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Opinion Kennedy Mavhumashava
For some time, Belgium, home to the world’s largest diamond exchange at Antwerp, has been calling for the lifting of illegal European Union sanctions on companies operating at Chiadzwa.In February when the EU was discussing another yearly extension of its sanctions on Zimbabwe, Belgium tried to influence its colleagues to remove Zimbabwe Mining Development Corporation (ZMDC) from their list of embargoed local companies.
ZMDC is a strategic corporation through which the Government holds stakes in all five joint ventures extracting the gems in Marange. In the same month, the 27-member regional organisation agreed to extend the bulk of its punitive measures for another year, but lifted visa bans on 27 individuals, six of them ministers and a Harare-based company, which the EU alleges is owned by a senior Zanu-PF member and former deputy minister, Cde David Chapfika.
On ZMDC, Belgium and Britain reached a bilateral agreement under which they committed themselves to lobbying other EU members to lift the embargo a month after the 31 July elections if Sadc judged them as credible, free and fair.
Now that the elections are over, and Sadc, the African Union, Non-Aligned Movement and influential countries, among them China and Russia have declared them as free, credible and representative of the people’s will, Belgium is, correctly, telling the EU to fulfill its promise.
The EU did not observe the plebiscite as a group, but its individual embassies were able to do so. It has not yet announced a position on the elections but the Sadc cue the EU was waiting for must mean a positive stance.
“For us, there is an agreement,” Belgian Foreign Ministry spokesman Hendrik van de Velde recently said.
Belgium must be applauded for renewing its campaign against diamond sanctions. However, the call is inadequate, unsustainable and, to a degree, selfish because it is just concerned with one company whose continued shackling is impacting negatively on the Belgian economy.
For many Zimbabweans therefore, the anti-sanctions call, while encouraging, must not be celebrated that much as long as the entire economy remains under illegal sanctions.
Belgium has a $40 billion gem processing and retailing business which is facing declining rough diamond deliveries from its traditional suppliers in Botswana, Canada, and Russia. The three countries are now mining deeper-lying kimberlitic resources, which cost more than Zimbabwe’s Chiadzwa deposit which lies closer to the surface.
Furthermore, the mines in the three countries would in the next decade; be depleted of diamonds, at a time when Zimbabwe would, according to experts, begin to assert its authority on production of roughs.
Meanwhile, India, Dubai and China are consolidating their strength on the local market. It is business that Belgium is losing to emerging diamond processing countries. It does not want that to continue because by getting along with Britain on sanctions, thus allowing Asian competitors to dominate, Belgium is also putting itself under the same sanctions as it is not allowed to be involved with gems mined here.
In February, the India Times reported that Batswana, Canadian and Russian mines have had their open-cast potential exhausted and are now going for more expensive underground mining operations. Apart from it being costlier in terms of resources that have to be put in, underground mining typically yields reduced production.
The Indian paper reported that two of the largest diamond mines in the world – Canada’s Ekati and Diavik Mines — have exhausted open-pit resources and are now both underground mines. Three more mines — Russia’s Udachny and Botswana’s Jwaneng and Orapa — would become underground operations in the next two to four years.
Output at all the five formerly the world’s biggest mines, had by February declined by up to 28 percent.
“Gem processors in India’s Surat, the world’s biggest diamond cutting and polishing centre,” said the India Times, “are looking at Zimbabwe for the required supplies of rough diamonds during the year as diamond production of mining companies like De Beers has decreased phenomenally.
Converting a mine from an open pit operation to an underground operation typically results in curtailed production given the geology of Kimberlite pipes — the geologic formation of the resource is shaped like a carrot and gets narrower at depth.
Ekati’s production declined 28 percent year-over-year in 2012 and Diavik’s output is estimated to fall 17 percent year-over-year in 2013. Three more of the world’s largest mines are set to go underground over the next few years as Russia’s Udachny mine is expected to be converted to an underground operation in the next two to four years and Botswana’s Jwaneng and Orapa mines are expected to follow suit.”
