Zimbabwe is ready to take advantage of the recent lifting of Kimberley Process’s sanctions with a major auction of its diamond stockpiles. The auction that is to take place soon is estimated to fetch the country millions of dollars. Despite the fact that the actual value of the auction or the exact size of its stockpiles is not known, different estimates place it in the middle of approximately two million carats and 3.6 million carats. The diamond stockpile that is to go under the hammer is from the country’s highly controversial Marange Mines.
The auction will be made by a joint Chinese and Zimbabwean company. The controversial aspect of the auction is further raised by the fact that the company has major ties to the Zimbabwean military. The joint company is known as Anjin Investment. The company is trying to reduce the controversy surrounding the diamonds stockpile by inviting the chairman of the Kimberley Process Working Group.
The total value of the auction, as per the best estimates i.e. 3.6 million carats, is around USD 290 million. Marange diamonds have been known to sell for an average of USD 80 per carat. However, this value can rise higher because the diamonds now carry the approval of the Kimberley Process which makes them legal as against how they were perceived in the past.
Anjin is a company that was formed by the Chinese and Zimbabwean governments with both having equal stakes in it. However, the company’s ties to the Zimbabwean military put its credentials in doubt. There are certain allegations that state that high ranking officials in Anjin are actually high ranking officers from the Zimbabwean military. Moreover, the company’s operations itself have come under heavy criticism with the Prime Minister of Zimbabwe, Morgan Tsvanigirai stating that the company that has been mining for 18 months in collaboration with the Zimbabwean police and the army has not remitted any money into the national treasury. It is expected that Zimbabwe can earn around USD 3 billion every year from the three Marange Mines.
The original Kimberley Process ban was put in place because of complaints from various human rights groups that the military had been handling the Marange Mines with gross human rights violations. Human rights activists, however, are still suggesting that even though the government of Zimbabwe has become more sophisticated in how it exploits the Marange Mine and the people there, the proceeds from the whole operations would still be used by the government to maintain its power within the nation.
The joint ventures that the Zimbabwe government uses to process such diamond fields have also come under the scanner by various human rights groups. The government of Zimbabwe, apart from Anjin Investment, has other mining companies such as Marange Resources as well. This is wholly owned by it and Mbada which it owns in 50 – 50 partnership with South African investors.
The hue and cry caused by the recent removal of the Kimberley Process ban is bound to spill over to the auction held by Anjin Investment that is due to begin very soon.