Belgian authorities seized Zimbabwean diamonds awaiting an auction in Antwerp following a court order giving a South African mining company the right to be compensated for a lost concession.
About 500,000 ounces worth roughly $45 million and belonging to companies with Zimbabwean state shareholdings were seized on Sept. 12 following an attachment order obtained by Amari Holdings Ltd. to enforce a ruling in a Paris-based court of arbitration, Amari said in an e-mailed reply to questions.
The dispute will be adjudicated by a judge in Zambia tomorrow, Zimbabwean Mines Minister Walter Chidakwa said yesterday in Parliament. He questioned why Amari was able to attach the diamonds even though the dispute was with the state-owned Zimbabwe Mining Development Corp.
“Those companies therefore cannot be punished for the sins of ZMDC,” Chidakwa said. “I think at law you cannot say because ZMDC is the shareholder of a certain legal entity then you punish that entity. In Belgium you can go to a court and seek an order even without a response of those you are seeking an order against.”
The dispute stems from Amari’s departure from Zimbabwe in 2010, when the government canceled its right to operate its Serui platinum concession on the Great Dyke, a range of hills that runs down the center of the country, after the company had spent millions of dollars exploring it and identifying an economically viable resource of 18 million ounces of platinum group metals, the company said.
Amari’s project “did not succeed because of many reasons including non-performance,” Chidakwa said. The cancellation was unwarranted, according to Amari.
The Antwerp World Diamond Centre in March said it wants to sell 12 million carats of diamonds from Zimbabwe this year. Zimbabwe conducted two auctions in Antwerp, in December and in February, earning $10.5 million from sales of 279,723 carats and $70 million from 959,931 carats, according to the country’s Ministry of Mines.
Zimbabwe will hold its first domestic diamond auction in November, according to Chidakwa.
The European Union lifted sanctions against diamonds from the Marange field in Zimbabwe’s east a year ago, making the international sale of gems an increasingly important source of revenue for the cash-strapped government. Zimbabwe mined about 16.9 million carats last year, according to the Ministry of Mines.
Impala Platinum Holdings Ltd. (IMP), Aquarius Platinum Ltd. (AQP) and Anglo American Platinum Ltd. (AMS) are the only producers of the metal in Zimbabwe, which has the world’s second-largest deposits after South Africa.
President Robert Mugabe, 90, last year consolidated his grip on power with a July election win, ridding his Zimbabwe African National Union-Patriotic Front of its coalition with the main opposition Movement for Democratic Change.
The government is compelling foreign-owned miners and banks to cede control under its so-called indigenization policy.
Zimbabwe had $9.9 billion in debt, which “remains as an albatross around our neck as a country, it inhibits the access to fresh capital, fresh money which we badly require,” Finance Minister Patrick Chinamasa on Sept. 10.
By Franz Wild and Godfrey Marawanyika Bloomberg