Botswana would be allowed to directly sell 10 percent of the diamonds through the new company.

The minister of Minerals, Energy and Water Resources, Ponatshego Kedikilwe, said cabinet has approved setting up the entity, which will sell directly without a third party being involved.

As part of the landmark agreement with De Beers, Kedikilwe said the company would relocate most of its key operations from London to Gaborone with most diamonds being sold locally.

“This also means that diamonds mined in Botswana would not only be valued and sorted in the country, but will be sold locally and to other continents,” he added.

According to the minister, the result is that Botswana is due to become a major player in other sectors of the diamond industry while Gaborone would be a major global center for trade, a function previously reserved for European cities such as Antwerp in Belgium.

The Minister added that this “will boost tourism, the hospitality industry, transportation and other sectors.”*

Diamond sales account for 33% of the total GDP and is the first foreign currency earner of the country (about 80%).

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WDC president Eli Izhakoff said a meeting of the Kimberley Process held last Thursday in Kinshasa, Democratic Republic of Congo, ended inconclusively after members failed to reach a consensus on the issue of diamond exports from Zimbabwe’s Marange region.

“In the meantime, the WDC urges all members of the trade to deal only in rough diamonds that are accompanied by KP certificates that comply with the consensus decisions of the Kimberley Process,” Izhakoff said.

Izhakoff’s comments added to the confusion over the real status of Zimbabwe’s diamonds following a declaration by KP chairman Mathieu Yamba last Thursday that the watchdog would allow exports of Marange diamonds.

Yamba of the DRC claimed that the meeting had decided to lift the ban on exports of diamonds from two of the five mines currently operating in the disputed Marange region.

Izhakoff added that the WDC would “advise industry members if and when participants to the Kimberley Process Certification Scheme reach consensus on the issuing of KP certificates for the export of rough diamonds from the Marange region, when advised of the same by the KP Chair”.

Zimbabwe has been barred from openly selling its diamonds from Marange since 2009 due to alleged human rights violations by the army.

The issue of Zimbabwe selling the Marange diamonds has divided the KP along political lines, with Western countries led by the United States, Germany and Australia as well as civil society groups that are members of the organization calling for the extension of a ban of the gems due to alleged human rights abuses and rampant smuggling at the controversial diamond field.

African and other countries, including Russia, have however opposed the calls to ban the diamonds.

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Members of the Kimberley Process Certification Scheme (KPCS) are holding an intercessional meeting in Kinshasa,DRC. this week during which discussions on Zimbabwe are expected to take center-stage.

Mines Minister Obert Mpofu told The Herald that Zimbabwe would not accept any outcome from the meeting that would set conditions for the export of the Marange diamonds.

He insisted that there was no reason why Zimbabwe should not be allowed to export its diamonds from Marange, arguing that the southern African country had met the minimum requirements of the KPCS, which seeks to prevent diamond sales from financing conflicts.

“Zimbabwe met the KPCS minimum requirements and this was confirmed by the last plenary,” Mpofu told the newspaper.

Mpofu said Zimbabwe has for two years invested “in attempting to rectify all KPCS issues in the Marange area”, which included tightening security controls at the diamond fields.

Zimbabwe has been barred from openly selling its diamonds from Marange since 2009 due to alleged human rights violations by the army.

The issue of Zimbabwe selling the Marange diamonds has divided the KP along political lines, with Western countries led by the United States, Germany and Australia as well as civil society groups that are members of the organization calling for the extension of a ban of the gems due to alleged human rights abuses and rampant smuggling at the controversial diamond field.

African and other countries, including Russia, have however opposed the calls to ban the diamonds.

Zimbabwe has criticized the calls for a ban of the Marange stones, accusing the West of using the diamonds issue to punish President Robert Mugabe for taking land from white farmers and re-allocating it to landless black people.

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Xin told the state-run Herald newspaper that China’s delegation to the next month’s meeting of the KP would urge members to allow exports of the country’s diamonds.

“We will work together because we want both countries to benefit,” Xin said.

A Chinese company Anjin Investments is one of six foreign firms mining diamonds in Zimbabwe’s controversial Marange diamond fields.

Diamonds from Marange are subject to an international ban since 2009 amid allegations of human rights abuses by the Zimbabwean army which is accused of engaging in murder, forced labor and smuggling.

The issue has divided the KP, with African, Russia and Asian members of the organization pushing for a resumption of exports while the West insists on a continued embargo.

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The DR Congolese official, who took over from Israel’s Boaz Hirsch as KP chairman in January, has written to all KP participants and observers authorizing the immediate resumption of exports from companies operating at Marange and that all unresolved issues would be dealt with at the meeting of the Working Group on Monitoring (WGM) scheduled for 20-23 November this year.

