Group Disputes Mines Minister’s Claims of Marange Demilitarization

by Admin on December 3rd, 2009

Zimbabwe is facing heavy pressure from the Kimberley Process Certification Scheme (KPCS) to place the Marange diamond fields under the control of private partners and to pull military units out of the area. However, an institute in Mutare, Zimbabwe has challenged a recent statement by mines minister Obert Mpofu, who said that the military is pulling out of the Marange, located in the Manicaland province and the scene of alleged grave human rights violations.

The Center for Research and Development in Mutare carried out its own investigation and found that the military is not pulling out of the rich Chiadzwa alluvial diamond field. Harare has named several private partners, but companies, including the Rapaport Group, have said they will ban Marange diamonds. South Africa’s Old Mutual said it is reviewing its stake in New Reclamation Group, which is among the companies Harare has invited into the Marange fields.

Rights groups say that more than 200 people have been slain in the Marange field by soldiers and police. A Kimberly Process (KP) team that visited the area concluded there were serious violations of human rights and extensive illegal trading in diamonds.

Center director Farai Maguwu told VOA Studio 7 reporter Jonga Kandemiiri that soldiers have only left the claims being worked by Mbada Diamonds and Canadiles Investments, two Harare partners of New Reclamation.

Zimbabwe’s Military Elite Maintains Control of Marange Fields

by Admin on December 3rd, 2009

 

The two companies awarded contracts to mine the controversial Marange fields in Zimbabwe, Canadile and New Reclamation Group, are controlled by the country’s top military personnel, a report in Britain’s Sunday Times revealed. At the Kimberley Process (KP) plenary meeting in November, Zimbabwe announced that it had recruited foreign investors to work the mine there, successfully convincing the enforcers of the Kimberley Process Certification Scheme (KPCS) that it has complied adequately enough to receive a second chance as a KP member.

Following a KP review conducted last June, which reported serious human rights abuses in the area, including the murder and rape of local diggers by military forces, Zimbabwe’s participation in the KPCS was called into question. Human Rights Watch (HRW) reported that around 200 people were gunned down by the military in late 2008 and that the abuses have continued, with some occurring as late as October 2009. As part of its KP work plan, Zimbabwe agreed to demilitarize the Marange fields and bring in private security companies to secure the area.

However, according to the Times, both of the companies contracted to mine the Marange are run by military chiefs who have positioned themselves there to profit from the mine and with it, to win a claim to political power. The report noted that the Marange contracts were awarded by mines minister Obert Mpofu, who is identified on U.S. and European Union (EU) sanctions lists as an undesirable Zimbabwean figure. Mpofu has admitted to being in business with the defense force chief, General Constantine Chiwenga, as well as to being protected by him.

The contracts were also reportedly granted without the knowledge of Prime Minister Morgan Tsvangarai, who shares power with Mugabe, despite a recent Harare High Court ruling that confirmed that the fields are owned by the British-registered mining company African Consolidated Resources (ACR).

The two companies are alleged to already be operating on the ACR claims, with Canadile mining the southern area and New Reclamation, a South African scrap metals dealer, working the northern section. While the country is reportedly recruiting investors for the remaining three Marange claims, ACR’s chief executive officer (CEO), Andrew Cranswick, recently explained to Rapaport News that its 1,800-hectare claim area, where Canadile and New Reclamation are operating, constitutes the richest part of the Marange fields.

Among the directors of Canadile, the Times indicated, is Lovemore Kurotwe, who commanded a battalion that massacred civilians at Entumbane near Bulawayo in the Matabeleland massacres, shortly after Mugabe came to power in the wake of Zimbabwe obtaining independence as a nation. Kurotwe is the nephew of the late General Vitalis Zvinavashe, the member of the Zimbabwe African National Union-Patriotic Front’s (ZANU-PF) political elite who the UN identified as one of the main figures to profit from the plunder of diamond fields in the Democratic Republic of the Congo (DRC). Kurotwe also reportedly has an Israeli foreign partner who has been in jail in Angola for smuggling.

