Zimbabwe diamonds lose luster

Aug. 24, 2010 at 8:34 AM

HARARE, Zimbabwe, Aug. 24 (UPI) -- An auction of diamonds from Zimbabwe brought in less than expected revenue as the country struggles with transparency issues with the stones, an official said.

The Kimberley Process, the group regulating international trade in conflict diamonds, agreed to let Zimbabwe resume limited exports of the stones last month.

The agreement came after Zimbabwe freed an activist arrested in June for giving investigators false information on conditions in the country's diamond fields.

Obert Mpofu, the Zimbabwean mining minister, said the diamond auction brought in $56.4 million. Finance Minister Tendai Biti said the revenue was closer to $46 million, the United Nations' humanitarian news agency IRIN reports.

Economists said Zimbabwe needs to raise about $8 billion to revive the national economy.

Innocent Makwiramiti, a former executive on the Zimbabwe National Chamber of Commerce, said transparency was still problematic in the diamond trade.

"There are powerful people who are likely to use their positions to smuggle the diamonds out of the country, while illegal mining might continue for some time," he told IRIN.

The Zimbabwean army seized the lucrative Marange fields in 2008, and some reports have said Marange diamonds are funding the Zanu-PF Party headed by President Robert Mugabe. Mugabe threatened in February to leave the Kimberley Process, but Mpofu said Zimbabwe is "ready and willing" to work with the organization.

A second auction of 4.4 million carats worth of diamonds is scheduled for September.

Like Us on Facebook for more stories from UPI.com  
Latest Headlines
Top Stories
Compact cannon for British armored vehicles
Ford recalls 432,000 North American vehicles over software bug
Aetna to acquire Humana for $37 billion in cash, stocks
New Zealand military receives medium heavy military trucks
BBC to lay off 1,000 people to make up for $234M in lost revenue