World Diamond Council meetings typically don’t make a
lot of news. But the upcoming meeting in St. Petersburg just might …

Zimbabwe is once again, according to its sad embarrassment
of a mining minister, threatening to leave the Kimberley Process. (Though
apparently that’s not
final.)

Clearly, the government feels it has been unfairly treated.
From its point of view, it was given a “work plan” to comply with last October.
It let the agreed-upon KP Monitor, Abbey Chikane, in. And for the most part, it put the required systems in place in Marange, and Chikane gave his okay.

Yet the Marange diamond fields remain militarized, and Zimbabwe’s
behavior has alienated a lot of people. Many think that if activist Farai
Maguwu hadn’t been arrested – and apparently mistreated during his confinement –
the country would have received the go-ahead to export from Marange two weeks ago in
Jerusalem.

But we are where we are. Even though the meeting in Israel
at times got heated, the sides came close to an agreement to let Zimbabwe export stones from Marange several times. And
from what I hear, the negotiations will continue at the World Diamond
Council meeting in St. Petersburg, which begins July 14.

What happens if no deal is reached?

Well, after two failed attempts to win approval, it’s possible that Zimbabwe, which is still pretty much an economic basket case, will snub the KP and sell its millions of carats of
diamonds on the black market. I don’t know if that will spell the end of the
KP, but it won’t help. It will be a real headache for the industry to enforce,
as there is already a problem with Marange stones being smuggled through
neighboring Mozambique (which isn’t a KP member). And while Zimbabwe will get less money for its diamonds without the
KP, no one is sure quite how much. Venezuela suspended itself two years ago, and
does not seem in any rush to come back. 

In the middle of all this is Rio Tinto.  The company’s Murowa mine in Zimbabwe is, by all
accounts, a responsible one that adds real value to the community. Rio Tinto has always been a big KP supporter.

But if Zimbabwe leaves (or is removed from) the KP, Rio will likely halt mining at Murowa. Which could lead to the
government seizing the mine. Another way this furor could
lead to unexpected consequences.

Let’s hope calmer heads prevail. It’s no exaggeration to say the fate of the KP may be decided very soon in Russia.

Rob Bates

JCK News Director