Are Zimbabweans deluding themselves over missing $15 billion diamond revenue?


Meanwhile, in August 2006, a diamond rush into Marange took place, attracting an estimated 10 000 illegal artisanal miners into the vast fields.

 The illegal mining persisted until November 2008, when the government deployed security forces to drive panners out of the fields, in a crackdown dubbed ‘Operation Hakudzokwi’ (don’t come back).

Government faced international criticism for alleged human rights abuses committed by the security forces during the crackdown.

Global pressure was brought to bear and Zimbabwe was not allowed to trade in diamonds from Marange until the industry watchdog Kimberley Process Certification Scheme (KPCS) had verified that the country was compliant with its standards meant to eliminate trade in conflict gems.

A KPCS monitors certified Zimbabwe compliant in June 2010, paving the way for international auctions.

The global rough diamond market has average $12.63 billion in size, between 2009 and 2015. Production has averaged 126 million carats annually over that period.

The Kimberley Process, an intergovernmental diamond certification scheme, was launched in 2003 to prevent diamonds from fuelling civil wars and conflict. The Kimberley Process only covers the trade in rough diamonds (diamonds before they are cut or polished). The vast majority of diamond trading and producing countries – the European Community and 46 countries in total – are members of the Kimberley Process and are required to implement an import/export control regime to keep out conflict diamonds: diamonds used to finance conflict and civil wars.

Critics of the Kimberley Process have, over the years, pointed to some loopholes in this system, which have led to violations. However, these violations are estimated to be in the order of millions, not billions, and, while they are a matter to be dealt with, they could hardly put a dent in the global rough diamond industry, which reached $14 billion in 2016, according to the latest available Kimberley Process data.

Mugabe’s 2016 reference was to the period between 2009, when government took effective control of Marange, to 2015, the full year preceding his statements.

During that period, Zimbabwe’s cumulative gross rough diamond sales amounted to $2 432 041 507.87, according to the Kimberley Process Certification Scheme’s rough diamond production and sales statistics. Production, over that period, was nearly 50 million carats.

Apart from the Kimberley Process Certification Scheme, other industry players such as Russia’s Alrosa, the world’s largest rough diamond producer accounting for a third of global production, routinely release data showing output and market trends.

Between 2009 and 2015, Zimbabwe’s diamonds fetched an average of $46.09 per carat. Diamond industry officials and experts attribute the low prices, relative to the global average, to the low grade as well as trade restrictions that come with Zimbabwe’s troubled ties to Western states, which have maintained economic sanctions on its government since 2000.

The United States maintains an embargo on diamonds from Marange, while the European Union only lifted its ban in 2013, four years into formal diamond mining in the region.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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