India’s Ministry of Commerce and Industry has finally instructed the local diamond industry not to trade in stones originating from Marange, in Zimbabwe.
It had to take a strong letter from the Kimberly Process (KP) chair Boaz Hirsch for the Asian country to ring the warning bell.
“No trade of Marange diamonds can currently take place under the joint work plan until an agreement can be found,” Hirsch said in a circular to members that caused India act.
“Participants are therefore reminded of the need for vigilance and ask participants to notify the working group on monitoring (WGM) chair in the event of receipt of an irregular shipment of Marange diamonds, until new arrangements are agreed that will allow continued implementation of the joint work plan, including supervised export mechanism.”
It would appear as if this circular was directed mainly to India following reports that the KP monitor for Zimbabwe Abbey Chikane had cleared a batch of Marange diamonds for export to India without the approval of WGM that sent tongues wagging within the scheme’s family.
The value of the certified goods that were allegedly sold to four Indian buyers were said to be valued at $160 million.
It seems there is a growing distrust of India by some KP member countries, as a five-member delegation of the scheme visited the Asian country in the end of November to take stock of the diamond industry in Surat, which is the world's largest diamond cutting and polishing centre.
The delegation, which included representatives from Switzerland, Israel, Africa, UK and Canada, also checked the various systems implemented by the Gem & Jewellery Export Promotion Council (GJEPC) for compliance with KP.
KP also stressed the importance of strict compliance with KP norms to keep conflict diamonds out of the diamond pipeline.
Though, Marange diamonds cannot be classified as “blood diamonds”, these gems had been condemned by KP as it accused sate security personnel of perpetrating gross human rights abuses on diggers that had invaded the diamond fields.
India, which has emerged as one of the strongest players in the diamond industry on the globe alongside China is said to have advocated for the lifting of the trade embargo on Marange stones during a KP meeting in Jerusalem.
Why was India so interested in the lifting of the ban? It is so simple to figure out.
India is so much in love with diamonds from Marange as was recently shown when the Surat Rough Diamond Sourcing India (SRDSIL) and representatives of Zimbabwe Diamond Consortium (ZDC) signed a $1.2 billion deal.
Under the deal the consortium of diamond moguls from Surat would provide a steady demand for polished stones to Zimbabwe, as well as provide training facilities to create 1,000 skilled diamond polishing artisans in Zimbabwe.
India is also convinced that diamonds being recovered in Marange are so strong; hence they could be of much use to their huge polishing industry.
“…if we don't bring them (Marange diamonds) here, they could well land up in China or elsewhere, and as a consequence, our polishing and cutting value gets eroded,'' said India’s Gem and Jewellery Export Promotion Council chairman Rajiv Jain.
However, the question is that with all the seemingly unbridled appetite Indian buyers have for Marange diamonds, will they endure the temptation to consume a couple of carats despite KP’s rumblings?
If Indian buyers chose to ignore the KP chair’s appeal after the Jerusalem plenary had resulted in another gridlock on the future of Marange diamonds, what can stop them from ignoring his recent circular?
On the other hand Zimbabwe remains adamant that it will sell its diamonds with or without KP’s blessings.
"Zimbabwe will sell diamonds without any conditions. There is no opposition to that," said Zimbabwe Mines minister Obert Mpofu.
"Our people have been waiting years. This will be a major achievement for the economy."
The fact that Harare continues to say nothing can stop it from selling its diamonds really shows that it has willing buyers.
Apart from India, Zimbabwe diamonds have a huge market in China, Hong Kong and UAE.
It is these countries that Marange diamonds will find their way to, if that is not the situation at the moment.
Be that as it may, India should not be tempted to consume Marange diamonds in defiance of KP, rather it should embrace its call not to do so until a solution is found on the way forward.
On the other hand KP should not continue dragging this Zimbabwe issue for if not dealt with carefully, a major chasm will develop permanently within the scheme, as it has been shown that member countries were diametrically opposed on the way forward.
KP should also be rest assured that if Zimbabwe puts its threat to go it alone into action (as it did last November) then some of its members will be consumers of Marange diamonds.
It remains to be seen if Indian diamond barons will genuinely embrace calls to stop importing Marange diamonds given the amount of money they will likely lose as the European countries take their time to decide on whether Marange diamonds should be certified for exports.
Mathew Nyaungwa, Rough&Polished, from Namibia
