Fabulously wealthy members of Robert Mugabe’s inner circle have masterminded the “mind-blowing” theft of £1.25 billion of diamonds from Zimbabwe’s eastern Marange diamond fields, according to a lobby group.
Partnership Africa Canada (PAC), a member of global diamond watchdog the Kimberley Process, said in a report sure to enrage the Zimbabwean president that the theft represented “the biggest plunder of diamonds since Cecil Rhodes”.
Released to coincide with the start of Zimbabwe’s first diamond conference, which the authorities claimed would dispel western-fuelled “misconceptions” about the local gem industry, the report said: “Marange’s potential has been overshadowed by violence, smuggling, corruption and, most of all, lost opportunity.”
It said “the scale of the illegality is mind-blowing” and had spread to “compromise most of the diamond markets of the world”. It added that £1.25bn was a “conservative estimate”.
Pointing to an opaque web involving international gem dealers, criminals and high-level government officials, the report said the country’s army was at the heart of the illegal trade, through its procurement agency, Zimbabwe Defence Industries (ZDI), which is linked to the Chinese mining firm Anjin.
Former ZDI chief executive Tshinga Dube now heads Marange Resources, another of the handful of companies licensed by Mr Mugabe’s mines minister, Obert Mpofu, to operate in Marange. This means top officials in Zimbabwe’s military are now the biggest beneficiaries of the Marange diamonds – and not the Zimbabwean state.
The form of smuggling has shifted from the trading by local barons that prevailed in 2008 to what is now mostly a “sophisticated price manipulation scheme” that sees diamonds sold on in centres such as Dubai and Surat in India at twice the price for which they were initially sold.
The report gave the example of ten million carats of Marange diamonds exported recently to Dubai for $600 million (£380m) and then sold for double that price when they left for Surat. The report said the money lost during trading made a mockery of the Kimberley Process Certification Scheme, to which Zimbabwe was controversially readmitted last year. Researchers were also unable to locate a 2.5 million carat stockpile that went missing last November.
The death of white Harare businessman Alan Banks in July was also linked to the illicit gem trade, the report said. His bloodied body was discovered in the back of his car, with a bag over his head. He had allegedly been given access to the gems by soldiers and was smuggling them to South Africa and Namibia.
“There continues to be an entirely unrecorded parallel trade of diamonds that is not only known to, but condoned by … government officials,” the report said. It highlighted the unexplained wealth of mines minister Mr Mpofu, who bought a Zimbabwean bank this year. Researchers found he was one of the top five landowners in Zimbabwe. PAC said he had made cash purchases of $20m in the past three years – while a diamond trading company, Three Waters Investments, was operating out of his office in Bulawayo.