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Traders warned against buying Mbada diamonds

LONDON-LISTED Africa Consolidated Resources (ACR) has warned international diamond traders against buying over 3, 5 million carats it says were recently put on display by Mbada Diamonds, one of the firms mining stones on disputed claims in Marange.

ACR’s warning came as the Kimberley Process (KP), a civic society, government and business organisation established to stop trade in conflict diamonds, meets in Tel Aviv, Israel, from Monday to Wednesday.  Zimbabwe is set to be high on the agenda.
The Tel Aviv meeting is, among other issues, expected to vote on recommendations by its own monitor Abbey Chikane for Marange diamonds to be authorised to trade under KP certification as conflict-free stones.

In a letter to potential buyers who could be swayed by a possible KP greenlight, ACR London-based lawyer Russell Phillips warned that a KP certification would not supersede a Supreme Court ruling made in February this year.

Chief Justice Godfrey Chidyausiku ruled that diamonds mined on the disputed claims should be lodged with the Reserve Bank of Zimbabwe for safekeeping until the High Court determined the ownership wrangle.  ACR claims these are the same diamonds that Mbada is displaying to potential buyers.

 

“It has come to our client’s attention that (diamonds) which are all or almost all the property of ACR (and in this it asserts it has the support of the Zimbabwe courts) were available to be viewed at Harare Domestic Airport in Zimbabwe and that your firm may have diamonds, including such diamonds and therefore the potential purchase of the diamonds could embroil your company, servants, or agents in ongoing litigation,” read Phillips’ letter dated June 11 and circulated to several Dubai and Belgium-based buyers who have in the past shown interest in Marange diamonds.

“Therefore, if you are interested in a purchase or purchases from the 3,56m carat lot recently on display at Harare Domestic Airport by Mbada Holdings, our client’s legal position is that the sale has not been conducted in accordance with Zimbabwe law and orders of its courts.”
Mbada chairman Robert Mhlanga yesterday refused to comment.

Government stripped ACR of its mining claims in 2006 and awarded the rights to Mbada Diamonds and Canadile Miners, joint venture firms between the Zimbabwe government and South African investors last year, resulting in the ownership dispute.

Buoyed by what appears to be imminent KP certification, Zimbabwe has said it would sell the disputed diamonds, a move that ACR says will result in serious legal challenges that would also target buyers.
Chikane’s latest report states that Mbada and Canadile, which have cumulatively stockpiled in excess of 4, 5 million carats while awaiting the KP green light, have satisfied minimum requirements.

In making his recommendations, Chikane rubbished claims that the military was still involved in illegal diamond mining and human rights abuses in Marange presented by activists such as arrested and detained Farai Maguwu.

Rights groups have warned that the KP’s credibility would come under scrutiny if it adopted Chikane’s recommendations, particularly in light of continuing illegal mining by panners working allegedly in syndication with soldiers and Maguwu’s incarceration. Previous KP investigations alleged gross human rights abuses and rampant illegal mining by soldiers as some of the weaknesses affecting Marange diamonds certification.

Human Rights Watch, which has closely followed goings on in Marange, said the KP’s meeting next week should dismiss Chikane’s recommendations because they were not based on facts on the ground.

“Human Rights Watch has received new reports that soldiers in Marange are engaging in forced labour, torture, beatings, and harassment. Human Rights Watch documented rampant killings and other abuses in Marange last year. Despite these ongoing abuses, Abbey Chikane has recommended allowing diamond sales from Marange to resume,” said Rona Peligal, acting Africa director at Human Rights Watch.

“The Kimberley Process risks total irrelevance if it ignores these ongoing abuses. If the Kimberley Process can’t take real action on an issue like Zimbabwe, then what is it good for?”
Zimbabwe desperately needs Marange diamonds revenue to fund economic recovery after international financiers and investors dried up support because of policy inconsistencies and fears over how the indeginisation law would be implemented.

But without proper regulation, fears are that the money could end up enriching the power-elite in government. — Staff Writer.

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