Human Rights Watch Says Zimbabwe's Marange Diamonds Funding Mugabe Party

Human Rights Watch in 2009 issued a report saying serious human rights abuses, including killings by the military of freelance diamond panners, had taken place in the Marange field, in addition to smuggling

Human Rights Watch has issued a report accusing Zimbabwean President Robert Mugabe's long-ruling ZANU-PF party of tapping proceeds from the illicit sale of diamonds from the Marange field to fund its campaign for anticipated 2011 elections.

Human Rights Watch United Kingdom Director Tom Porteous said his s investigations showed “revenue from the mines is serving to prop up Mr. Mugabe and his cronies.”

He said Human Rights Watch is concerned such funds will also be used to support political violence by ZANU-PF and intimidate Mugabe opponents.

ZANU-PF spokesman Rugare Gumbo dismissed the charges as nonsense.

Human Rights Watch in 2009 issued a report saying serious human rights abuses, including killings by the military of freelance diamond panners, had taken place in the Marange field, while diamond smuggling through Mozambique was rampant.

Human Rights Watch Senior African Researcher Tiseke Kasambala told VOA Studio 7 reporter Jonga Kandemiiri that the unity government should take steps to prevent further abuse by ZANU-PF of the rich diamond resource in eastern Manicaland province.

In a related development, Israeli authorities have arrested two men on charges they tried to smuggle Marange diamonds into the country. Kimberley Process Certification Scheme Acting Spokesman Stokamer Amir said law enforcement agencies arrested David Vardi and Gilad Halachmi at the Tel Aviv airport on Wednesday, December 23.

Amir said the two were accused of trying to smuggle diamonds worth more than US$200,000 into the country. Vardi, a diamond trader registered under the Israeli Diamond Exchange, has been expelled from that organization.

Amir said the Kimberley Process is monitoring the latest developments in the case and vowed that the two would face the full force of the law.

South African-based political and economic commentator Walter Nsununguli Mbongolwane told VOA Studio 7 reporter Gibbs Dube that the arrest of the two Israelis could lead to the discovery of other shady Marange diamond deals.

Buoyant gold price squeezes diamond content in jewellery

The jewellery industry could only watch as the price of gold rose throughout 2010. For manufacturers, there was an urgent need to reduce both gold and diamond content in order to maintain price points.

Although for much of the year the financial columns have busied themselves with identifying the precise reasons for the sharp rise in the price of gold, the jewellery industry has been dealing with the phenomenon’s impact. The increase in the cost of gold has meant that many jewellery manufacturers have reduced either the amount of gold or diamonds, or both, they use in their products, in a bid to maintain price points.

That has been all the more the case in the European and American markets where economic recovery remains fragile and customer confidence uneven. Retailers have faced a tough battle of margins as they attempt to attract custom by keeping prices down while paying higher prices for goods. The price of gold has risen around 28 percent this year to around $1,340.

What does this mean for diamonds? In many cases jewellery manufacturers have pushed back downstream to try and secure lower prices for diamonds, although it is not clear how successful they have been. They have also changed buying patterns with a trend to smaller diamonds.

“We have seen clients putting in demands for smaller diamonds of lower qualities,” said one diamond company executive. “That is clearly a result of the need to cut costs. It is obvious that rising gold prices are forcing a change in the composition of jewellery. We have seen some downsizing in the diamonds being requested.”

Meanwhile, Dirk De Nys, of DTC sightholder the IGC Group, said: "First of all, it is very frustrating to see the sharp rise in the price of gold when in the diamond industry we are struggling to push diamond prices higher. We have seen in the U.S. market that an impact of the rising price of gold is that jewellery manufacturers have moved to using less gold and using more silver.

“As far as we are concerned, 40 percent of our diamond production goes to jewellery brands and these are large companies that are not going to cut back on either gold or diamond content. They are able to pass the rises on to their customers. It is crucial for them that they stay with their brand identity so they are not cutting back the quantity or quality of their products,” De Nys said.

Another consequence of gold’s rise is a noticeable move to silver jewellery in the U.S. and European markets. Indeed, silver has marked a sixth straight quarterly advance, the best run since the beginning of 1980. While all eyes have been fixed on the rise in the price of gold, silver has risen much higher, up around 75 percent this year to more than $29 per ounce.

Although consumers have not suddenly lost their liking for jewellery, they are content to wear less expensive items and to move away from gold. In this respect, the impact of the rising price of gold and the move to jewellery at a price that fits the budget of most buyers during the economic downturn that is still plaguing many parts of Europe and the United States can be seen in the financial results of jewellery maker Pandora. The producer of low-cost silver and gold bracelets and charms has seen soaring sales in the United States and Europe and a much less spectacular performance in the Asia region – which is a reversal of what is happening in the diamond world.

Pandora reported an almost doubling of sales in the Americas region in the third quarter of this year, up 93 percent. Meanwhile, in Europe, the expansion of sales was even more dramatic, jumping 191.2 percent. The continent accounts for 48.4 percent of the firm’s global sales. In the Asia Pacific region, where the impact of the recession has been considerably lower and which emerged from the slowdown well before Western states, Pandora saw its sales up by 30.3 percent, while sales in the region were responsible for only 11.1 percent of total worldwide sales.

