Posted: ’12-JAN-07 10:00′ GMT – – Archive

Executives from River Ranch Limited, a diamond producer based in southern Zimbabwe, were Thursday due to appear before the European Union – the current chair of the Kimberly Process – to answer charges of smuggling gems and shield the country from the looming diamond export ban, as the company contemplated doubling its monthly ore output to 160,000 tons after settling an ownership dispute.

Munashe Shava, the Beitbridge-based mine’s manager, was quoted by Reuters saying during a tour by journalists this week that the mine’s current output was at 80,000 tons per month.

“Of course we have had problems, which are affecting the industry, such as unscheduled power cuts, the hyperinflationary environment and high borrowing costs, but we are currently exploring nine sites in order to increase production,” he was quoted as saying.

He however could not release the mine’s diamond production figures, which have remained a subject of speculation as the World Diamond Council investigates reports that gems from River Ranch and those from Marange in eastern Zimbabwe are being smuggled to South Africa and mixed with blood diamonds from the DRC before being certified for export – claims that have categorically been dismissed by both the mine and the government.

Only diamonds from Rio Tinto’s Murowa Diamonds can be accounted for in Zimbabwe figures, which in the first nine months of 2006 produced 148,000 carats.

River Ranch mine is currently at the centre of an ownership wrangle in which its directors led by retired army general Solomon Mujuru, husband of vice president Joyce Mujuru, are accused of seizing the mine from Bubye Minerals and renaming it.

They are also accused of having illegally exported diamonds in violation of a court order upholding Bubye Minerals’ ownership of the mine.

On Thursday, the mine’s executives were due to meet with EU ambassador to Zimbabwe Xavier Marshal after WDC chairman, Eli Izhakoff recommended, in a letter to the new chair of the Kimberley Process, Karel Kovanda that all diamond sales from Zimbabwe be suspended pending further investigations.

Zimbabwe is a small diamond producer, but a ban would be a major blow to the entire economy, in the country that is experiencing serious foreign currency shortages.

This week, a team of officials from the government, the country’s central bank and the Minerals Marketing Corporation of Zimbabwe (MMCZ) visited the Beitbridge mine to begin their own investigations into the smuggling claims, according to the weekly Financial Gazette.

River Ranch Limited has accused the WDC of being biased against the mine.

In a protest letter to the WDC, whose contents were published by the Financial Gazette, River Ranch’s managing director George Kantsouris said: “We are very perturbed that you have accepted the libellous accusations against our company without first investigating the allegations and contacting us and affording us an opportunity to present our side of the story. Our company has been producing diamonds at its mine near Beitbridge but, to date, has not yet sold any.

“When we do start selling, all sales will be conducted through the Minerals Marketing Corporation of Zimbabwe Act. Further, we do not have access to diamonds from the DRC. You are condemning us on the basis of false rumours without making any attempt to discover the true position. Your actions are very surprising and disturbing, considering your position as Chairman and Chief Executive Officer of WDC. Surely you should be impartial and act judicially, in a fair, transparent manner.”

In an interview with Reuters, Mines and Mining Development Minister Amos Midzi also dismissed allegations by the WDC as “madness”.

There is nothing of the sort alleged by the World Diamond Council. That madness should stop. We know they think they have found sufficient grounds to vilify us ahead of plans by the EU to renew sanctions.”

The EU is due to meet next month to review sanctions imposed on the ruling ZANU-PF’s top brass at the height of the commercial farm invasions in 2000.

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