Zimbabwe minister admits smuggling is rife barely a week after diamond export ban is lifted

Mining Review reports the decision last week to allow Zimbabwe to resume diamond exports from the controversial Chiadzwa and Marange alluvial fields is being questioned, after the country's mines minister admitted on Thursday that smuggling was still rife. The comments are in stark contrast to his previous insistence that the country's diamond industry was meeting international trade standards.

Zimbabwe is set to earn over $2 billion per year from exports with current diamond output estimated to be in excess of 25% of world production. Rough diamond prices have dropped by more than 10% over the last two months and is set to fall further as the first Marange diamonds come onto the market by the end of this month.

Mining Review reports minister Mpofu was shocked to hear Zambia and Mozambique allegedly sought to join the Kimberley Process despite not having any diamond operations of their own: “We have information that a lot of our diamonds went through these countries. There are massive leakages at the border posts, but policing of the border is not the responsibility of the Mines Ministry."

The Times of India reports India, Israel and Belgium would be processing more than $17 billion worth of rough diamonds this year, a 27% increase over the $13 billion in 2010.

MINING.com reported at the end of October on allegations that diamonds are funding a 'parallel government' in Zimbabwe. A presentation made to the Zimbabwean parliament details the secrecy, corruption and human rights abuses that accompany mining activities in the Marange alluvial diamond fields.

Hundreds were killed and thousands of local miners were driven off claims when the army seized control of the area in 2008 and most observers believe an international ban on these gems are being widely flouted. The report alleges that in contrast to the official $200 million, as much as $2.8 billion – equal to all other tax revenues – found its way into a parallel government via the army, police, prisons and intelligence agencies which all have 'permits' to mine there.