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European banks refuse to finance Zimbabwean diamond transactions

 SW Radio Africa 18 October 2019

Two top European banking groups have said they will not finance international diamond transactions with Zimbabwe, citing reputation concerns over dealing with the country. (523 Words) - By Alex Bell

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It emerged during the Bank Finance session on the second day of the Mines to Market conference in Mumbai this week, that neither ABN Amro nor the Antwerp Diamond Bank (ADB) will deal with Zimbabwe or its diamonds.

Both Victor van der Kwast, CEO of ABN Amro's International Diamond & Jewellery Group (ID&JG) and Pierre de Bosscher, chairman of the executive committee of the ADB, made it clear that "reputational issues" stood in the way of their banks involvement with Zimbabwe.

De Bosscher stated that "ethical standards must improve," and that "we will not finance diamond transactions with Zimbabwe while it is still on the OFAC (European sanctions) list, under an EU trade embargo as well as a number of other such issues." He went on to say: "We are not willing to even finance roundabout transactions in South African rands or Hong Kong dollars, because this isn't good for the transparency of the industry."

International diamond dealers have been warned against dealing with diamonds mined in Zimbabwe, because the mining parastatal involved in plundering the natural resource is still on both European and US sanctions lists. The US based Rapaport Diamond Trading Network (RapNet) has cautioned its members against trading in stones mined from the Chiadzwa diamond fields, partly because of this involvement.

The parastatal Zimbabwe Mining Development Corporation (ZMDC) took over Chiadzwa in 2006, after the legal title holder, London based African Consolidated Resources (ACR), was forced off the claim at gunpoint. In 2009 the ZMDC joined forces with two South African owned entities to mine the alluvial fields, in a partnership that will see the ZMDC take 50% of the diamond profits. But the ZMDC is still listed on the targeted sanctions lists of both the US and EU and, legally, American and European diamond groups are restricted from dealing with the ZMDC.

Meanwhile Mines Minister Obert Mpofu this week signed an agreement at the Mines to Market conference, with the Surat Rough Diamond Sourcing India Limited (SRDSIL), a newly-formed company of the diamond merchants of Surat. As part of the agreement, the Indian Diamond Institute (IDI) will train 1,000 Zimbabwean youths how to cut and polish diamonds.

In return, the Surat group has requested that Zimbabwe supply it with US$100 million worth of Chiadzwa diamonds each month. In a letter presented to Mpofu on Thursday, SRDSIL chairman Ashit Mehta, whose private company Blue Star is linked to the international De Beers mining group, offered to provide training in cutting and polishing in exchange for the rough supply. Blue Star meanwhile was one of the buyers at a September auction of Chiadzwa stones, which was held in secret.

"We request Minister Mpofu and the government of Zimbabwe to facilitate the supply of rough diamonds, on a regular monthly basis, to the tune of $100 million, which will be on an annual basis of $1.2 billion of run of mine goods," Mehta said.

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