But not only is the rising price of gold reducing diamond content in jewellery, it is also reducing the gold content. In the United States, purchases of gold jewellery are estimated to have fallen by around a third by volume in the past three years, and in Europe manufacturers are mixing gold with steel and ceramics to reduce the gold content and keep prices down. In India, where gold jewellery has been a must-buy for centuries, hollow bangles are being made to look like solid gold.

The Richline Group, an American manufacturer of fine jewellery, now sees 40 percent of its sales being in gold compared with more than 70 percent in 2006. At Signet Jewelers Ltd., one of the largest jewellery retailers with more than 1,300 shops in the United States and about 550 in the United Kingdom, more silver, tungsten and titanium jewellery is being offered for sale. And even Italy’s Bulgari SpA, the world’s third-largest jeweller, has increased the range of rings in its B.Zero 1 line, which were solid gold in 2000 and now mix ceramics with the yellow metal.

“We are focusing more than in the past on the combination of different materials,” Bulgari CEO Francesco Trapani told the media. “This is an interesting way to introduce something more appealing, more exciting, to the final client, a way of proposing things that can be less expensive.”

Could the rising price of gold and also platinum be filling the war chests of producers, giving them the power to launch acquisitions? At the end of a year in which gold, platinum and other commodities have moved inexorably higher, a media report in mid-December suggested that mining giant Anglo-American, which owns 45 percent of De Beers, may be preparing a bid to buy the Oppenheimer family’s 40 percent stake in the diamond miner.

A further side-effect of the rise in the price of gold has been the growth of companies offering cash for gold. Advertisements from companies offering to buy gold jewellery on the spot for immediate cash have sprung up on roadsides, in cities and in newspapers and magazines across the world. Although the recession officially ended in the United States more than a year ago, continuing high levels of unemployment mean many people are keen to raise money by selling off jewellery.


Gold has risen progressively higher this year due to range of factors. These include investor concern at the huge amount of cash being printed by the U.S. Federal Reserve Bank and fears that the U.S. economy will be buffeted by high inflation. Other investors bought gold this year on worries about ongoing financial turbulence in Europe, which started in Greece, and concern the global recovery may slow.

Although the price of gold has slipped back on several occasions during 2010, these dips only served as buying opportunities for investors who quickly sent its price back up. Although gold did not achieve the $1,500 per ounce level predicted by some analysts, many investment houses say there is strong enough demand to prevent a long-term fall in the price.

The global gold market has seen a transformation since the year 2000 when gold was selling for around $250 an ounce. For many years, jewellery had been the backbone of gold consumption, but, a sharp rise in demand from investors changed the picture. The impact of investors, especially buyers of physical gold through bullion-backed exchange traded funds, has provided a critical shift in the gold market.

The World Gold Council (WGC) says that jewellery accounts for around 70 percent of worldwide gold demand, whereas investment demand is less than 20 percent.

UBS, the Swiss bank, in its annual poll of central bank and sovereign wealth funds, found nearly a quarter of central banks believed gold would become the most important reserve asset in the next 25 years. Analysts also said Asia’s central banks, from India to the Philippines, were the most likely to buy gold. They added that central banks and, crucially, sovereign wealth funds in the Middle East were also keen on the metal, although some bankers pointed out that sovereign wealth funds were more likely to be tactical buyers, seeking price appreciation and profit-taking, rather than being strategic buyers seeking diversification and long-term security.

The buying spree meant that investors last year purchased more gold than buyers of jewellery for the first time in three decades, highlighting the growing impact of speculators on bullion prices. However, some analysts believe the fact that investors are buying more gold than the jewellery industry is a sign of a bubble.

GFMS, the consultancy that compiles benchmark supply-and-demand data on the precious metal, said earlier this year that investment demand doubled to 1,820 tonnes in 2009, while jewellery purchases fell by 23 percent to 1,687 tonnes, a 21-year low. Philip Klapwijk, executive chairman of GFMS, earlier this year warned that investors were likely to buy more gold again this year, but added that the bullion market could become vulnerable to a correction over the medium term if investors turned to other asset classes.

If the bullion market corrects, an upward shift in diamond content in jewellery is likely. What is certain is that, one way or the other, the price of gold will remain a significant factor in the volume and quality of diamonds being bought and sold.

UAE joins ban on Zimbabwe’s blood diamonds

The UAE has joined an international ban on the trade of ‘blood’ diamonds from the Marange fields in Zimbabwe, Dubai Multi Commodities Centre said.

The Arab state signed the UN-backed Kimberly Process, which seeks to control the trade in rough diamonds and prevent their use to finance conflict. Other signatories include the UK, US, India and Australia

Marange, in eastern Zimbabwe, contains the largest-known concentration of diamonds in the world. The field was seized by the Mugabe government in 2006 from the mining venture African Consolidation Resources.

A survey report for De Beers indicated that the Marange fields have a ratio of more than 1,000 carat per hundred tons, eight times higher than peers.

Profits from Marange’s smuggled diamonds have since been linked with human rights abuses and violence, with reports suggesting Zimbabwe President Robert Mugabe has profited from the illegal trade.

