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C O N F I D E N T I A L SECTION 01 OF 03 HARARE 000036 
 
SIPDIS 
 
AF/S FOR BRIAN WALCH 
NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN 
MAPUTO FOR POL/ECON 
 
E.O. 12958: DECL: 01/21/2020 
TAGS: PREL PGOV PHUM EMIN ASEC ZI MZ
SUBJECT: FISHMONGERS UPDATED ON DIAMONDS IN ZIM 
 
Classified By: Ambassador Charles Ray for Reason: 1.4 (d). 
 
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SUMMARY 
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¶1.  (SBU) On January 14, Andrew Cranswick, CEO of African 
Consolidated Resources (ACR), and Greg Sebborn, an ACR 
special projects consultant, briefed the Fishmongers heads of 
mission group on current activities regarding their claims 
dispute with the Government of Zimbabwe (GOZ) over diamond 
fields in Marange.  They also told the Fishmongers that a 
significant amount of diamonds were being smuggled to RENAMO 
stronghold areas in Mozambique.  A large sale of diamonds 
from Marange was canceled earlier this month at the last 
minute by the GOZ because of non-compliance with the 
Kimberley process.  We continue to receive reports of human 
rights violations in the Marange area.  END SUMMARY. 
 
----------------------------------------- 
GOZ Ignores Court Rulings in Favor of ACR 
----------------------------------------- 
 
¶2.  (SBU) Cranswick and Sebborn met with the Fishmongers on 
January 14 to discuss ACR claims and the current situation in 
Marange.  Last year, despite ACR claims to a large area in 
Marange (Chiadzwa) and a High Court order validating the 
claims, the state-owned Zimbabwe Mining Development 
Corporation (ZMDC) entered into joint ventures with two 
private companies to form Mbada Mining Ltd and Canadile 
Miners Ltd for the purpose of exploiting the Marange diamond 
fields. 
 
¶3.  (SBU) The High Court order by Justice Charles Hungwe 
validating ACR's claims with immediate effect was handed down 
in September 2009.  The State appealed that part of the 
ruling which said the order should take immediate effect; the 
appeal is proceeding.   After Mbada and Canadile took 
possession, ACR sought an emergency eviction order.  This was 
denied.  Despite Hungwe's ruling, Mbada and Canadile continue 
to operate. 
 
¶4.  (SBU) In a somewhat contradictory move, the Ministry of 
Mines, which has argued that ACR's claims are invalid, sent 
ACR a letter stating that the claims had been canceled.  To 
justify the cancellation, according to Cranswick and Sebborn, 
Minister of Mines Obert Mpofu forged documents to indicate 
that ACR's claims are in an area alleged to have been 
previously reserved by the GOZ for gold mining.  Apart from 
the forgery, there is no official record that the area was 
reserved. 
 
----------------- 
Who's Benefiting? 
----------------- 
 
¶5.  (SBU) On January 7, 2010, Mbada attempted to hold an 
auction offering 300,000 carats for sale.  The auction was 
later canceled by the Ministry of Mines; the government 
claimed Mbada had failed to follow proper administrative 
procedures.  Had the auction been held, it would have been a 
clear violation of the Kimberley Process Certification 
Scheme's (KPCS) joint work plan adopted and agreed upon with 
Zimbabwe in November 2009, stipulating that all diamonds 
intended for export must be inspected by a KPCS monitor. 
(NOTE: A monitor has not yet been appointed; the GOZ rejected 
the monitor suggested by the Kimberley Process.  END NOTE.) 
Qthe monitor suggested by the Kimberley Process.  END NOTE.) 
According to Cranswick and Sebborn, all of the diamonds 
slated for sale were only a fraction of extracted diamonds at 
the site and would have been only mid- and low-grade 
diamonds.  The auction was merely intended as a mechanism to 
legitimize their operations. 
 
¶6.  (SBU) Based on actual Mbada production figures for a 
 
HARARE 00000036  002 OF 003 
 
 
42-day period in September and October obtained by ACR, 
Cranswick and Sebborn estimated that the annual sales value 
for Mbada industrial diamonds (about 50 percent of mined 
diamonds) would be over US$286,000,000.  For gem quality (the 
other 50 percent ranging from near gem to excellent quality), 
the annual sales value would be US$1,375,760,000.  Production 
could be increased 10-fold, according to Cranswick and 
Sebborn. 
 