The report indicates there are deeper connections between the Zimbabwean government and New Reclamation through Robert Mhlanga, a key Zimbabwean figure in the syndicate. Mhlanga was Zimbabwe’s first black helicopter pilot and worked as a courier for Mugabe’s late first wife, Sally. Mhlanga is said to have made a fortune through various projects in Africa and was active in the DRC’s diamond trade when Zimbabwean troops fought there. He was also a key witness in an attempt to frame then-opposition leader Tsvangirai for treason in 2003, testifying that he had contact with an Israeli spy who claimed he was hired by Tsvangarai to kill Mugabe. In addition, Mhlanga enjoys freedom of the skies both inside and outside Zimbabwe, bypassing the need to pass through the usual customs controls.

The Times further disclosed plans to convert the old Harare domestic air terminal into a diamond-cutting center, which Mhlanga is involved in. This would enable Zimbabwe to avoid having its rough exports held up by the KP monitor recently appointed to check all diamonds exported from Marange.

The KP, which monitors the global trade of all rough loose diamonds to ensure they don’t include conflict diamonds, and Zimbabwe have adopted a 12-step working plan to ensure that the Marange is fully compliant with KPCS standards.

See the full Times article here.

Botswana Pushes Creation of Diamond-Trading Market

by Admin on December 3rd, 2009

 

As the keynote speaker at the World Federation of Diamond Bourses (WFDB) meeting in Antwerp in November, Dr. Akolang Tombale pulled no punches about his country’s ambitions within the diamond industry. Botswana, after all, is the world’s largest diamond producer by value and remains heavily dependent on the industry.

Tombale, whose official title is coordinator of Botswana’s Diamond Hub project, stressed the need for Botswana to ensure that its diamond legacy stretches beyond the realm of mining. “We believe as Botswana, we should venture into the downstream diamond industry both through the current developments and…extend the potential of loose diamonds to greater propositions,” he told the November gathering of global diamond bourse presidents.

While he was careful not to present Gaborone as a threat to any of the established trading centers, such as Antwerp, Ramat Gan, Mumbai and perhaps most importantly, neighboring Johannesburg, Tombale clarified Botswana’s ambitions. “We cannot entrust our national survival on people who, when it makes business sense, can switch their interest any time and do something else that suits them at the time,” he said. “It is simply too important for us to abdicate our responsibility or leave anything to chance.”

Diversifying Diamonds

Tombale, in his own words, has become the unofficial face of the Botswana diamond industry. He is responsible for advancing the industry from its sole dependency on mining through the creation of a beneficiation industry and, in the next stage, the development of a trading platform. 

Given the numbers, it’s easy to understand why Botswana would feel a need to diversify its economy away from heavy reliance on diamond mining. The country produces approximately $3.2 billion worth of diamonds annually, which account for about 70 percent of Botswana’s export revenue, 45 percent of its government revenue and 35 percent of its gross domestic product (GDP). As a result of the global economic crisis, which has seen the country’s diamond production fall by approximately 40 percent, its GDP is expected to fall by about 10 percent in 2009, according to the International Monetary Fund (IMF), after years of consistent growth.

Despite the economic downturn, Botswana has already seen significant progress and investment in developing its diamond industry downstream over the past two years. De Beers, which celebrated 40 years of partnership with the country this year, set up its main sorting facility in Gaborone in March 2008 and established the Diamond Trading Company Botswana (DTCB) to supply diamonds to 16 manufacturers there. To date, Tombale reported, 15 factories are up and running, with the last one due to launch soon. In addition, under the guidance of DTCB sightholder Safdico, the Diamond Technology Park was launched in January 2009 for an investment of $50 million and is being billed as the central hub of Botswana’s diamond-cutting industry. ABN AMRO also recently opened a branch in Gaborone.

Trading Platform

Tombale, however, envisions accomplishing much more and stressed that the time is right to take the next step in building the hub by encouraging third-party trading within the country. He explained in an interview with Rapaport News that the motivation for establishing a diamond-trading platform in Botswana is two-fold.
 
“The idea is to have a window that we can take some part of our production and market it through the platform,” Tombale said. “Secondly, we need to encourage people who are marketing and trading secondary diamonds to set up some of their operations in Botswana.”