A cable from the US Embassy in Zimbabwe leaked by the website Wikileaks earlier this month alleged much of the trade passed through the Gulf.

In a statement, the DMCC said diamonds from Marange would no longer be permitted.

“We can confirm that the UAE KP office is in full compliance. The notice issued states that the ban will remain in place until further instruction from KP.”

GIA Lab Alert Identifies Surge in HPHT-Treated Submissions

Vast Majority of Diamonds Lacked Full Disclosure:


The Gemological Institute of America (GIA) Laboratory recently reported that a significant number of large high pressure/high temperature (HPHT) treated-color diamonds were submitted for grading. Submissions have ranged from 3-carat to nearly 20-carat stones and the vast majority of these diamonds were submitted without full disclosure. The color grades ranged from “D” to “J”, but most were “G” or better combined with high clarities.

As already noted in GIA's December issue of Gems & Gemology’s G&G eBrief, some of the diamonds had flat graphite inclusions with tension “halos” surrounding them. This type of inclusion suggests that the diamond has been processed by HPHT annealing.

“The range of diamonds being subjected to the treatment has also expanded,” said Tom Moses, senior vice president of the GIA Laboratory and Research. “We are confident that we can identify virtually all these treated diamonds as a result of our extensive research in this area, which is one of the most important initiatives at GIA. However, we do not know if this recent surge in treated stones represents a new source or an attempt by some clients to ‘test the systems’ at GIA.”

According to Moses, GIA is contacting the clients both to learn the source of the treated diamonds and to remind them that the failure to disclose treatment at all stages of the pipeline is unacceptable. In addition, GIA is reviewing each transaction to determine whether it’s appropriate to turn over relevant information to the trade organizations and law enforcement bodies.

“GIA’s mission is to protect the public trust in gems and jewelry,” added Moses. “We take this role very seriously. GIA will not tolerate the intentional failure of its clients to appropriately disclose gemstone treatments.”

By Jeff Miller

Head of Angola’s Endiama says diamond prices back to pre-crisis levels

Angolan National Diamond Company (Endiama) succeeded this year in achieving prices for diamonds that were seen before the world financial crisis, said board chairman, Carlos Sumbula.

“We have had problems, because the price of diamonds went down following the financial crisis,” he said in comments cited by the Angola press Agency. “Our first action was to tackle the price issue, since it worried us the most.

“We’ve established strategies that allowed us to make the prices go up. Currently, the price of diamonds has reached the level it was before the crisis,” he said.

As a result of higher revenues, the company is now able to resume the investments it was making before the crisis, and to restart operations at mines.

Renewed confidence in diamond price prompted the government to approve seven new projects, he said.

“At this moment the risk is gone, the product has a stable price, so this puts the company in condition to become involved in projects, like the building of houses and clinics in a sustainable way” he said.

Japanese scientists create world's hardest diamond

The cylindrical-shaped diamond was synthesised by a team of researchers at Ehime University.

The diamond - called the Hime, Japanese for princess - was created as part of a collaboration between scientists and Sumitomo Electric Industries, which hopes to start selling the diamonds as early as next year.

Hailed as the hardest artificial diamond on the world, it is significantly stronger than normal diamonds enabling it to be used in an array of industrial activities, according to its creator Tetsuo Irifune.

"A large Hime diamond is useful for experiments to study the high- pressure deep interior of the Earth," he told Kyodo News. "Also, as a product for industrial use its lifetime is several times longer than that of an ordinary diamond."

The newly unveiled diamond is a more sophisticated and bigger version of a similar diamond the same scientists first synthesised in 2003.

Following a series of experiments conducted since March last year using ultra-high pressure synthesising machinery, scientists have been able to craft the Hime, which measures 1cm in length and diameter.

Diamonds are the hardest know natural occurring material and are prized for industrial purposes.

Due to their hardness and head conductivity, they are commonly used for industrial cutting in devices such as diamond-topped drill parts and saws as well as being mixed into a powder or paste for polishing.

An estimated 80 per cent of mined diamonds deemed unsuitable as gemstones are employed in an industrial context.

Danielle Demetriou in Tokyo

Anglo American mulls plan to control De Beers

ANGLO AMERICAN is weighing up a multi-billion-dollar plan to take control of De Beers, the world's largest diamond company.

The plan involves buying out South Africa's Oppenheimer family.

Big institutional shareholders in Anglo, a mining giant listed in London and South Africa, are pushing its management to "tidy up" its investment in De Beers. Anglo owns 40 per cent, the government of Botswana 15 per cent and the Oppenheimers 45 per cent.

Financial sources said that while a spin-off of De Beers had been considered, it was more likely that Anglo would buy out the family and make De Beers part of its core operations.

The Oppenheimer stake is difficult to value, but it could cost Anglo at least ₤2 billion ($3.14bn).

"Shareholders aren't happy with the minority investment. They want clarity either way, and the view of the directors is a positive one: that they would be interested in taking control," one banking source said.

If the Anglo board goes ahead with the plan, it would sever a long association between the Oppenheimer family and the two companies.

De Beers was founded in 1880 by Cecil Rhodes, the English-born mining magnate and politician who founded Rhodesia, now Zimbabwe. Rhodes and De Beers made millions from South Africa's diamond mines.