In the letter, seen by APA on Tuesday, Yamba said the KP system was faced with a vacuum since November 2010 as clause 3(b) of the Kimberley Process Certification Scheme (KPCS) remained a stumbling block following the reservations expressed by Zimbabwe and other participants.

He said that the stoppage of exports by the KPCS must be subjected to “a more credible mechanism that includes verification of allegations and due process.”
“With immediate effect, Zimbabwe is hereby authorized to resume exports from the compliant mining operations of Mbada and Canadile (Marange Resources),” the letter said.

Canadile Mining ceased operations last year after its license was revoked by the Zimbabwean government.

Authorized exports would include the stockpile of diamonds held from the two concessions as well current production.

The decision to authorize exports attracted strong criticism from the United States and the European Union.

The US has threatened to publish names of those accepting the Marange diamonds on its government website to warn American companies against doing business with these traders.

The threat was targeted at buyers from the United Arab Emirates, South Africa and India.

The US also said that it would ask the Office of Foreign Assets Control (OFAC), which administers all US sanctions procedures, to scrutinize these transactions.

OFAC has listed the Zimbabwe Minerals and Development Corporation (ZMDC), the state-run parent company which owns Marange Resources, on its sanctions list.

Negotiations to allow the exports failed at the Kimberley Process plenary meeting in Jerusalem in November 2010.

Further talks broke down in January after Israel initiated a final effort to bring all KP members into written consensus regarding the ‘Jerusalem agreement’ proposal.

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Poverty and crime characterize the diamond business in CAR, according to the report entitled Dangerous Little Stones: Diamonds in the Central African Republic.

“The inability of artisanal miners to escape poverty holds back development in mining areas and increases the risk of young men and women joining rebel groups in the hope of better alternatives,” it said.

Low education levels, high mining costs and limited production have had adverse effects. “Miners are mostly ignorant of a diamond’s real value and, even if they know it, they are obliged to sell at the price offered, sometimes by written contract to the collector who financed the work… A collector might buy a one-carat diamond from a miner at 80,000 CFA francs [US$160] and sell it to a buying office for 200,000-300,000 CFA francs [$400-$600],” said the report.

Additional costs such as the hiring of equipment and licensing fees make for a hand-to-mouth existence, especially for those struggling to feed large families.

CAR’s diamond deposits are alluvial, making extraction harder and industrial mining less feasible. At present, production is based on trial and error methods, and the use of shovels and baskets to collect gravel from river beds. An estimated 80,000-100,000 miners depend on artisanal mining for a livelihood.

The ICG report recommends formalizing the mining sector to lower mining-related costs, lift living standards and reduce illegal mining networks. Weak law enforcement benefits illegal miners and traders, with bandits also profiting in mining zones. The report also calls for the expansion of livelihood activities, including agriculture. According to the UN Children’s Fund, chronic malnutrition in CAR stems from, among other things, loss of income in mining areas.

Armed groups such as the Convention des patriotes pour la justice et la paix (CPJP) and the Union des forces démocratiques pour le rassemblement (UFDR) remain active in the eastern diamond zone, making “the east a dangerous place to live and move around”, said the report, which noted that while diamond profits are not the only reason for rebel activity, they have contributed to making such rebellions harder to end in CAR.

Read more of the story here at the IRIN news service:
CENTRAL AFRICAN REPUBLIC: Poverty, peril for diamond mining communities in east

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IDE member David Vardi was expelled from trading in the bourse after the IDE management committee met on Monday morning to decide what course of action to take against the trader.

A spokesperson for the IDE said Vardi’s expulsion was meant to send out the strongest possible message to the industry that such behavior would not be tolerated,

Vardi was arrested last Wednesday after a courier he had hired to carry the diamonds was caught by custom officials as he was about to exit Ben Gurion Airport in Israel.

After his arrest, the courier, Gilad Halachmi, implicated Vardi resulting in the trader being picked up for questioning.

The diamonds were not accompanied by Kimberley Process (KP) certificates as required by law and international treaties.

Diamonds from Zimbabwe’s Marange region (east) are banned for exports as part of measures to force the southern African country to adhere to KP mining standards.

The Zimbabwean army is accused of alleged human rights abuses at the Marange fields, including engaging in forced labor and smuggling.

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How People Arrived Here:

arrested at israel diamond exchange, who are the people arrested by the Israel police at teh diamond exchange?

IDE president Avi Paz announced on Sunday that a courier representing the unidentified member was caught by customs officials as he was about to exit Ben Gurion Airport last Wednesday.

After his arrest, the man disclosed the origins of the goods and the identity of the person he brought the diamonds for. The IDE member was immediately arrested.

Paz said the IDE member would face expulsion from the exchange “if found that he is involved.”

The diamonds were not accompanied by Kimberley Process (KP) certificates as required by law and international treaties.

Diamonds from Zimbabwe’s Marange region are banned for exports as part of measures to force the southern African country to adhere to KP mining standards.

