Indian government blocks Zimbabawe roughs

| Friday December 10, 2010 00:00

The move is a major setback to the Surat Rough Diamond Sourcing India Limited (SRSDIL), which had inked a deal amounting to $1.2 billion per annum, to import roughs from Zimbabwe.

With India emerging as a big consumer market for diamond-studded jewellery, in addition to being a major exporter, the last two auctions of Kimberley Process (KP) certified goods reflected a healthy participation by Indian diamantaires, especially those from Surat.

In a defiant stand, Zimbabwe has reportedly told newswire agencies on Tuesday, that it will proceed to sell its diamonds since they are  compliant with all the requirements of the Kimberley Process Certification Scheme. Mines and Mining Development secretary Thankful Musukutwa reportedly told a visiting Norwegian delegation that trade of his country's roughs would not be stopped by non-government organisations and 'other hostile nations.'' The minister has said that while Zimbabwe has had 'a few problems' with the KPCS, 'we have worked our way up and we are very compliant''.

The minister has reportedly asked KPCS to stop engaging in politics.In Surat though, the Indian Ministry's move has sent out warning bells. 'We will have to follow the decision, though the ban will ensure a huge shortage of roughs and will unwittingly lead to large scale smuggling of diamonds,'' said Manikbhai Suratwala, a gem exporter, who leases an office in Mumbai's Zaveri Bazaar area. Suratwala pointed out that Zimbabwe's earnings from mineral exports had increased by 25% to $807.2 million during the nine months to September. 'If there was no ban on the roughs, earning from mineral exports could top $1 billion this year,'' he added. However, the Gems and Jewellery Export Promotion Council (GJEPC) has welcomed the move.

'We will adhere to the timeline until a mutual settlement is reached between the  member countries. We do not want to antagonise other importing countries and interested parties,'' said a Council member. Sanjay Kothari, vice-chairman of the Council said that a decision in this regard was taken by the Council since the USA, UK and Australia continue to have reservations over the export of diamonds from Zimbabwe. Recently, at a Kimberley Process meeting held in Jerusalem from November 1 to November 4, representatives of the government and the Council strongly advocated the lifting of suspension on the export of rough diamonds from the Marange diamond fields. However, despite several delays, no concrete decision has been taken.

Traders have also said that banning diamonds would not help resolve the issue, since diamonds from Zimbabwe would enter the trade channel via other nefarious means. Exporters from Mumbai who are to participate in the gems and jewellery show, Sparkle-2011, scheduled to be held in Surat on December 12, have maintained that most banned diamonds would find their way to China and India  'via alternate ways.'' 'More than 50% of Zimbabwe's diamonds are said to be smuggled out of the country,'' said Suratwala.

He also alluded to earlier reports that said  Zimbabwe's Ambassador to Australia, Jacqueline Zwambila, had been recalled to Harare following allegations of stripping and diamond smuggling. Incidentally, on November 26, a court in Surat, Gujarat, had convicted two Lebanese nationals of smuggling diamonds into the country. The judgement, said experts, revealed how diamonds were used to finance conflicts and human rights abuse in Africa, and were making their way into India. This was the first conviction relating to the smuggling of such gems into the country.

'Hopefully, it should be the last,'' said Suratwala. 'We would all like an early resolution to this mess, especially since Zimbabwe auctioned a huge cache of diamonds from the Chiadzwa diamond field in August, which went off smoothly. The required certification was obtained.'' (Mineweb)