Sir Ernest Oppenheimer set up Anglo American in 1917 with backing from JP Morgan, the American tycoon, and seized control of De Beers in 1927. Anglo later became a quoted company and one of the world's biggest players in coal, copper and platinum.

De Beers has stayed private, and is managed by the Oppenheimer family. Nicky Oppenheimer, De Beers' chairman and a director of Anglo, is Sir Ernest's grandson.

The Oppenheimers, whose wealth is estimated at about ₤3bn, are long-term investors in Anglo. However, last week the family sold shares in the miner, taking their stake below 2 per cent for the first time.

De Beers had a tough recession as consumers shied away from luxury goods. Last year it was forced to ask shareholders to stump up $US1bn ($1.01bn) to refinance the group.

Trading bounced back this year. In July the company said first-half profits were $US255m. It also said Gareth Penny, the long-serving chief executive, would step down.

Putting a value on the Oppenheimers' stake is difficult. The family shares are held through a group called Central Holdings, which owns part of De Beers SA, registered in Luxembourg.

Bankers say that based on recent profits and the group's leading position in world diamonds, the stake may be worth between $US3bn and $US5bn.

Grace Mugabe sues Zimbabwe newspaper over Wikileaks diamond story

First lady files $15m lawsuit against paper for reporting embassy cables alleging links to illegal diamond trade
Grace Mugabe is suing a Zimbabwean newspaper for $15m (£9.5m) for reporting allegations released by Wikileaks that she had made "tremendous" profits in the illicit diamond trade, according to state media.

The first lady launched a defamation suit against the Standard newspaper in the high court in Harare yesterday. The offending article quoted extensively from a US embassy cable that alleged Mrs Mugabe was among a group of elite Zimbabweans making "several hundred thousand dollars a month" from the sale of illegal stones mined in the Marange district – scene of a frenzied diamond rush in recent years.

The state-owned Herald newspaper said the claims made against the wife of President Robert Mugabe were "false, scandalous, malicious and bent on damaging her reputation". Court papers said the first lady, who is known for her enthusiastic shopping trips abroad, was "well regarded internationally".

"Further, she is the wife of his excellency the president of Zimbabwe. The imputation of such conduct on a person of such high standing, the mother of the nation, is to lower the respect with which she is held by all right-thinking persons, to a point of disappearance."

In the cable released by Wikileaks, US ambassador James McGee described a meeting between one of his political officers and the representative of a mining company that had its Chiadzwa diamond claim in the Marange district of eastern Zimbabwe revoked by the government. The mining company official was reported to have said that "well-connected elites are generating millions of dollars in personal income by hiring teams of diggers to hand-extract diamonds" from Chiadzwa, before reselling the stones to shady foreign buyers.

From 2006, thousands of illegal miners swarmed to the diamond fields, among the world's richest finds in recent times, and initially sold their stones to the government. The military soon moved in, forcing people to work for them and later firing at groups of diggers from helicopter gunships in an effort to control the mining. There were also numerous reports of people close to the Mugabe government profiting greatly from the trade at the expense of the state, which was suffering grave foreign currency shortages at the time.

President Khama, of diamond rich Botswana in racist outburst against Kalahari Bushmen

In an astonishing outburst, Botswana’s president has today described the Kalahari Bushmen as ‘primeval’, ‘primitive’ and ‘backward’, says Survival.

Speaking at the country’s largest diamond mine, President Khama accused the Bushmen of living a ‘life of backwardness’ ‘a primitive life of deprivation co-existing alongside wild animals’, and ‘a primeval life of a bye [sic] gone era of hardship and indignity’.

Khama also accused Survival of ‘embarking upon a campaign of lies and misinformation’, calling the tribal rights organization ‘modern day highway robbers’. His comments came in response to Survival’s call for a boycott of Botswana tourism and diamonds over the government’s treatment of the Bushmen. President Khama is a board member of US organization Conservation International.

In 2002, while Khama was vice-president, the Botswana government forcibly evicted the Bushmen from their ancestral lands; an act that was later declared unlawful and unconstitutional by Botswana’s High Court, which also ruled that the Bushmen have the right to live on their lands.

Despite the ruling, Khama’s government has continued to prevent the Bushmen from living on their lands. It has banned them from accessing a well, which they rely on for water, and from hunting for food. At the same time, it has drilled new wells for wildlife and allowed Wilderness Safaris to erect a luxury tourist lodge with swimming pool on Bushman land. Over 25,000 people across the world have signed Survival’s petition calling on Wilderness Safaris to move its lodge off Bushman land.

While the Bushmen have turned to litigation to gain access to their well, the government is in negotiations with Gem Diamonds to construct a diamond mine on Bushman land.

Khama has previously referred to the Bushmen as ‘an archaic fantasy’, a view that has been echoed by members of his cabinet. Last month, speaking to the BBC, Botswana’s minister of environment, wildlife and tourism said he didn’t believe ‘you would want to see your own kind living in the dark ages in the middle of nowhere as a choice, when you know that the world has moved forward and has become so technological’. The vice-president has also been quoted as questioning why the Bushmen must ‘continue to commune with the flora and fauna’ when they could ‘enjoy the better things in life, like driving Cadillacs’.

