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Zim diamond smuggling: A reality or fallacy?

30 march 2012

The smuggling of diamonds from Zimbabwe’s Marange has been a subject of much debate and controversy since 2006 when the southern African country “discovered” the vast diamond fields.

So controversial was the issue that the Kimberley Process (KP), the United States and the European Union had to put Marange gems under a trade embargo.

Even though KP lifted the restriction late last year, Washington and the European Union still maintained sanctions on companies mining in Marange arguing that the diamond revenue was used to prop up President Robert Mugabe’s party.

Denials

Zimbabwe’s deputy mines minister Gift Chimanikire told Rough & Polished that reports of diamond smuggling in the country were based on speculation, adding that all companies operating in Marange had put up a high level of security.

The country’s mines minister Obert Mpofu also said that Harare had fully complied with the KP’s ideals, hence, its certification.

He said top geologist Mark van Bockstael from the European Union and Abbey Chikane from South Africa had concluded that Zimbabwe was over-complied.

However, one wonders how the ministers felt when it emerged that an Israeli pilot had been charged for trying to smuggle diamonds worth $2 million out of Zimbabwe. 

He was nabbed at the Harare International Airport on March 17 while trying to leave the country with more than 1 300 diamond pieces.

No work of artisanal miners

Center for Research and Development executive director Farai Maguwu told Rough & Polished that the value and type of the diamonds caught with the Israeli pilot clearly showed that they did not come from artisanal miners but from the storage centres of mining companies operating in Marange.

He said diamond smuggling was a well coordinated syndicate and the arrest of the Israeli was just a tip of an iceberg.

“I wonder how much Zimbabwe is losing through these diamond smuggling syndicates,” Maguwu said. “The Kimberley Process might want to pretend that there is no diamond smuggling in Zimbabwe, but the fact is that smuggling is so rampant.”

He said his organisation did a survey in Mozambique’s Villa de Manica and found out that pilots were smuggling Marange diamonds to China, Dubai and India.  

Maguwu said the lack of political will was largely responsible for smuggling of diamonds from the protected zones as witnessed by the quantities involved.

What is it with $2m?

Last year, Indian authorities arrested two men for smuggling diamonds from Marange field into the city of Surat.

India’s Revenue Intelligence Directorate arrested Zohra Desai and Prema Desai, both Indian nationals, with a 48,663 carat consignment of rough diamonds valued at some $2 million.

The two allegedly smuggled the diamonds from Zimbabwe through Kenya to Mumbai and were caught trying to sell the stones in Surat.

Chimanikire suggested then that the diamonds confiscated in Surat may not have been smuggled out of Marange recently but could be part of a stockpile amassed by a group of diamond-extraction workers fired last year or even before 2006.

Surat, a world diamond trading and cutting centre, was also the scene of a similar arrest in 2008 when Robai Hussain and Yusuf Ossely were held with $1 million worth of smuggled Marange diamonds.

The two were sentenced to four years in prison.

It is scenarios like these that make arguments of diamond smuggling in Zimbabwe gain currency.

Yes, there are high voltage barbed wire fences that surround the diamond mines in Marange and the processing plant's equipment.

Yes, there are several full body searches that are done when one gets closer to the sorting area where the diamonds are picked from the dirt.

Yes, diamonds are kept in a glass case and the sorters use gloves to drop the diamonds into an underground vault, something that makes it difficult for workers to touch any of the stones.

However, the question that remains is where are diamonds being found with ordinary citizens coming from with all this tight security?

Surely these should be “inside jobs” and one wonders how many stones nicodemously leave the country every night and day.

A South African diamond consultant, Keith Lapperman who spoke at a Mining Indaba in Harare last August said that Zimbabwe lost $500 million worth of diamonds through smuggling syndicates in 2010.

Finance minister Tendai Biti also said recently that out of the projected $77.5 million from diamonds, Treasury had received only $19.5 million in January and February this year.

This would likely throw the country’s 2012 budget in disarray as the targeted $600 million diamond revenue for the year would not be met.

Mpofu, however, said Zimbabwe wanted to surpass the target “but with sanctions it is difficult to achieve that”.

Some think that the poor inflows were not a result of sanctions as Zimbabwe was conducting diamond auctions away from the watchful eyes of its enemies.

Smuggling, they think, was the reason for the weak revenue inflows.

Openness with trade figures, whether on quarterly, monthly, half year or annual basis should be encouraged, as is the norm elsewhere, to avoid accusations of opaqueness.

Zimbabwe should also step up efforts to nip smuggling in the bud, as it was embarrassing for government officials to deny that no diamonds were being stashed out of the country, only to hear reports of individuals arrested attempting to leave the country with stones worth $2 million.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished