Financial News

  • 11 December 2013, 10:08

Zimbabwe Sells 300,000 Diamond Carats In EU

Zimbabwe is to auction 300,000 carats of diamonds in the European Union, nearly three months after sanctions on the country's state mining company were lifted.

Wednesday's sale will be the first ever of the troubled African nation's diamonds in Antwerp.

Belgium, the centre of the global diamond trade, had pushed hard for the EU to lift sanctions on the state-owned Zimbabwe Mining Development Corporation (ZMDC), in line with an earlier agreement.

ZMDC operates seven joint-venture mines in the Marange diamond fields, producing eight million carats last year and generating 415m in exports.

The Antwerp World Diamond Centre said the auction of the 300,000 carats of diamonds - equivalent to 60kg - would increase transparency in Zimbabwe's diamond industry.

"Antwerp is convinced that the combination of solid transparency, accountability and potentially increased mining revenues will contribute to a sustainable social and economic development of Zimbabwe," the AWDC said.

Belgium has said lifting EU sanctions on ZMDC would increase Zimbabwe's tax revenues by 245m a year.

Diamond revenues were a source of conflict in the previous coalition government formed by President Robert Mugabe and long-time opponent Morgan Tsvangirai.

Mines minister Walter Chidhakwa said on Monday that companies operating in Marange had reported alluvial diamond deposits, which are nearer the surface and cheaper to extract, were fast depleting.

The companies are now asking the government for new mining concessions and say it is becoming too expensive to mine deeper into the ground.

The Marange diamond fields, 240 miles east of the capital Harare, have been a focus of controversy since 20,000 small-scale miners invaded the area in 2008 and were then forcibly removed by soldiers and police.

Human rights groups say up to 200 people were killed during the process, charges denied by the Mugabe government.

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