Survival’s director Stephen Corry said today, ‘Many countries have laws to stop people insulting other peoples and their ways of life. There are sinister echoes here of racial superiority which should have no place in any modern democracy. It’s this thinking which is ‘backward’, not the Bushmen.’

Zimbabwe's diamonds are dirty, claims Wikileaks

A US document, which says that thousands have been murdered and those close to president Robert Mugabe have been enriched by illicit diamond trade in Zimbabwe and published by Wikileaks, has come as a big jolt to diamantaires in the world's biggest diamond cutting and polishing centre in Surat and also the founders of Surat Rough Diamond Sourcing India Limited (SRSDIL).

The Wikileaks expose on Zimbabwe's blood diamond trade has come at a time when the company formed by 1,500 diamantaires - SRSDIL -- is eagerly awaiting the clearance of rough diamond export from Zimbabwe by Kimberley Process Certification Scheme (KPCS).

"In a country filled with corrupt schemes, the diamond business in Zimbabwe is one of the dirtiest," according to a classified document dated November 2008 from the US embassy in the country, released this week on Wikileaks.

The Zimbabwean government, according to Wikileaks, deployed soldiers at the diamond fields in Marange in 2008 to seal off the area and clamp down on illegal mining, but rights activists say this resulted in serious rights abuses by the army. Villagers were uprooted and murders increased, the classified US documents said. The classified document cited a village chief as saying the government had relocated as many as 25,000 villagers in an attempt to secure more money.

The Wikileaks expose is likely to impact the ongoing decision making process by international diamond regulator -- Kimberley Process -- and the member countries on allowing rough diamond export from the Marange diamond fields in Zimbabwe. The KPCS has failed to break an international deadlock over Zimbabwe's suspended diamond export at two consecutive meetings. In the first meeting organised in Israel on November 1, no agreement was reached on whether to allow Zimbabwe to export its rough diamonds from Marange fields after opposition by the members from Canada, Europe and Australia.

The second meeting held at Brussels in mid-November, too, failed to reach any consensus on Zimbabwe stalemate. "The Surat industry has suffered a big setback from this development, especially the newly formed SRSDIL. The company has spent a good amount of money in the last two months to secure a deal from Zimbabwe," said a member of SRSDIL.

The Zimbabwe Diamond Consortium (ZDC) and the SRDSIL had signed a pact for the supply of $1.2 billion worth of rough diamonds mined at Marange diamond fields in October. But the pact may not see the light of the day after the Wiki expose.

In the last two auctions of KP certified goods organised by Zimbabwe government in August and September, 2010, about 90 per cent of the $100 million worth of rough diamonds sold, were purchased by the Indian diamantaires, especially from Surat. Recently, Zimbabwe announced of having mined 2.7 million carats of diamonds worth millions of dollars from Marange diamond fields and that it had an additional stockpile of 4.7 million carats of rough diamonds.


Read more: Zimbabwe's diamonds are dirty, claims Wikileaks - The Times of India http://timesofindia.indiatimes.com/city/surat/Zimbabwes-diamonds-are-dirty-claims-Wikileaks/articleshow/7095268.cms#ixzz181wrfIlF

Asian consumers boost diamond sales

Wealthy Asians have been crowding the international retail stores of U.S.-based Harry Winston Diamond Corp., putting a shine to third-quarter earnings and a polish to future prospects. But the company said its own captive source of gem diamonds, a 40-per-cent stake in the Diavik mine in northwestern Canada, won't be more generous in 2011, because of technical problems as extraction moves deeper underground.

CEO Frederic de Narp said yesterday said diamond sales were not only up in Europe but also in the Mideast, Russia and many parts of Asia. The volume of carats sold gained sharply from a year earlier -mostly because of the impact of the global recession on the 2009 period.

Quarterly revenue almost doubled to $140.9 million U.S., including a 48-per-cent jump at the retail level and a 70-per-cent surge in "bridal business." Earnings were $3.9 million, or 5 cents a share, compared with a small loss a year earlier. "Asian business will be our major focus for building future growth," de Narp said.

Mugabe's wife implicated in illicit Zimbabwe diamond trade

Zimbabwe President Robert Mugabe's wife was among those who gained millions of dollars from illegal diamonds mined in the east of the country, according to a US cable obtained by Wikileaks.

"High-ranking Zimbabwean government officials and well-connected elites are generating millions of dollars in personal income by hiring teams of diggers to hand-extract diamonds," US ambassador James McGee wrote to Washington in 2008.

"They are selling the undocumented diamonds to a mix of foreign buyers, including Belgians, Israelis, Lebanese, Russians and South Africans, who smuggle them out of the country for cutting and resale elsewhere."

The cable then discussed a meeting with Andrew Cranswick, chief executive of the British mining firm African Consolidates Resources, that had a claim to the Chiadzwa mine revoked by the Harare government, according to McGee.

"According to Cranswick, there is a small group of high-ranking Zimbabwean officials who have been extracting tremendous diamond profits from Chiadzwa," it said, naming Mugabe's wife Grace and Central Bank governor Gideon Gono.