The Zimbabwean army is accused of alleged human rights abuses at the Marange fields, including engaging in forced labor and smuggling.

Observers said the arrest of the Israeli official shows the double standards of the international community which publicly condemn operations at the Zimbabwean mine while privately dealing with illegal traders from the area.

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ADPA secretary general Edgar de Carvalho said in a statement sent to APA on Friday that the decision to reinstate the ban on Zimbabwean diamonds smacked of political persecution of the southern African country.

“Zimbabwe cannot be held to ransom just because a minority of countries within the KP (Kimberley Process) continue to block consensus deliberately,” de Carvalho said.

Trade in diamonds from Zimbabwe’s Marange fields (east) has been outlawed since November 2009 when the KP accused the government of human rights abuses.

KP monitor Abbey Chikane allegedly cleared a batch of Chiadzwa stones for export last week without seeking the watchdog’s approval.

Diamonds worth some $160 million were sold and may have been already exported to India.

The action by the South African monitor came despite the failure by KP participants to agree on trade in Marange stones during a meeting in Jerusalem earlier this month.

KP chairperson Boaz Hirsch however warned participants to exercise vigilance and immediately report to the body’s Working Group on Monitoring any shipments suspected to contain diamonds illegally exported from Zimbabwe’s Marange fields.

He said no trade in Marange diamonds can currently take place until Zimbabwe meets the conditions of a Joint Work Plan (JWP) agreed by both parties at a plenary meeting held in Namibia last November.

Under the JWP, Zimbabwe committed to a phased withdrawal of the armed forces from the diamond fields and for a monitor to examine and certify that all shipments of diamonds from Marange met KP standards.

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KP chairperson Boaz Hirsch said in a statement issued here that participants must exercise vigilance and immediately report to the body’s Working Group on Monitoring (WGM) any shipments suspected to contain diamonds illegally exported from Zimbabwe’s Marange fields (east).

He said no trade in Marange diamonds can currently take place until Zimbabwe meets the conditions of a Joint Work Plan (JWP) agreed by both parties at a plenary meeting held in Namibia in November 2009.

Under the JWP, Zimbabwe committed to a phased withdrawal of the armed forces from the diamond fields and for a monitor to examine and certify that all shipments of diamonds from Marange met KP standards.

“Participants are therefore reminded of the need for vigilance and ask participants to notify the WGM chair in the event of receipt of an irregular shipment of Marange diamonds, until new arrangements are agreed that will allow continued implementation of the Joint Work Plan, including the supervised export mechanism,” Hirsch said in a notice to KP members.

KP monitor Abbey Chikane allegedly cleared a batch of Chiadzwa stones for export last week without seeking the watchdog’s approval.

Diamonds worth some US$160 million were sold and may have been already exported to India.

The action by the South African monitor came despite the failure by KP participants to agree on trade in Marange stone during a meeting in Jerusalem earlier this month.

Zimbabwe was granted more time to fall in line with the minimum international standards of diamond trade.

The Kimberley Process is a ten-year old initiative by governments, industry, and civil society to end the trade in conflict diamonds – rough diamonds used by rebel movements to finance wars against legitimate governments such as in Liberia and Sierra Leone.

The KP has 49 members, representing 75 countries to enable them to certify shipments of rough diamonds as conflict-free.

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In a statement issued ahead of a Kimberley Process plenary meeting which began in Israel on Monday, HRW said research it conducted between July and September had established that large parts of the fields remained under the control of Zimbabwean soldiers who harass and intimidate the local community and engage in widespread diamond smuggling.

“The government made a lot of promises, but soldiers still control most diamond fields and are involved in illicit mining and smuggling,” said Rona Peligal, Africa director at HRW.

In November 2009, the government of Zimbabwe and the Kimberley Process agreed to a Joint work plan (JWP) under which Zimbabwe committed to a phased withdrawal of the armed forces from the diamond fields and for a monitor to examine and certify that all shipments of diamonds from Marange met Kimberley Process standards.

At a special meeting in Russia in July, Kimberley Process members agreed to permit Zimbabwe to export two shipments of diamonds under supervision of the body’s monitors, on condition that the body would investigate conditions in the Marange fields.

The agreement also tied all future exports of diamonds to clear and measurable progress in ending smuggling and abuses, and allowed for local civil society groups to participate in monitoring progress in the fields.

HRW said the Zimbabwean army was using syndicates of local miners to extract diamonds.

“Local miners told Human Rights Watch that the army coercively recruits local people to help the army dig for diamonds. Many people are afraid to refuse, fearing that the soldiers will beat and harass them,” the rights group said.

The Kimberley Process summit closes on Thursday and is expected to discuss Zimbabwe’s progress in implementing the JWP.

