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Diamonds funding Mugabe's election
Business Day (SA)
December 30, 2010

http://www.businessday.co.za/articles/Content.aspx?id=130539

Enos Chikwere spills nine uncut diamonds from a bag at Restaurante Piscina, in Mozambique near the Zimbabwe border, and says they're worth 75000.

"I can supply all the diamonds you need," says Mr Chikwere, explaining that he smuggled them into Mozambique after buying them from Zimbabwean soldiers.

Mr Chikwere and hundreds of other border smugglers are part of a chain whose money flows back into Zimbabwe, whose president for three decades, Robert Mugabe, has ruled over four violent and disputed elections since 2000. Mr Mugabe's policies of land seizure helped to cause the economy, once the second-biggest in southern Africa, to shrink 50% in eight years.

The gems, from Zimbabwe's biggest diamond field, in the Marange region, are helping to enrich the 86-year-old president's party ahead of next year's vote, according to Human Rights Watch, Partnership Africa Canada and the Zimbabwean opposition party Movement for Democratic Change (MDC), trapped in a Southern African Development Community-enforced coalition.

Annual income from the gems may reach 2bn, assuming the country is able to export them freely, the state-owned Herald newspaper cited Mines Minister Obert Mpofu as saying in October.

Meanwhile, Mr Mugabe is trying to amass funds for the election campaign, says Tom Porteous, the UK director of New York-based Human Rights Watch, which has lobbied against abuses for the past 30 years.

"Revenue from the mines is serving to prop up Mugabe and his cronies," Mr Porteous said this month. "There are real concerns that diamond revenue will be used to fund political violence and intimidation of Mugabe's opponents."

Human Rights Watch cited interviews with unidentified soldiers, diggers, community leaders and members of the government and the parliamentary portfolio committee on mines and energy to support its allegations.

Partnership Africa Canada, an Ottawa-based nonprofit organisation, said in its report in June the Marange diamond field is controlled by the military and proceeds from the gems are not benefiting the country. It cited testimony in Zimbabwe's parliament, company statements and interviews with unidentified diplomats and illegal miners for its conclusions.

Illegal smuggling benefits Mr Mugabe because it is mostly carried out via the military, according to the two nongovernmental organisations and interviews with six smugglers and two dealers in and around Vila de Manica, where Mr Chikwere, clad in Diesel jeans and wearing two gold chains, was displaying his wares.

The army reports to the president.

The finance ministry, controlled by MDC second-in-command Tendai Biti, receives revenue only from legal diamond mining in the form of taxes.

Zanu (PF) denies the smuggling. "These are just inventions of the western imperialists who are trying to discredit Zanu (PF)," party spokesman Rugare Gumbo said this month in Harare. "There is no corruption at Marange."

Diamonds from Marange cannot be exported legally from Zimbabwe because the field hasn't yet met an international certification standard showing that proceeds from sales aren't used to finance conflict.

Human Rights Watch said in June that 200 miners were killed there in 2008 by the military, and also reported that the army controls most of the deposits and is forcing local community members to mine the gems on its behalf. Zimbabwe's elite, close to Mr Mugabe, are said to be getting rich from the smuggled diamonds.

While the Kimberley Process has allowed two "limited" auctions of gems from Marange this year, the state-owned Chronicle newspaper said an August sale earned the government 30m. By contrast, central bank governor Gideon Gono said in 2007 that smuggling from the Marange site was costing the country as much as 40m a week.

Mozambique is not a member of the Kimberley Process.

The soldiers are very open, says a Nigerian gem dealer in Chimoio, the capital of Mozambique's Manica province, who said he was Col Rambo. They give their cut to their superior officers, who surrender a percentage to politicians in Zimbabwe. He displayed a suitcase full of 100 bills he said amounted to more than 1m and said cabinet ministers were involved.

Johannesburg-based New Reclamation's Mbada unit, a 50-50 venture with state-owned Marange Resources, mines diamonds in Marange. David Kassel, New Reclamation's chairman, declined to comment when called on December 15. London-based Old Mutual , which owns "less than 6%" of New Reclamation, said in response to questions that its actions were guided by the Kimberley Process and Zimbabwean laws. No allegations of illegal action have been made against Old Mutual or New Reclamation. New Reclamation did not respond to requests for comment.

"We have not arrested anyone for dealing in diamonds because no one has reported to us violations of any law," Belmar Mutadiwa, a police spokesman for Mozambique's Manica province, said this month. "Most of the dealers operating in the province have been licensed by the government to buy precious and semiprecious stones."

A police station in Vila de Manica is on a street where dealers from Guinea, Lebanon, Israel, Sierra Leone and Nigeria — who all disclosed their nationalities — trade on the porches of their houses. Security guards sit outside.

Mercedes, Humvees and Range Rovers drive down the town's streets, lined by freshly painted houses sprouting satellite television dishes. By contrast, the 1200km drive to the region from Maputo runs through small towns with ramshackle buildings and grass shacks known as baraccas.

In Vila de Manica, smuggler Mr Chikwere boasted that there was no limit to the number of stones he could bring into Mozambique.

Vila de Manica has "become one of the premier purchase and departure points for Marange's illegal diamonds", Partnership Africa Canada said in a June report on its website.

"Diamonds are being sold in this district after they've been smuggled from Zimbabwe," said Jose Tefula, district administrator for Manica district, in an interview last week. "Locally, we don't have any diamonds, so the stones can only come from Zimbabwe."

A group of about 40 diamond dealers surrounded the vehicle in which two Bloomberg reporters were travelling in Vila de Manica on November 26. They banged the side of the car with their fists, blocked the escape route with motor vehicles, seized and damaged a camera and shouted "you're dying today".

Two policemen arrived and detained the reporters for almost an hour, saying they should have sought permission to enter the area. No action was taken against the dealers. Bloomberg

Gems from Zimbabwe's biggest diamond field, in the Marange region, are helping to enrich the 86- year-old president's party ahead of next year's vote.

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