The Chiadzwa mine is in the Marange district of eastern Zimbabwe.

The diplomatic message, released on Wednesday, said the diamond site had attracted a "swarm of several thousand local diggers" and "the police response has been violent, with a handful of homicides reported each week."

Other Zimbabwean government officials implicated in the siphoning of diamonds from the Marange fields include Vice President Joyce Mujuru and the head of the army, General Constantine Chiwenga, said the cable.

International regulator the Kimberley Process barred the sale of Marange diamonds in November 2009 following reports of human rights abuses by the army at the mine.

A monitor appointed by the watchdog in July partially lifted the ban, saying Zimbabwe had ceased abuses by the military, which seized control of the Marange fields in late 2008 and forced out tens of thousands of small-scale miners.

Hope springs eternal for ISO grading standard, but progress minimal

DCLA is Australia's premier diamond grading laboratory, and the only laboratory grading diamonds to the IDC rules. The IDC rules are the internationally recognised and accepted rules for diamond grading and diamond certification as set out by the WFDB, IDMA and Cibjo.

The attempt to secure an international diamond grading standard has been going on for the past three decades. Although there appears to be goodwill on all sides toward reaching an agreement, it seems far from clear that it will be achieved in the near future.

The absence of a single, internationally used diamond grading standard is one of the more contentious and persistent issues in the diamond and jewellery sectors. And it’s not for a want of trying. Many attempts have been made, but for a number of reasons all have fallen short of the goal.

As a result, there is no internationally recognised organisation that can determine equivalent educational curricula for gemologists, or to corroborate that all gem labs are operating in line with accepted procedures. Although there is general concurrence in the business as to how diamonds should be graded, there is no agreement, even among the largest institutions, as to the exact systems of measurement that should be adopted for clarity and cut.

The most obvious solution is set of standards recognised by the International Standards Organisation (ISO), and, indeed, in 1990, the painstaking process of formulating an ISO grading standard got underway. But after a about a decade and half it fizzled out unceremoniously, largely as a result of a lack of enthusiasm on the part of some of he largest players in the gemmological community.

ISO, a non-governmental body with representatives from 163 countries, was created in 1947. It has developed more than 18,000 International standards on a variety of subjects and some 1,100 new ISO standards are published every year. Its authority depends on its power to provide a guarantee of the integrity of those organisations that are allowed to display its logo.

The concept of a single grading system was first suggested in 1975 by the World Federation of Diamond Bourses (WFDB) and the International Diamond Manufacturers Association (IDMA). To that aim, the two organisations jointly established the International Diamond Council (IDC) and in 1978 at the World Diamond Congress approved the IDC Rules for Grading Polished Diamonds. HRD Antwerp became the largest lab to apply the IDC rules.

The effort to create an ISO standard for diamond grading that began in 1990 involved technical committee ISO/TC 174, which had been created at the initiative of both the jewellery and diamond sectors. Two working groups were formed—Working Group 1, which was charged with establishing a standard method for defining precious metals, and Working Group 2, whose role was to formulate a harmonized system for diamond grading.

Four parties were represented in Working Group 2: International Diamond Council; the Gemological Institute of America (GIA); CIBJO, the World Jewellery Confederation; and the Scandinavian Diamond Nomenclature (ScanDn). At the same time, an expert subcommittee was established. It would focus only on the technical issues, leaving commercial and political considerations aside.

In May 2002 — 12 years after it first began the project — two documents, one of 41 pages and the other of 39 pages, which together make up a Final Draft International Standard (FDIS), were circulated for approval among a list of ISO national member organizations that had expressed an interest in voting on the issue. But already at that stage, GIA, which operates the largest gem grading facility in the United States, had stated categorically that it had no intention of relinquishing its grading system in favor of one approved by ISO. As the then GIA President Bill Boyajian stated that year during a panel discussion in Basel: “We are confident that the system that we have developed could be accepted as an international standard.”

International Diamond Council Chairman Stephane Fischler says the main aim of securing ISO standards for diamond grading would be to bolster consumer confidence. Diamond jewellery buyers may be confused by the wide range of gem labs offering services, and would be able to rest assured that there is an added layer of protection when obtaining a grading report from an organisation that is ISO approved, he said.

“We have to recognise that consumers are demanding full transparency, but they are being flooded with a lot of freely available information, so we have to enable that by creating universal standards,” Fischler said. “I believe there is a lot of goodwill on all sides and that agreement will eventually be possible. I am quite hopeful that it can happen.”

“The IDC rules are supported by the World Federation of Diamond Bourses and the International Diamond Manufacturers Association, along with some labs in Europe and in Australia. In addition, the CIBJO Blue Book on diamonds is close to the IDC rules. We have already reached agreement with CIBJO on descriptors for synthetic diamonds, so we see that reaching a consensus is possible. There has been renewed interest between the IDC and CIBJO about a possible joint document. The IDC has sat around the table with the GIA, HRD, CIBJO and others to discuss this issue, but we have not yet managed to reach agreement for several reasons,” Fischler said.

“We have been in contact with the GIA for a long time on a general level, and that continues. Let us remember that the basis of modern grading has been created by GIA. There are some difficulties regarding for example, the Excellent cut grading nomenclature. But I believe there are some solutions to be found,” Fischler noted.

