ZIMBABWE could soon be allowed to sell diamonds from Marange in Europe after sanctions on the Zimbabwe Mining Development Corporation (ZMDC) were lifted.
The ZMDC holds a 50 percent stake in several mining operations in Marange on behalf of the Zimbabwe government, but the company had been blacklisted under European Union sanctions.
The European Union said Tuesday that the company would be removed from the sanctions, despite concerns over alleged fraud in a July election that kept President Robert Mugabe in power.
EU governments have carried out a review of the company's inclusion in the EU sanctions list "and begun the process of delisting ZMDC," EU foreign affairs spokesman Michael Mann said.
The decision gives a boost to Mugabe, whose Zanu PF party calls EU sanctions illegal, and will allow the mining firm to sell its diamonds in Europe, potentially raising its revenues.
Belgium, centre of the global diamond trade, had pushed hard for the EU to lift sanctions on ZMDC, in line with an earlier agreement. Britain, Zimbabwe's former colonial power, had resisted the step so as not to be seen to be rewarding Mugabe.
The decision to take ZMDC off the sanctions list must be endorsed by EU foreign ministers. That is expected to be a formality and to happen quickly, an EU diplomat said.
Mugabe overwhelmingly won the July 31 vote but it was denounced as a "huge fraud" by his main rival, Morgan Tsvangirai. The EU expressed "serious concerns" over the alleged irregularities in the election but the African Union and the Southern African Development Community (SADC) said the election was free and credible.