African Consolidated Resources chief Andrew Cranswick told United States ambassador Charles Ray that Mbada, one of the joint-venture partners in the Mrange diamonds, could produce gem quality and industrial diamonds worth over $1.6 billion a year. And it could increase this production 10-fold.
At the time ACR legally owned the Marange diamonds but the government had gone ahead to enter into partnership with Mbada and Canadile.
Full cable:
Viewing cable 10HARARE36, FISHMONGERS UPDATED ON DIAMONDS IN ZIM
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Reference ID |
Created |
Released |
Classification |
Origin |
VZCZCXRO3888
RR RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHSB #0036/01 0211012
ZNY CCCCC ZZH
R 211012Z JAN 10 ZDK
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5322
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3268
RUEHDS/AMEMBASSY ADDIS ABABA 3379
RUEHRL/AMEMBASSY BERLIN 1802
RUEHBY/AMEMBASSY CANBERRA 2636
RUEHDK/AMEMBASSY DAKAR 3006
RUEHKM/AMEMBASSY KAMPALA 0067
RUEHNR/AMEMBASSY NAIROBI 0069
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/EUCOM POLAD VAIHINGEN GE
RHEFDIA/DIA WASHDC
RUEHGV/USMISSION GENEVA 2538
RHEHAAA/NSC WASHDC
C O N F I D E N T I A L SECTION 01 OF 03 HARARE 000036
SIPDIS
AF/S FOR BRIAN WALCH
NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN
MAPUTO FOR POL/ECON
E.O. 12958: DECL: 01/21/2020
TAGS: PREL PGOV PHUM EMIN ASEC ZI MZ
SUBJECT: FISHMONGERS UPDATED ON DIAMONDS IN ZIM
Classified By: Ambassador Charles Ray for Reason: 1.4 (d).
——-
SUMMARY
——-
¶1. (SBU) On January 14, Andrew Cranswick, CEO of African
Consolidated Resources (ACR), and Greg Sebborn, an ACR
special projects consultant, briefed the Fishmongers heads of
mission group on current activities regarding their claims
dispute with the Government of Zimbabwe (GOZ) over diamond
fields in Marange. They also told the Fishmongers that a
significant amount of diamonds were being smuggled to RENAMO
stronghold areas in Mozambique. A large sale of diamonds
from Marange was canceled earlier this month at the last
minute by the GOZ because of non-compliance with the
Kimberley process. We continue to receive reports of human
rights violations in the Marange area. END SUMMARY.
—————————————–
GOZ Ignores Court Rulings in Favor of ACR
—————————————–
¶2. (SBU) Cranswick and Sebborn met with the Fishmongers on
January 14 to discuss ACR claims and the current situation in
Marange. Last year, despite ACR claims to a large area in
Marange (Chiadzwa) and a High Court order validating the
claims, the state-owned Zimbabwe Mining Development
Corporation (ZMDC) entered into joint ventures with two
private companies to form Mbada Mining Ltd and Canadile
Miners Ltd for the purpose of exploiting the Marange diamond
fields.
¶3. (SBU) The High Court order by Justice Charles Hungwe
validating ACR’s claims with immediate effect was handed down
in September 2009. The State appealed that part of the
ruling which said the order should take immediate effect; the
appeal is proceeding. After Mbada and Canadile took
possession, ACR sought an emergency eviction order. This was
denied. Despite Hungwe’s ruling, Mbada and Canadile continue
to operate.
¶4. (SBU) In a somewhat contradictory move, the Ministry of
Mines, which has argued that ACR’s claims are invalid, sent
ACR a letter stating that the claims had been canceled. To
justify the cancellation, according to Cranswick and Sebborn,
Minister of Mines Obert Mpofu forged documents to indicate
that ACR’s claims are in an area alleged to have been
previously reserved by the GOZ for gold mining. Apart from
the forgery, there is no official record that the area was
reserved.
—————–
Who’s Benefiting?
—————–
¶5. (SBU) On January 7, 2010, Mbada attempted to hold an
auction offering 300,000 carats for sale. The auction was
later canceled by the Ministry of Mines; the government
claimed Mbada had failed to follow proper administrative
procedures. Had the auction been held, it would have been a
clear violation of the Kimberley Process Certification
Scheme’s (KPCS) joint work plan adopted and agreed upon with
Zimbabwe in November 2009, stipulating that all diamonds
intended for export must be inspected by a KPCS monitor.
(NOTE: A monitor has not yet been appointed; the GOZ rejected
the monitor suggested by the Kimberley Process. END NOTE.)
Qthe monitor suggested by the Kimberley Process. END NOTE.)