In the absence of an ISO standard, the CIBJO Diamond Blue Book is possibly the most used reference. It was compiled by the CIBJO Diamond Commission, composed of representatives of trade organisations and laboratories from around the world. In October 2006, a district court in Munich, Germany, used the CIBJO Blue Book when it delivered a ruling that declared the use of the term “cultured diamonds” by a synthetics distributor to be misleading.

Georges Brys, General Manager of HRD Antwerp, says that ISO issue has to be tackled with great sensitivity to avoid any impression under European or American law that an anti-trust issue was at hand. “We must hold discussions that are correct from a legal point of view,” Brys commented. “The talks should be in an environment where there are neutral people in the room, and that means IDC people who should coordinate the issue. That way, you have the WFDB, IDMA and CIBJO on board. HRD Antwerp already acts in accordance with the IDC rules.

“We must have a neutral party, such as the IDC, running such a meeting and keeping accurate minutes to ensure that there is no suggestion of restrictive measures; it must be open, transparent and objective. The IDC are the experts in this matter,” he stated.

Brys explained that one issue of concern was the sets of master stones used by the different labs. HRD Antwerp has been using its set of master stones for 40 years, while the GIA has been grading according to its set for around 70 years. “As the GIA said at the China Diamond Conference in Shanghai last week, it has hundreds of thousands of certificates out in the market,” Brys commented. “So if standards were now changed, consumers would not have anything to compare with. And that, after all, is the main aim, to ensure that consumers have a clear and standardised way of understanding what the diamonds on offer actually are in order to boost their confidence.”

Brys says he is hopeful because he believes all parties are coming closer together. “The fact that we are talking is a good step. All the labs have said they are in favour of finding an international standard to help consumer understanding and confidence. As they said at the meeting in China, they are willing to come together and discuss the issue. That is a very important first step,” Brys added.

Not everyone is convinced about the need for an ISO standard for grading, or the possibility, that it could be achieved. Among these is Roland Lorie, who heads the Antwerp-headquartered International Gemmological Institute (IGI) which has been operating since 1975. The grading is based on two commonly used international standards. I am not sure that the different labs will be prepared to compromise on the terminology, Lorie said. They will want to keep their terminology because they have been using it for many years. We are talking about a difference in terminology rather than one of standards.

Meanwhile, from a consumer point of view, Lorie says the discussion has already been going on for 30 years. They know the lab but they may not be familiar with the exact standards that are used, he says. They are looking for a certificate from a recognized lab that built up its reputation and expertise over a number of years.

This universal language or terminology has existed for 70 years or so and is used by almost everyone in the diamond business. Whatever the majority of the diamond trade is using should be taken to the ISO to be adopted, he said. Lorie believes that even if an ISO standard was created for diamond grading, it could not be completely enforced. How would they be able to check that a small lab, that may have the ISO accreditation, is using the agreed grading standard and not the one it was using previously? In addition, there are labs that have built up their operations and expertise for many decades and will continue to implement top-quality work. But what about a small lab that receives the ISO standard? It might feel that it does not have to work hard anymore.

There are small labs in the United States, for example, that are not subject to the same rules as the large labs who must ensure that a single customer cannot account for more than 20 percent of its overall business. There are small labs for whom one client can account for most of their work, and there are labs that are also dealers, so there is a clash of interests. Apart from that, how would ISO be able to inspect so many labs to check that their work is in line with the standard?

“I think the most solid proof of the quality of the larger labs was proven during the global financial crisis. Before that, in 2007 and 2008, you suddenly saw many new labs being set up with a lot of money being invested in establishing and marketing them. Following the crisis, we saw most of them simply fell away while the large labs survived quite well. This proves, I believe, that the bigger labs are appreciated for their expertise and the quality of their work. You cannot set up a lab overnight and expect that a lot of marketing will turn it into a brand within a year or two.”

Meanwhile, another Antwerp diamond source said that the problem was largely one of commercial interests. “The GIA did not want to lose diminish its brand by agreeing to grading standards that were not entirely those of the organisation itself. “There are commercial interests involved, and I understand that. They want to maintain their brand and not compromise it,” the diamantaire added.

It should be noted that while an ISO grading remains an elusive goal, ISO is firmly ensconced in the gemmology sector, and has been for almost 15 years. In February 1996, the HRD Certificates Department was officially accredited according to the standards EN 45001, ISO/IEC Guide 25 and the relevant clauses of ISO 9002, for the grading of polished diamonds. As such the facility became the first worldwide to obtain such accreditation.

Five years later HRD Antwerp was awarded a new international standard ISO/IEC 17025, which relates to the general requirements for the competence of testing and calibration laboratories. It was one of the first laboratories to have achieved such a status worldwide, and was the very first in Belgium and in the diamond grading community to do so.

The ISO accreditation held by HRD Antwerp and a select group of other labs shows that they are competent both from a technical and procedural perspective, and has also implemented proper quality control systems.

Botswana reaches diamond industry milestone

Botswana has long been the darling of the diamond industry, not only as the largest-producing country, but also as a model for beneficiation in Africa.
Last week, the country reached another milestone in its efforts to diversify its diamond-related activity and economy: the first sale of rough outside the De Beers - Debswana framework began in Gaborone.