As it stands, Botswana’s fate is intrinsically tied to De Beers. The two have joint-venture agreements as equal owners of the mining company Debswana and the marketing company DTCB. The Botswana government also has a 15 percent stake in De Beers. The creation of a trading platform in the country could cause a break in that relationship, although Tombale stressed that this would not spell the end of the Botswana-De Beers relationship. Rather, “moving forward, not all of Debswana’s production will be sold through DTCB,” he explained.

As an alternative, the country is planning to host rough diamond tenders of stones from Debswana mines and other new mines that are expected to come on line in the future and to create a facility for third parties to host tenders. Tombale said he hopes the new diamond-trading platform will be in place by the end of 2010, allowing others to trade in the country, while the independent marketing of Botswana diamonds “will come a bit later, probably in 2011.”

Price Discovery

He added that introducing the tender system for selling Botswana’s diamonds will enable some price discovery for the rest of Debswana’s production. “The hope is that Debswana and De Beers and DTC will be able to use the tool to monitor their prices as well,” he said. While De Beers hosts tenders through its Diamdel subsidiary, it has avoided the format for the majority of its production, opting to sell its diamonds through long-term agreements with sightholders.

Tombale stressed that the Botswana tenders should not work against the De Beers format, but rather complement it, though he added that he believes the market will continue to move further away from the “cartel mentality,” whereby “we all need to learn that there is no longer one individual that sets the price benchmark.”

In making this statement, Tombale lent his voice to the tender versus sightholder system debate that surfaced at the Antwerp Diamond Symposium, which preceded the WFDB meeting. This debate was sparked by the news that Rio Tinto has dropped five of its long-term customers and is planning to start hosting tenders for a minor portion of its production.

“The current environment is showing us that things are not the same anymore,” Tombale said, referring to both the producer-manufacturer relationship and rough price dynamics.

A Matter of Survival

As a result, and as Botswana seeks to secure a more independent role in the industry, its relationship with De Beers seems on the verge of changing, forty years after the two first forged their partnership. As a spokesperson for the country and the face of Botswana diamonds, Tombale couldn’t emphasize the importance of the move to the country and his fellow ‘Motswanans’ enough. 

“We don’t want to be left at the end of the day without any diamonds when mining ends, so we are trying to build an industry that goes beyond producing,” Tombale said. “That’s an objective far bigger than the relationship with De Beers. It’s a matter of our survival.” 

Botswana Guards Against Illicit Diamond Trade

by Admin on December 3rd, 2009

Botswana is currently doing an audit to make sure that illicit diamonds do not enter the country when its independent diamond market starts operations. The permanent secretary in the Ministry of Minerals, Energy and Water Resources, Gabaake Gabaake, said at the first Diamond Town Hall Meeting that the government will create a clearing house to block illicit diamonds entering the country from independent producers and manufacturers. He said the process of selecting independent producers is going on and the response has been good. “We are busy selecting key partners but because we want to start small, we will initially choose a small core group,” Gabaake explained.

The government set up an ambitious plan to make Gaborone become one of the leading diamond hubs in the world and that dream will be realized through the Diamond Hub. The proposed independent diamond market will run parallel to the current De Beers-Diamond Trading Company Botswana (DTCB) platform, which exclusively markets diamonds from Debswana mines.

Representatives of government and De Beers said this past week that they are committed to the realization of the independent market. Both quashed reports that De Beers is not happy about the arrangement, which is seen as a threat to its existence in a country that produces 25 percent of world’s rough diamonds.

“There is no difference of opinion between us and De Beers,” Gabaake said. He stated that government is not planning to trade diamonds from Debswana, but will encourage other producers locally and abroad to relocate their activities to Gaborone by offering incentives like relaxed taxation.

“Our dream is to evolve from a leading producer by turning Gaborone into a world diamond center because we believe this can act as a catalyst for economic diversification,” he said. Gabaake added that the government is reviewing its fiscal regime to create favorable tax incentives for the diamond industry. “We hope to have finalized that by early next year,” he stated.

There will be high-level security for the huge flow of diamonds to be traded in the country on the independent market and Gabaake said that construction of a secure transfer facility at the Sir Seretse Khama Airport is near completion.

The independent marketing channel is part of a strategy established in 2002 to make the country shift from being a producer to a world diamond center by facilitating the development of downstream industries — commonly known as beneficiation. The government realized that the country’s main mines, which have been producing for 30 years, might be exhausted, hence revenue may reduce drastically. This created the need to look for other alternatives like a diamond center and a viable and sustainable market that will survive beyond the lifespan of the Jwaneng and Orapa mines.