¶7.  (SBU) According to Cranswick and Sebborn, about 15 
percent of the Mbada diamonds are stolen and presumably sold 
in Mozambique.  ACR has no production figures for Canadile; 
they presume that most Canadile diamonds are sold illegally 
in Mozambique or elsewhere.  They noted that the Ndau ethnic 
group, related to the Manyika, are predominant in the Marange 
area as well as on the Mozambique side of the border which is 
a RENAMO stronghold.  They told the Fishmongers that large 
stores of weapons remain in the area and speculated that 
diamonds could be traded for arms. 
 
¶8.  (SBU) While it is generally assumed in Harare that large 
profits from diamonds sales have gone to the military or 
ZANU-PF insiders, neither Cranswick or Sebborn, nor anyone 
else we have talked with, knows who is benefiting.  A 
ministerial committee (ZANU-PF ministers Mpofu and Emmerson 
Mnangagwa, MDC-T ministers Tendai Biti and Elton Mangoma, and 
MDC-M minister Welshman Ncube) has been appointed to look 
into the situation, but until now has not taken action.  We 
asked Minister of State Gorden Moyo why MDC-T has not 
investigated given that diamond profits could be used to 
support the government but are likely being used to benefit 
the military and ZANU-PF insiders.  He responded that MDC-T 
is concerned, but is waiting for the ministerial committee to 
investigate.  Sebborn told us on January 21 that MDC-T may be 
waking up.  He had a recent conversation with Biti, and 
Tsvangirai and an MDC-T lawyer with whom Sebborn had met were 
planning to meet with ZANU-PF Acting Minister of Mines 
Emmerson Mnangagwa. 
 
-------------------------------------- 
Human Rights and Labor Abuses Continue 
-------------------------------------- 
 
¶9.  (SBU) An NGO operating in Mutare, the Center for Research 
and Development (CRD), continues to report human rights 
abuses in and around the Chiadzwa mining field based on 
sources working for Mbada, Canadile, and other informal 
miners.  These unconfirmed reports indicate that soldiers in 
the area "regularly" raid a local business center where they 
beat mine workers and locals and steal any cash, illicit 
diamonds, or other valuables. 
 
¶10.  (SBU) CRD also reports that a new "operation" has begun, 
Operation Gwejeline (slang for "female panner"), whereby 
soldiers round up women at local shops, force-march them to 
the mountains, rape them, and force them to sing songs. CRD 
estimates this occurs at least twice per month.  In addition, 
soldiers have rounded up citizens and mining company 
employees, stripped them of any cash and valuables and beat 
Qemployees, stripped them of any cash and valuables and beat 
them, sometimes leaving the victims naked.  According to CRD, 
"the soldiers do as they please and are pretty much above the 
law." 
 
¶11.  (SBU) CRD also described harsh labor conditions at the 
Mbada and Canadile sites.  According to CRD, there is no 
running water and 150 employees share one Blair (pit) toilet. 
 Employees work 12 hours every day and are not allowed to 
rest during weekends.  Mbada employees are paid US$300 per 
month and not allowed to claim overtime.  CRD further 
reported that on several occasions, mining employees caught 
stealing have been turned over to soldiers who beat them in 
the nearby mountains; the beaten employees never returned to 
work and their fate is unknown.  CRD told us it has a copy of 
a letter from the Minister of Labor, Paurina Gwanyanya 
 
HARARE 00000036  003 OF 003 
 
 
(MDC-T) to Canadile, informing them that the Ministry was 
launching an investigation into breaches of Zimbabwean labor 
law. 
 
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COMMENT 
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¶12.  (SBU) We have seen no indication that the Ministry of 
Mines or ZMDC is interested in transparency or complying in 
full with the Kimberley Process.  It is clear that ZANU-PF 
insiders and/or the military are seeking to circumvent the 
Kimberley process for their own ends.  What is unclear is why 
MDC-T, on behalf of a cash-strapped government, has not been 
proactive in trying to bring Marange under control. Perhaps 
in part to prolong MDC-T acquiescence, the Ministry of Mines 
is unwilling to entirely turn its back on the KPCS, instead 
seeking shortcuts that might minimally satisfy their 
commitments without sacrificing opportunities for illicit 
enrichment. The GOZ's attempt to appoint its own monitor is a 
case in point.  END COMMENT. 
 
RAY