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The four-day plenary meeting, which commences on Saturday and runs until November 4, will see KP monitor for Zimbabwe Abbey Chikane and Stephane Chardon, chairman of the Brussels-based KP Working Group on Monitoring presenting reports on the implementation of a Joint Work Programme (JWP) agreed with Zimbabwe in Namibia last November.

The meeting will also consider a report by Liberian Deputy Mines Minister, Kpandel Fayia, who led a KP mission to the country in June to review progress on the implementation of the JWP.

Adopted at Swakopmund in Namibia, the JWP seeks to bring Zimbabwe’s diamond trade into full compliance with the minimum requirements of the KP.

The KP temporarily lifted a ban on diamond exports from Marange in July after Chikane said Harare had met all conditions set by the world diamond regulator.

Under a consensus agreement reached by the KP and Zimbabwe during the World Diamond Council meeting in Russia three months ago, Harare was allowed to conduct two supervised auctions of rough diamonds from the Marange diamond fields.

The move saw about 1.5 million carats of stockpiled Marange diamonds going under the hammer in August and September, prompting boycott calls from a leading international network of buyers and suppliers, Rapaport Diamond Trading Network.

Rapaport threatened to expel and blacklist any of its members who violate the ban on trading in gems from the controversial area.

The KP had since last November banned exports of Marange diamonds, citing human rights abuses by security forces guarding the mines.

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The Chamber of Mines said total mineral sales between January and August amounted to $852 million compared to $671 million earned in the whole of 2009.

The figure excluded diamonds which have so far earned Zimbabwe more than $70 million from just two supervised auctions conducted in August and September.

The next auction is expected this month but an exact date still has to be fixed in conjunction with the industry watchdog Kimberley Process that had since last November banned exports of diamonds from Zimbabwe’s Marange fields, citing human rights abuses by security forces guarding the mines.

The government says the country holds more than five million carats from Marange, where it runs two joint venture mining operations with South African firms.

Some international diamond experts say output from the Marange fields could easily reach 40 million carats by 2013, catapulting Zimbabwe to top global gem producer and earning $2 billion a year.

Revenue from diamond sells could go a long way to providing much needed cash for the Harare government that has failed to attract meaningful financial support from Western governments and international financial institutions.

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The Kimberley Process Certification Scheme – an initiative to prevent conflict diamonds from entering the multibillion dollar global market – allowed Zimbabwe to sell diamonds from the Chiadzwa area of Marange in Manicaland Province. The diamond fields – reputedly the largest find in a century – have been mired in controversy, with constant allegations of human rights abuses since they were discovered in 2006.

Amnesty International has reported that soldiers deployed to guard the diamond fields have forced people to mine the diamonds, which were then smuggled out of the country, while other reports have indicated that security forces were killing illegal miners.

Primrose Mudzengi, 38, a teacher in the capital, Harare, earns a US$150 a month, which she has to juggle to cover the rent, school fees for her two children, food and transport.

“Civil servants like me are virtually living on slave wages. I am confident that our salaries will improve significantly once diamonds are mined and sold on a large scale, and the government can spare more money for us,” Mudzengi told IRIN. “I will be able to take my children on holiday as I used to do before the economy started sliding, and stop living like a beggar.”

Dickson Chofamba, a Harare-based government mechanic, told IRIN: “Civil servants have suffered for too long, and the discovery of the diamonds should give us a chance to restore our dignity at the workplace. The PSA [Public Service Association, which represents government employees,] should ensure that we get most of the money.”

The president of the Progressive Teachers Union of Zimbabwe (PTUZ), Raymond Majongwe, was more pragmatic. It would be “folly for civil servants to think that the diamonds would improve their lives”, he told IRIN.

Read more of the story here at the IRIN news service:
ZIMBABWE: Diamond sale a false economic dawn

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The umbrella group of international diamond buyers and sellers said in a statement that although trading of Marange diamonds was legal in certain countries, companies owning or selling the diamonds are prohibited by United States, European Union and United Kingdom governments and their trading may be illegal by citizens of these countries.

“Rapaport strongly advises all diamond buyers not to trade in KP (Kimberley Process) certified Marange diamonds and to request written assurance from their suppliers that their diamonds have not been sourced from Marange,” the group said.

According to Rapaport, KP does not have a mandate to deny its certification for diamonds involved in human rights violations and, therefore, there was no guarantee that Marange diamonds with KP certification are free of human rights violations.

“RapNet, the Rapaport Diamond Trading Network, will not allow the trading of any diamonds sourced from Marange, Zimbabwe. Members found to have knowingly offered Marange diamonds for sale on RapNet will be expelled and their names will be publicly communicated,” the statement said.

KP had since last November banned exports of Marange diamonds, citing human rights abuses by security forces guarding the mines. It however lifted the ban last month after its Zimbabwe monitor Abbey Chikane said Harare had met all conditions set by the world diamond regulator.

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