Botswana quite naturally wants to gain as much leverage as possible from its diamonds and in that vein, the tender, by Firestone Diamonds, constitutes a significant event.

It marks another objective achieved in advancing the country's diamond hub programme and another step in developing Gaborone as an international trading centre.

Firestone is separately tendering 2,500 carats of rough from its BK11 mine in Botswana and an additional 12, 000 carats brought in from its Liqhobong mine in Lesotho.

The Botswana government granted the company its BK11 mining licence on the condition that the company tenders the goods in the country - a policy it has implemented with other developing mines, particularly Lucara Diamonds' AK6 mine, which is expected to come online late next year.

As a result of this policy, Firestone's tender will bring new international buyers to Gaborone, whereas before, only the 16 Diamond Trading Company Botswana (DTCB) sightholders were given licences to buy rough in the country.

For the first time, buyers will now be able to buy rough directly from a Botswana mine as De Beers-Debswana production is aggregated with other De Beers' goods before being distributed locally.

Botswana's diamond story unfolded with the first discovery in 1967, transforming the country from an agricultural, rural-based economy to one whose resource wealth has delivered consistent growth, barring the recession of 2009.

However, the country's mines are old and tired with a naturally limited lifespan. De Beers has invested heavily in the Jwaneng mine, the jewel in its portfolio, as it expects the Cut-8 project to extend the mine's life beyond 2017 by about eight years and 95 million carats.

The new mines currently being developed are nowhere near the scale of Jwaneng in either size or quality. Given these apparently diminishing long-term mining resources, it is therefore vital for Botswana to diversify its economy while the going is good. So far, the country has played its cards the right way.

Botswana launched its cutting and polishing industry in 2007 with the creation of DTCB to supply goods to the local sightholders. One of those sightholders, the South African Diamond Corporation (SAFDICO), subsequently developed the Diamond Technology Park, which opened in January 2009, thus centralising the industry's activities in Gaborone. Two weeks ago, SAFDICO announced its plans to develop a diamond-trading facility as Phase Two of the project, which is expected to be operational in the second half of 2011.

The Firestone tender could be viewed as the introduction to that platform while in the long-term, Botswana envisions that independent companies, located elsewhere in Southern Africa, will sell their rough in Gaborone. One can expect the government, considered investor-friendly and very accessible to the industry, to be at the forefront of the initiative. There are a number of hurdles that still need to be ironed out, however.

Doing business in Botswana must be made more appealing for foreign investors through relieving the double taxation on international companies operating there and developing better infrastructure, including Internet networks.

The country also has to convince the industry that Botswana is more than a niche location, which provides a competitive advantage for companies that got in early and are able to capitalise on the security of the rough supply now being offered there.

Most importantly, to build a sustainable trading platform, the country needs to ensure that a stronger volume of rough is made available to outsiders so that a steady stream of buyers comes through the technology park.

Activity breeds interest and it will take a lot more in the initial stages than just Firestone's production to prove to buyers that trading rough in Botswana is a worthwhile proposition. For this, the government will be looking at De Beers. The two entities are expected to soon announce a new marketing agreement pertaining to production from Debswana, in which they are equal partners, as their current contract expires at the end of 2010.

As discussions continue, it is expected that the government, which also owns 15 percent of De Beers, will try to exert its influence on other shareholders to allow the company to sell goods independently through the prospective trading platform.

While the idea may meet with some resistance from Anglo-American and De Beers' chairman, Nicky Oppenheimer, they have also already demonstrated their willingness to offer De Beers goods on the open market by allowing access to Diamdel online auctions beginning in April of next year.

Whether the coalition will go one step further to sell rough through Botswana's new trading platform remains to be seen.

What is certain is that while Firestone's rough tender gives Botswana reason to celebrate, recruiting De Beers will give the country's government the boost it needs to diversify the economy and ease some industry skepticism.
The tender may well represent a milestone for the country, but it is yet to prove significant for the global diamond sector. To achieve that, both industry and country still depend on De Beers.

Gemesis Goes White, to Market Directly to Consumers

Gemesis Diamond Company, which produces of gem-quality lab-created diamonds, announced that it is producing colorless diamonds. Until now, the company offered only yellow diamonds.


The company said the new line of diamonds is of excellent color and clarity, adding that most diamonds in current inventory average approximately half-carats; however, Gemesis succeeded in producing colorless diamonds larger than one carat.



The colorless diamond offering was not the only news from the company. Gemesis also plans to go directly to consumers, saying that it is in the final stages of developing its own jewelry line.



Gemesis will be launching a new e-commerce website in the coming months, combined with parallel sales through limited retailers who subscribe to the company program – including education, approach, and pricing philosophy. The company’s own Internet pricing will not undermine participating retailers, it promised.



The company also reported advances made with its fancy color stones, achieving a vivid yellow color. The new yellow stones will also be available on the e-commerce site.



In May 2008, Gemesis announced the beginning of regular production of pink diamonds. Maybe due to the economic crisis that followed a few months later, those diamonds were never widely sold in the market.