Chiadzwa in late 2008, when Mugabe’s Zanu-PF still had a monopoly on power.

New York-based rights watchdog Human Rights Watch says scores of people were killed and injured by the army, who then took control of the fields and, by Zanu-PF’s own admission, used the opportunity to line its own pockets.

Since then Zimbabwe has reduced the army’s presence and licensed two little-known South African companies to mine the diamonds in a joint venture with the state Zimbabwe Diamond Mining Corporation.

A KP team led by Chikane visited the area again Monday and Tuesday to confirm whether the abuses had halted.

“The army and police remain there,” Chikane said.

“The KP will have to bring the issue of human rights to its logical conclusion, hopefully when it meets in November,” he said.

Tainted diamonds have come under the spotlight at the trial in The Hague of former Liberian warlord Charles Taylor, who is accused of having received blood diamonds from Sierra Leone in return for supporting rebels in that country’s brutal civil war.

Zimbabwe has always insisted its Chiadzwa diamonds cannot be classified as blood diamonds because the country is not at war.

Human rights activists say the term should be expanded to include diamonds mined in conditions of gross human rights abuses.