Major world diamond trading group bans trade of Zimbabwe stones tainted by killings, abuses

World diamond trading group bans Zimbabwe stones

HARARE, Zimbabwe — In what’s being hailed as an unprecedented move that will boost buyer awareness of blood diamonds, a global diamond trading network vowed Monday to expel any member who knowingly trades gems from two Zimbabwe mines where laborers have been killed and children enslaved.

The announcement by the U.S.-based Rapaport Diamond Trading Network, an industry diamond price and information provider, comes after international regulators declared the stones from the Zimbabwe mines conflict-free, backing off a ban they imposed in November and allowing 900,000 carats of diamonds to be auctioned last week.

“This is the first time that we’ve heard of a large group like the Rapaport group actually taking such a strong stand,” said Tiseke Kasambala, a Zimbabwe specialist with Human Rights Watch.

“Consumers will certainly ask questions” about the stones they are buying, she added.

The international regulators, whose group is known as the Kimberley Process, said the two mines are operating at “minimum” international standards. The Rapaport group, though, said that does not guarantee the stones “free of human rights violations” and vowed to publish the names of members knowingly trading in diamonds from the diamond fields near the eastern city of Mutare.

Kimberley Process officials did not immediately respond to an e-mail seeking comment on the move by Rapaport, which has 10,000 members. Stephane Chardon, chairman of the group, noted that the Kimberley rules apply only to blood diamonds mined and sold by rebel movements or their allies to finance armed conflicts aimed at toppling legitimate governments. It has no provision for punishing governments.

Rapaport said respected human rights groups have documented severe abuses at Mutare diamond fields since their discovery in 2006 — one of the biggest diamond finds in southern Africa in a century. Those allegations include the killing of at least 214 allegedly illegal miners by the military and “rampant abuses of forced labor, child labor, beatings, smuggling and corruption.”

Chardon said last week the Kimberly Process deserves credit for the original ban on Marange diamonds and for ensuring that the two fenced-off mines are being properly run.

The Zimbabwe Ministry of Mines accuses human rights groups of “peddling falsehoods.” The auctioned diamonds are expected to provide millions of dollars in badly needed revenue for the southern African country, which is struggling to recover from years of economic ruin.

Robert Mhlanga, head of diamond mining holding company working alongside the government, told The Associated Press on Monday that offers were made at the first auction Aug. 11 for all 900,000 carats cleared for sale by the Kimberley Process.

Deals with some of the international buyers were completed and buyers left Harare in possession of batches of diamonds. Other deals are still being processed, he said.

A second auction is scheduled in September. Mhlanga said values of the diamonds are still being tallied.

The mines ministry first said it has about 4.4 million carats in storage and that they’re worth $1.9 billion — about one-third of the national debt or almost the government’s entire spending in the national budget.

The party of Prime Minister Morgan Tsvangirai, Zimbabwe’s former opposition leader now in a shaky coalition with longtime President Robert Mugabe, has cautioned against raising hopes of a rapid economic boom.

Finance Minister Tendai Biti, a close Tsvangirai aide, said estimates that last week’s first bids raked in $72 million were too optimistic. He told the state broadcaster the real amount appears closer to about $45 million, out of which just $15 million could end up in state coffers.

Mining experts also have cautioned that only 40 percent of the diamonds are gem quality, with the rest being industrial-quality stones. In any case, Zimbabwe would not be allowed to flood the world market and bring down global prices, they said.

Pearson Mungofa, a mining official in Tsvangirai’s party, said Zimbabwe lacks experience to identify the value of its diamonds and largely relies on “guesses and estimates,” leading to confusion surrounding the economic potential of the diamond reserves.