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Mail & Guardian: Big Money Arrives in Zim [for Diamonds]

Zimbabwe's controversial rough diamonds began
their long journey from the dirt of the Marange fields to the gleaming
world of jewellery stores in a remarkable show of bling this week.





Dozens of sparkling private jets lined the tarmac at Harare's
international airport, luxury vehicles queued for parking space and red
carpets were rolled out as big international money arrived in Harare for
the first sell-off of Zimbabwe's multibillion-dollar diamond stock on
Wednesday.

Arriving from Surat and Beirut, Abu Dhabi, New York, Brussels and
Moscow, scores of wealthy buyers competed for the choicest stones,
paying little attention to the controversy that has dogged them over the
past year. It gave a striking picture of the vast global interests
jostling for a hand in Zimbabwe's diamond industry.

Long isolated from the world, Zimbabwe revelled in the attention.

A brass brand played and designer suits and flowing robes paraded along
red carpets as a who's who of political and business glitterati joined
buyers from around the world in a large hangar converted to house guests
for a ceremony marking the country's first big gem auction.

Hours later, about 900 000 carats of diamonds had been sold and were heading for world markets.

It was not immediately known how much Zimbabwe raised from the sale.

Prime Minister Morgan Tsvangirai, the leader of the Movement for
Democratic Change, emerged beaming to repeat the old De Beers line:
"Diamonds are forever".

This was a "historic occasion for Zimbabwe", marking the first auction
of what he called "the country's most valuable mineral", he said.

"We have put in place measures to ensure that we abide by the Kimberley Process principles and sell our diamonds in a
transparent manner."

Next week, President Robert Mugabe, who is visiting China this week, will visit the Marange diamond fields in Chiadzwa.

Ahead of the sale, South Africa's Abbey Chikane led a Kimberley Process investigation team to the diamond fields.

The army would remain in place, officials said, until companies in the area could secure the fields on their own.

A buyer from India told the Mail & Guardian that the gems were of high quality, and that he had bought his lot for up to $80 a carat.

He said that Surat, seen as a global diamond polishing hub, had been
suffering from a shortage of rough diamonds, and the Zimbabwe sale had
come as a great relief to the Indian city.

According to official data, last year Zimbabwe exported 1.34million
carats valued at $28.9million at an average price of $21.42 per carat.

The gems came from a Rio Tinto mine in the Midlands and another operation at Beitbridge.

Some experts believe some of the stones could have fetched more than
$100 a carat, but much of the stock is believed to be of industrial
quality, dragging average prices down.

"The auction has raised great interest the world over. We have buyers
from Europe, America and Asia," said Obert Mpofu, the minister of mines.

With little coming from aid donors, diamonds are now being cast as Zimbabwe's saviour.

According to Mpofu, Zimbabwe could earn as much as $1,7­billion from its
total diamond stock of 4,5-million carats, a figure that would match
the country's annual budget.

Trade unions insist the proceeds of the sales should go into the
­salaries of government workers, who are earning about $160 a month.

But Tsvangirai sought to play down expectations that diamond rush would mean an end to years of economic crisis.

"I have heard and read of billions of dollars coming from today's sales.
Please let's be realistic. Let's not create high expectations for our
people," he said.

The sale comes after months of bitter haggling over Zimbabwe's diamonds.

Human rights groups campaigned for a ban on sales, claiming that up to
200 people had been killed in a military operation to rid the diamond
fields of illegal miners.


From: http://www.mg.co.za/article/2010-08-13-big-money-arrives-in-zim

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