SW Radio Africa (London)

23 July 2010

Zimbabwe: Legal Owner of Chiadzwa Mining Site Says Diamond Sales Unlawful

The London based mining firm at the centre of the ongoing Chiadzwa diamond field ownership wrangle, has said this week that the planned sale of the controversial stones from the site is unlawful.

Africa Consolidated Resources (ACR) has warned potential international buyers not to buy diamonds from the firms currently mining the Chiadzwa alluvial fields, in partnership with a mining parastatal.

ACR's CEO Andrew Cranswick told SW Radio Africa on Friday that all mining activities at the site since September last year have been done in contravention of High Court and Supreme Court orders, and is criminal and punishable.

"Any activity on the site since September 2009, apart from securing and guarding, is in contempt of court and criminal," Cranswick explained.

ACR, which holds the legal title to the Chiadzwa claim, was forced off the site at gunpoint in 2006 and has been fighting a protracted legal battle ever since to resume its operations. The state owned Zimbabwe Mining Development Corporation (ZMDC) moved onto the site and entered into a joint venture agreement, without Cabinet approval, with two mining firms, Mbada Mining and Canadile Mining. ACR was subsequently awarded a High Court order confirming their legal rights to mine the claim, but that order was ignored.

The fight for control of the Chiadzwa claim continued to heat up and in February this year, the Supreme Court ordered that all mining at the site be suspended, until the issue was sorted out. Cranswick explained that this has also been ignored and warned that "everyone involved in mining since that order was made will face prosecution for this criminal behaviour."

Zimbabwe's government has reportedly been in a celebratory mood after being given the green light to start selling a multi million dollar stockpile of rough diamonds from Chiadzwa. Last week, the international diamond trade monitor, the Kimberley Process, thrashed out an agreement with the Mines Ministry, which will let the country export the stones while agreeing to a strict regime of monitoring and supervision.

Under the terms of the agreement, Zimbabwe will be allowed to export a limited number of diamonds produced since May from two mining sites at Chiadzwa. At the same time a Kimberley Process Review Mission will visit the country to assess conditions in the region and compliance with the minimum trade standards. Zimbabwe will be able to export one more batch of diamonds at the start of September, but any exports after that will be dependent on measurable improvements at the diamond fields.

Cranswick said on Friday that the agreement worked out last week by the Kimberley Process has no authority over the orders of Zimbabwe's Supreme Court, explaining that "they have given the green light to certify the stones as conflict free, not the green light for exports." He explained that such certification "does not guarantee the goods to be legal or not stolen, as they are in this case."

The planned diamond sales would be a welcome boost to the failing economy if the right measures are in place to ensure that profits are steered towards the Treasury. Quite how this will be done is still being debated, after Finance Minister Tendai Biti proposed a future 'Diamond Act' to curb diamond-sale corruption. Biti announced last week that no profits from diamond sales have been seen by the Treasury since the ZMDC took over ACR's claim, despite an estimated $30 million in diamonds being illegally exported in the past year.

ACR has since proposed that it will not stand in the way of the diamond stockpile being sold, if the process is 100% transparent, does not involve the companies illegally occupying Chiadzwa or the parastatal ZMDC, and is approved by the Supreme Court. Cranswick explained that another condition would be to ensure that 100% of the profits go into the economy, and not the pockets of the ZMDC, Mbada or Canadile.

"For money to flow to people who have been committing a crime is wrong, it's internationally wrong," Cranswick said. "The people who buy the diamonds without our approval and the approval of the Supreme Court will be called to pay us back or return the stones."

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