According to Cranswick and Sebborn, all of the diamonds
slated for sale were only a fraction of extracted diamonds at
the site and would have been only mid- and low-grade
diamonds. The auction was merely intended as a mechanism to
legitimize their operations.
¶6. (SBU) Based on actual Mbada production figures for a
HARARE 00000036 002 OF 003
42-day period in September and October obtained by ACR,
Cranswick and Sebborn estimated that the annual sales value
for Mbada industrial diamonds (about 50 percent of mined
diamonds) would be over US$286,000,000. For gem quality (the
other 50 percent ranging from near gem to excellent quality),
the annual sales value would be US$1,375,760,000. Production
could be increased 10-fold, according to Cranswick and
Sebborn.
¶7. (SBU) According to Cranswick and Sebborn, about 15
percent of the Mbada diamonds are stolen and presumably sold
in Mozambique. ACR has no production figures for Canadile;
they presume that most Canadile diamonds are sold illegally
in Mozambique or elsewhere. They noted that the Ndau ethnic
group, related to the Manyika, are predominant in the Marange
area as well as on the Mozambique side of the border which is
a RENAMO stronghold. They told the Fishmongers that large
stores of weapons remain in the area and speculated that
diamonds could be traded for arms.
¶8. (SBU) While it is generally assumed in Harare that large
profits from diamonds sales have gone to the military or
ZANU-PF insiders, neither Cranswick or Sebborn, nor anyone
else we have talked with, knows who is benefiting. A
ministerial committee (ZANU-PF ministers Mpofu and Emmerson
Mnangagwa, MDC-T ministers Tendai Biti and Elton Mangoma, and
MDC-M minister Welshman Ncube) has been appointed to look
into the situation, but until now has not taken action. We
asked Minister of State Gorden Moyo why MDC-T has not
investigated given that diamond profits could be used to
support the government but are likely being used to benefit
the military and ZANU-PF insiders. He responded that MDC-T
is concerned, but is waiting for the ministerial committee to
investigate. Sebborn told us on January 21 that MDC-T may be
waking up. He had a recent conversation with Biti, and
Tsvangirai and an MDC-T lawyer with whom Sebborn had met were
planning to meet with ZANU-PF Acting Minister of Mines
Emmerson Mnangagwa.
————————————–
Human Rights and Labor Abuses Continue
————————————–
¶9. (SBU) An NGO operating in Mutare, the Center for Research
and Development (CRD), continues to report human rights
abuses in and around the Chiadzwa mining field based on
sources working for Mbada, Canadile, and other informal
miners. These unconfirmed reports indicate that soldiers in
the area “regularly” raid a local business center where they
beat mine workers and locals and steal any cash, illicit
diamonds, or other valuables.
¶10. (SBU) CRD also reports that a new “operation” has begun,
Operation Gwejeline (slang for “female panner”), whereby
soldiers round up women at local shops, force-march them to
the mountains, rape them, and force them to sing songs. CRD
estimates this occurs at least twice per month. In addition,
soldiers have rounded up citizens and mining company
employees, stripped them of any cash and valuables and beat
Qemployees, stripped them of any cash and valuables and beat
them, sometimes leaving the victims naked. According to CRD,
“the soldiers do as they please and are pretty much above the
law.”
¶11. (SBU) CRD also described harsh labor conditions at the
Mbada and Canadile sites. According to CRD, there is no
running water and 150 employees share one Blair (pit) toilet.
Employees work 12 hours every day and are not allowed to
rest during weekends. Mbada employees are paid US$300 per
month and not allowed to claim overtime. CRD further
reported that on several occasions, mining employees caught
stealing have been turned over to soldiers who beat them in
the nearby mountains; the beaten employees never returned to
work and their fate is unknown. CRD told us it has a copy of
a letter from the Minister of Labor, Paurina Gwanyanya
HARARE 00000036 003 OF 003
(MDC-T) to Canadile, informing them that the Ministry was
launching an investigation into breaches of Zimbabwean labor
law.
——-
COMMENT
——-
¶12. (SBU) We have seen no indication that the Ministry of
Mines or ZMDC is interested in transparency or complying in
full with the Kimberley Process. It is clear that ZANU-PF
insiders and/or the military are seeking to circumvent the
Kimberley process for their own ends. What is unclear is why
MDC-T, on behalf of a cash-strapped government, has not been
proactive in trying to bring Marange under control. Perhaps
in part to prolong MDC-T acquiescence, the Ministry of Mines
is unwilling to entirely turn its back on the KPCS, instead
seeking shortcuts that might minimally satisfy their
commitments without sacrificing opportunities for illicit
enrichment. The GOZ’s attempt to appoint its own monitor is a
case in point. END COMMENT.
RAY
(69 VIEWS)
