Zimbabwe: EU Lifts Sanctions On Diamond Firm

By Staff Writer

The European Union on Wednesday lifted sanctions against Zimbabwe’s state owned diamond mining firm, Zimbabwe Mining Development Corporation (ZMDC) following increasing pressure from members, especially from Belgium, the global diamond trade centre.

The ZMDC holds a 50 percent stake in several mining operations in Marange on behalf of the Zimbabwe government, but the company had been blacklisted under European Union sanctions.

The EU block had pledged to remove sanctions against the veteran ruler’s inner circle and state owned companies if Zimbabwe held a credible election.

EU spokesperson Michael Mann said the process to delist ZMDC from the sanctions list had begun.

The decision must be endorsed by EU foreign ministers, which diplomats said was a mere formality.

The decision gives a boost to Mugabe, whose Zanu PF party calls EU sanctions illegal, and will allow the mining firm to sell its diamonds in Europe, potentially raising its revenues.

Belgium, centre of the global diamond trade, had pushed hard for the EU to lift sanctions on ZMDC, in line with an earlier agreement. Britain, Zimbabwe's former colonial power, had resisted the step so as not to be seen to be rewarding Mugabe.

Last year, Zimbabwe’s Deputy Mines Minister, Gift Chimanikire, confirmed an army-owned company holds a 40% stake on Anjin, one of the most lucrative diamond concessions in the country.

Days later it was reported that a Chinese diamond mogul have ploughed $100 million into the African country’s Central Intelligence Organisation (CIO) to fund covert operations against the opposition.

Early this year, the country’s Finance Minister Tendai Biti accused diamond firms of failure to pay tax revenues in full to the authorities, claiming only $40 million out of an expected $600 million reached government coffers in 2012.

Mugabe has repeatedly claimed the sanctions only affected ordinary people, while the EU says the embargo never meant to affect the country, only individuals responsible for human rights violations.

ZMDC operates five joint-venture mines in the rich Marange diamond fields, producing eight million carats last year and generating $685 million in exports.

The nation’s total diamond production from Marange increased from 8,7 million carats in 2011 to 12 million carats last year. This year, production is expected to rise further reaching over 17 million carats.