Zim diamond sale unlawful — ACR

ZIMBABWE’S usually divided cabinet on Tuesday unanimously endorsed the export of diamonds mined from the disputed Marange fields, but a London-listed firm at the centre of an ownership fight says the planned sale is unlawful.

Cabinet ministers from President Robert Mugabe’s Zanu PF party and the two MDC formations explicitly agreed to the exports after closing ranks on sticking issues on transparency of mining operations, strictly regulated sales and new laws to regulate alluvial diamond mining.
Sources told the Zimbabwe Independent that cabinet had fully supported measures to export Marange diamonds under strict regulation and monitoring.

Zimbabwe presented a united front in lobbying the Kimberley Process Certification Scheme (KPCS), a diamond monitoring group which controls over 90% of the alluvial diamond market, to allow Marange diamonds to be sold under the organisation’s certification.
The KPCS last week allowed Zimbabwe to trade limited stocks of Marange diamonds until a review team visits the country and makes recommendations on whether the body should allow full exports.

London-listed African Consolidated Resources (ACR), which has a Supreme Court ruling in its favour, yesterday warned international buyers not to buy stones from Mbada and Canadile.

ACR CEO Andrew Cranswick said: “We welcome the KP approval for resumption of Zimbabwean diamond trade but remind all would-be sellers and/or buyers that KP certification relates only to conflict issues and they do not claim to certify rightful ownership by the sellers.  Further, they have no jurisdiction over Zimbabwe’s Supreme Court in this regard. I reiterate that any sale of the goods from Marange will be in contravention of the Supreme Court ruling and no-one is above that ruling.  We therefore stress the urgency of settlement and assuming that is achieved, a subsequent joint application to the Supreme Court seeking the annulment of their order by consent.”

Sources said cabinet was in a “celebratory mood” on Tuesday as Mines and Mining Development minister Obert Mpofu presented a report detailing the KPCS decision, taken after protracted talks in Russia.

According to sources, Prime Minister Morgan Tsvangirai’s ministers, who had joined civil society in calling for the withdrawal of soldiers in Marange and an end to alleged rights abuses by soldiers controlling the fields before trade could resume, had backed down after winning concessions on new regulations.
Failure by the international community to fund Zimbabwe’s economic recovery also resulted in the MDC backing down on their tough stance after realising that diamond sales could be the only feasible way to inject money into the economy.

In his mid-term budget review statement, Finance minister Tendai Biti alluded to consensus in government on the need to craft a Diamond Act that would ensure that all alluvial diamond mining would be done by and through the state. The law aims at curbing leakages and opaque licensing that dogged Mbada Diamonds and Canadile Miners, joint venture firms between the government and South African investors.

The Diamond Act would be supported by new measures that would force parastatals and government agencies such as the Zimbabwe Mining Development Corporation from entering into partnerships without cabinet approval.

Although a KPCS appointed monitor, Abbey Chikane, is set to travel to Zimbabwe next month to stamp and supervise sales following the decision in Russia, local legal hurdles still remain for Marange stones to trade unhindered.

ACR was kicked out of Marange in 2006 but subsequently won a High Court case confirming its right to land where Mbada and Canadile are mining.
Government has in the past illegally exported diamonds to Dubai in violation of a Supreme Court ruling which ordered an immediate freeze in all mining activities at the controversial Chiadzwa diamond fields.

Zimbabwe Mining Development Corporation (ZMDC) is working with Mbada Diamonds and Canadile in joint-venture partnerships hurriedly formed and given licences without going through transparent procedures last year.

ACR says all the diamonds mined by ZMDC since 2007 and now by Mbada and Canadile were extracted from its claims. The company has been fighting in the courts to reclaim its concessions.

Cranswick, however, said he was optimistic government would approach them soon with some kind of a settlement.
This comes after Finance minister Tendai Biti highlighted the need for an out-of-court settlement.
ACR, according to other reports, is keen on having Biti as a mediator.

Last September, Justice Charles Hungwe ruled in favour of ACR and said his order should stand notwithstanding an appeal.
Mpofu, ZMDC and the Minerals Marketing Corporation of Zimbabwe appealed and the Supreme Court ruled in February that Mbada and Canadile should “cease all mining activities” in Chiadzwa pending the finalisation of the appeal because ACR could suffer “irreparable damage” if it eventually wins in the courts. It, however, suspended Hungwe’s order.

Farai Mutsaka/Chris Muronzi