De Beers has already made major concessions for the past two years, during which it established the DTCB and agreed to the aggregation of its entire international diamond production for its relocation to Gaborone. The Diamond Hub will have a rough and polished trading center, a cutting and polishing center, a jewelry manufacturing and retail branch and ancillary businesses.

Through a facility that will come complete with a trading floor that will operate like a stock exchange, Botswana will trade diamonds from other countries. However, during the Town Hall Meeting, it seems that the country’s government was not sure whether to sell the diamonds through tenders or auction.

Loose Diamonds are Going Green: 2010 Fashion Trends

by Admin on December 1st, 2009

 

The year 2009 is almost upon us and as with every year, a new day brings a new fashion trend. Jewelry is going green this year and natural material will top the list of must haves. Conflict Free Diamonds and green materials will reign on the top of the jewelry list and wearing them will be all about drowning yourself in accessories.

The 2010 fashion trend for jewelry offers a sort of celebration for Mother Earth and this celebration is nothing less than huge. Large socially conscious jewelry pieces created from natural materials will don the necks, wrists and maybe even the waists of some of the most fashion forward people in the world. The point is to look smaller than your jewelry and 2010 fashion trend jewelry offers just that effect.

Gems are also moving toward the natural and thus the wild. The worldly nature of gem jewelry tends to focus more this year on bringing the 2009 fashion trend for jewelry out of America and into the world market. Traditional African styles are on the top of this list, on of the most popular is the Dreams of Africa ® Diamond Pendant by Whiteflash. Another bonus to purchasing jewelry items from Whiteflash.com can be found in their charity focused sub lines, Dreams of Africa and AWEAR: Jewelry for Conscious Kids.  What is so unbelievably unique about these lines is that a substantial portion of the proceeds from sales, 100% profit from Dreams of Africa and 25% from AWEAR items, goes to support children in nations hit hard by the blood diamond trade.  Gifting with a cause is another powerful trend that stretches hard earned dollars way beyond their face value.  In a time when conscious spending is paramount, this perk makes you feel good about spending.

This holiday season Whiteflash is beginning an initiative to educate consumers about conflict diamonds and how to purchase socially conscious gifts for your loved ones this holiday. Whiteflash.com introduces “Green Love” this holiday season. As an online e-tailor we know that it is all about your peace of mind and your wallet. Right now if you order any Whiteflash conflict free diamond during the period of November 29^th to January 25^th you will be automatically entered to win your choice of Mini Dreams of Africa pendant or Dreams of Africa ® earrings made with Whiteflash A Cut Above ® melee diamonds in your choice of white or yellow gold. Two lucky winners will be selected.

For the younger crowd, charms and brilliant gems are still on top of the list. These all time favorites do not seem to be moving from the top for a long time in the future, either. It seems the younger generation has found something it likes in fashion jewelry trends and plans on sticking with it.

Ladies, 2010 is the year of our Mother Earth and the celebration will be large. The time has come to throw out those large silver hoops, leave the chain belts behind and scrap the layered metal necklaces. This year wearing natural materials such green jewelry and conflict free diamonds are what the in crowd will be wearing.

IDMA and WFDB Presidents Support Ending Diamond-funded Conflict

by Admin on December 1st, 2009

 

In a joint statement, the presidents of the International Diamond Manufactures Associated (IDMA) and the World Federation of Diamond Bourses (WFDB) voiced their unanimous support for the Kimberly Process Certification Scheme as well as the principals of the World Diamond Council.

 IDMA and the WFDB reconfirm their commitment to end and prevent the use of rough diamonds for the purpose of funding conflict, anywhere in the world.

We reiterate that our endorsement of the Kimberley Process, the World Diamond Council and the Supportive System of Warranties remains strong,” they declared after intensive discussions at the 2009 Presidents’ Meeting held in Antwerp earlier this week.

Zimbabwe’s decision to not export rough diamonds form Marange until it fully implements the monitoring system was duly noted by the two presidents. They reiterated their expectation that organizations adhere to the stringent controls agreed upon at the KP Plenary meeting in Namibia on November 5.