Therefore, Belgium is being forced to look beyond its traditional suppliers of rough stones which Zimbabwe provides in abundance and more cheaply but under EU sanctions. It is in that context that the European country is putting up what, to some, might look like a campaign on Zimbabwe’s behalf.
Yet, before it became clear that the more established suppliers of rough diamonds would soon yield smaller quantities, Belgium was silent about the removal of sanctions. Only now, 11 years after sanctions were imposed and after mining at Chiadzwa started, Brussels suddenly thinks that lifting EU sanctions on ZMDC would be beneficial to Zimbabwe, increasing our tax revenues by $400 million a year.
Some might be justified to argue that this is a hypocritical position to take; especially as it pertains to only a sub sector of the mining industry — diamond mining — in which Belgium has a vested interest.
This position, however, tells us that European countries do not fight other people’s wars. Europe fights its own battles, which is why the push must be seen as a selfish gesture by a market that is anxious about its lack of a presence in the world’s biggest source of uncut diamonds.
ZMDC operates five joint-venture mines in the Marange diamond fields, that produced a combined eight million carats last year and generated $684,5 million in exports, roughly a third of aggregate mining receipts. Of the $684,5 million, Mbada Diamonds contributed $308,3 million followed by Anjin with $209, 9 million, Diamond Mining Corporation $100, 8 million and Marange Resources $236 million. The earnings can be obviously higher if there were no sanctions.
If Belgium means well for all of us, they must support the country in the push for an unconditional lifting of all EU sanctions. Sanctions are not affecting ZMDC only, but 13 million people and their entire economy.
Zanu-PF, in its manifesto for the July elections, put the impact of sanctions into perspective. The ruling party said the embargo has prejudiced the economy of $42 billion since 2000. Livelihoods of millions have collapsed because of the illegal sanctions and factories in Bulawayo, Mutare and Gweru are now ghost facilities where production ceased in the early 2000s.
“The cost of sanctions in terms of their negative contribution to political tensions, and polarisation of views in the country, economic decline, the deterioration of physical and social infrastructure, poverty and unemployment is incalculable. Against this backdrop, Zanu-PF rejects the proposition that the very same countries that have destroyed the livelihoods of the ordinary people can also be the champions of the country’s economic recovery,” said the ruling party in the manifesto.
The EU itself conducted its own study whose findings showed dire effects of its sanctions. It has not removed them regardless. That the Kimberley Process has declared that Zimbabwe’s are not conflict diamonds cannot change their hard-line position either.
One big point to note as well is that by seeking the removal of sanctions on ZMDC only, Belgium is saying that others that would remain untouched are justified. That is an insult.
We desperately want distortions on the lucrative diamond sector to go, so we need the restrictions to go but we are not being unthankful to Belgium when we demand a total, unconditional removal of all EU sanctions. Zimbabweans, whose economy cannot earn as much as it should from their diamonds and whose economy is under artificial and unjustified foreign pressures, want normal relations with all countries underpinned by free and fair trade and mutual respect.
Mr Van de Velde speaks of an agreement his country struck with Britain in February. The Belgians might have Britain fulfilling its pledge because of Brussels’ economic strength and it being a member of the EU, but some smaller countries have had more binding agreements with the British being repudiated.
The small countries have even been demonised and sanctioned for asking Britain to respect its commitments. At Lancaster in 1979, Britain agreed to fund land reform in Zimbabwe. Yes, it provided small amounts of money for that purpose in the first few years of independence but in 1997, that agreement was disowned.
However, for optimists, Belgium’s drive could be a good first step towards the total lifting of all EU sanctions in the near future. Open marketing of Zimbabwe diamonds in Europe can enhance revenue inflows in a more meaningful way, a situation that can help stimulate economic recovery and growth.
That would be fine, but millions of Zimbabweans signed an anti-sanctions petition in 2011 for all Western measures to go immediately and unconditionally.
Online Reporter