Thursday, February 10, 2011

Zim diamonds yet to get KP approval

Zimbabwe’s diamond exports are now at the mercy of the Democratic Republic of Congo (DRC), the new Kimberley Process (KP) chair.

The World Diamond Council (WDC) early this month quashed reports that the KP had given Zimbabwe the green light to trade its gems from the Chiadzwa fields saying the DRC had not yet given its formal and final approval.

The DRC’s Mathieu Yamba recently took over the KP chair from Israel. There was no immediate comment from Mines minister Obert Mpofu as he was not reachable on his mobile phone on Thursday.

“The authorities in Zimbabwe need to complete a series of consultations with the new KP chair from DRC, who has called for understanding and patience of the industry until conclusions are reached,” WDC said in a statement.

The apex industry organisation has made formal communication to the international diamond industry.

The WDC said until a conclusion was reached, exports of stocks and production from the approved concessions in Chiadzwa, Marange, would not carry the approval of the KP.

“In the meantime, we continue to advise members of the diamond industry that until a conclusion is reached exports of stocks and production from the approved concessions in Marange do not carry the approval of the Kimberley Process,” the WDC said.

“We will advise you as soon as the consultations have been concluded and a clear directive has been received from the chair.”

The move will deal a heavy blow to the Zimbabwe government which was hoping to raise money through diamond sales to pay its restive civil servants.

Diamond sales are also expected to help the recovery of the country’s economy, shattered by a decade-long political crisis.

Sources on Thursday said the new KP chair would most likely give a thumbs-up to the exports given the friendship between Harare and Kinshasa.

In 1997 the Zimbabwe military intervened to save the DRC government from being overrun by rebels who were supported by Rwanda and Uganda.

President Robert Mugabe deployed thousands of soldiers to save Kinshasa under the late Laurent Kabila.

News that the export of diamonds from Chiadzwa should be put on ice has adversely affected the diamond industry in India, the largest importer of the Zimbabwean gems.

According to an estimate, Zimbabwe has a stockpile of over six million carats of diamonds that was expected to flood the Indian market once given KP approval.

“This is a major setback. The industry, especially the diamantaires in Surat, was eagerly waiting for the Zimbabwean goods to flood the market in order to overcome the severe shortage of rough diamonds,” said Sanjay Kothari, vice-chairman of India’s Gems and Jewellery Export Promotion Council.

“The rough prices appreciated by almost 30% in 2010 due to the shortage and the prices were expected to increase throughout 2011. The deadlock over the export of diamonds from Zimbabwe will create a difficult situation for the diamantaires,” said Chandrakant Sanghavi, chairman of Sanghavi Exports in India.

In July last year, the KP Certification Scheme agreed that diamonds from Chiadzwa could be sold on the international market.

Two auctions were organised in September and October and about 90% of the precious stones worth $100 million were purchased by Indian diamond dealers.

But the regulator again imposed a ban in November last year.

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