20100715
allafrica

KIMBERLEY Process Certification Scheme (KPCS) negotiators last night broke the deadlock on Marange diamonds after Zimbabwe agreed to a deal that allows it to export diamonds under strict monitoring and regulation.

Governments, civil society and industry players who form the KPCS agreed to the deal following two days of tough negotiations that saw both Zimbabwe and members who had been resisting certification climb down from their hard and fast positions.

The KP is a voluntary 75-member joint government, civil society and industry body formed to stem trade in diamonds used to fund conflict or mined in conflict situations. The KP controls over 90% of the alluvial diamonds market, making it one of the most influential players in the industry.

Discussions broke down several times during the two-day mini-summit on Zimbabwe held on the sidelines of the World Diamond Council Annual Meeting in Russia's second city of St Petersburg, according to information from Russia.

Under the compromise deal, Zimbabwe will be allowed to sell a limited stock of diamonds between now and September 1. The KP will then send a review mission before any further exports.

The certification of Marange diamonds however still faces legal hurdles back at home where an ownership wrangle between the government and London-listed firm Africa Consolidated Resources, which was booted off the fields in 2006, is before the courts. A standing Supreme Court ruling states that Marange diamonds should be kept. However, Finance minister Tendai Biti on Wednesday said the company and the government should pursue an out-of-court settlement on the matter.

It was not possible to get comment from ACR on the KP decision last night, but the firm last week said government had refused a proposal to export the diamonds under a compromise deal.

Mines and Mining development minister Obert Mpofu, who had threatened to export outside the KPCS system was reported as being jubilant after the St Petersburg breakthrough.

"I want to assure everyone that Zimbabwe means business. We will adhere, we will comply. We will not let you down," Mpofu was quoted as saying.

The Zimbabwe Independent understands that various stakeholders had weighed in with proposals that included the inclusion of civil society in monitoring mining and shipment of Marange diamonds.

"The possibility of a deal was high but then it depended on Zimbabwe's willingness to accept some measures because certification was never going to be carte blanche," said a civil society participant who attended the meeting in Russia.

South Africa, the sources said, had proposed that the KPCS should go ahead and certify Marange diamonds for immediate export while the organisation would continue to monitor the situation, a position that appears to have been later fine-tuned and adopted by negotiators.

Abbey Chikane, the KP-appointed monitor whose recommendation for Zimbabwe to start exports of Marange stones is a South African national and the founding chairman of the KPCS.

The St Petersburg mini-summit was a follow-up to a KP meeting held in Israel last month that was deadlocked over the issue. The month-long imprisonment of resource activist, Farai Maguwu, contributed to civil society and some Western countries' resistance for Marange diamonds certification at the Israel meeting.

Maguwu's release on bail by the High Court on Monday helped soften the stance, although rights groups still complain that soldiers guarding swathes of Marange fields continued illegal mining and human rights abuses.

KP certification under tight control and monitoring would help Zimbabwe improve on accountability. On Wednesday, Minister of Finance Tendai Biti told MPs during the presentation of the mid-year budget review that treasury could not account for diamonds worth US$30 million sold outside the KP system. Biti said the inclusive government had agreed on the need for a Diamond Act to ensure that all mining of alluvial diamonds would be conducted by and through the state. Biti was quoted this week as saying that he would rely on diamond revenue rather than foreign aid to finance the country's expenditure. Biti said treasury should handle the diamond revenue to avoid leakages.

Chikane in his May 2010 report recommending the export of Marange diamonds said the two firms mining in Marange, Canadile Miners and Mbada Diamonds, met minimum KP stands. He recommended that the soldiers should remain in unsecured fields in Marange until these are allocated to private investors who would provide their own security.