3 December 2012

Zimbabwe: Diamonds Sale Clearance - Sanctions Have to Go First

The news last Thursday that the Kimberly Process Certification Scheme finally cleared the Marange diamonds and allowed unhindered international export is a welcome development. Does it mean Zimbabweans will now start benefiting from the export of the gems?

The answer might be yes, but those benefits will only accrue if the illegal sanctions are removed unconditionally.

Surely, it is a major victory for the nation's quest to harness the precious gems for the benefit of Zimbabweans.

Zimbabweans have for a long time, been wallowing in poverty, while millions of carats are pilling up in warehouses.

The four companies mining diamonds in Marange were not allowed to export the gems and had to wait for the green light from the KPCS appointed monitors Mr Abbey Chikane and Mr Mark Van Bockstael.

The developments in Washington DC last week mean Government will now sign Marange export certificates without having to consult Mr Chikane and/or Mr Van Bockstael.

Mines and Mining Development Minister Obert Mpofu has been telling the world that the Government has been transparent and accountable by ensuring that 15 percent of royalties in Marange were directly channelled to the Zimbabwe Revenue Authority.

As the KPCS's intercessory meeting ended, Minister Mpofu said; "We stuck to principle and we won. Zimbabwe can achieve its economic development objectives through the unencumbered exploitation of resources.

"I commend the Zimbabwean team here, including our Attorney-General Johannes Tomana, for a job well done. More importantly, I thank our principals back home who have given us all the support in our quest to free the Marange diamonds. His Excellency the President has given us tremendous guidance throughout."

As long as the US and European Union sanctions remain in place the KPCS victory might not produce desired results.

The KPCS decision will only work if the US and EU sanctions are lifted.

What has happened is a case of putting a cart before the horse.

The sanctions were supposed to go first and then Zimbabweans were going to celebrate the uninterrupted sale of the gems.

Just because the sanctions have not been scrapped, the following scenarios are likely to happen.

The Zimbabwe Democracy and Economic Recovery Act that was changed to Zimbabwe Transition to Democracy and Economic Recovery Act in 2010 will still be used by America to influence its citizens in positions of authority in multilateral institutions to veto any decisions to extend financial assistance to Zimbabwe.

If the EU does not remove sanctions in February next year when it meets to discuss the matter, it will mean the Zimbabwe Mining Development Corporation and Minerals Marketing Corporation of Zimbabwe officials will not be able to cut any deals with major diamond dealers in rich European and American markets.

These are some of the biggest markets for diamonds in the world.

The ZMDC is Government's investment arm and has shares in all companies mining diamonds in Marange.

These companies will also not be able to sell the gems despite the KPCS's latest development because of the ZMDC factor.

The only solution that will see unhindered trading of Marange diamonds is the unconditional removal of the west's illegal embargoes.

We welcome the recent announcement by US Ambassador to Zimbabwe Mr David Bruce Wharton a fortnight ago that part of his mandate was to help build bridges between Harare and Washington.

"Our policy on Zimbabwe is not static. We will react positively to any democratic processes and reforms such as elections," he said.

However, a careful analysis of the statement will tell that just like other ambassadors from the EU states, the statement had a denial that sanctions were taking a toll on Zimbabweans and the economy.

If sanctions are not removed, the US Treasury Department's Office for Foreign Assets Control will continue to intercept and forfeit money meant to buy the Marange diamonds.

So far OFAC has intercepted over US$30 million from different companies the world over meant to buy diamonds from Zimbabwe because huge transactions in US dollars have to pass through the US Treasury.

It is good that the KPCS has allowed Zimbabwean gems to be sold unhindered on the world market but the money will not reach Zimbabwe as long as OFAC sanctions are in place.

We therefore call upon the KPCS to use the strength of its number (76) and the value of diamonds to put pressure on the EU and America to lift their illegal economic sanctions regime.

The proponents of the illegal sanctions imposed on Zimbabwe should answer this question.

What are the consequences of denying world market to a country that has 1.9 million hectares of land infested with diamonds, produces about 160 million carats a year that is about 25 percent of the world's output?

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