Saturday, November 7, 2009

Investment,Scams & Diamond Ponzi Schemes

Why Lend to a Borrower ?
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Where is the
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Profit & Loss Statement ?
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Investment scams: Utah has a long history of rip-offs — shun offers that sound too good to be true
By Jessica Garrison, found at
LATimes March 29, 2006
By
Dave Anderton found at Deseret Morning News

Investment pitches that promise big returns, low risk and financial independence may end up stealing savings, stripping home equity and leaving investors in financial ruin.

Wayne Klein, director of the Utah Division of Securities, says if the offer sounds too good to be true, run away.

One does not have to look far to find such offers. A local radio advertisement recently promised a 25 percent return on money backed by Utah real estate. In 2006, a flier handed out in one Wasatch Front neighborhood guaranteed a 21 percent profit by handing over $10,000 and signing a promissory note.

"So long as there are greedy investors and people willing to tell lies to earn a living, we are going to have investment fraud," Klein said. "I don't see either of those conditions disappearing."

Brad Nielsen of Bluffdale knows firsthand what it is like to be defrauded by a friend.

In 2004, Nielsen was persuaded by Kevin Lawrence Wright to purchase a Bluffdale home for $590,000. Wright assured Nielsen that the home would appraise for $810,000. The equity in the home would be used, Wright told Nielsen, to help make mortgage payments and to invest in an offshore venture that promised high returns.

"I was going to take $75,000 and put it aside in case there was ever a problem and I needed to have a year's period of payments," Nielsen said. "I was supposed to be getting the interest from that offshore account to make the house payments."

But Nielsen never saw any of the home's equity.

Instead, Wright and his business partner, Michael Stephen Hurst, filed a lien on the home and cashed out nearly all of the home's equity for themselves.

"At closing I was supposed to get a check for the full equity," Nielsen said. "Come to find out, they had invested the money into uncut diamonds. We don't know who ended up with the money."

Nielsen contacted the Utah Division of Securities.

An investigation by the state revealed that Wright had used part of the money to pay off a personal debt. Hurst used the funds for a diamond investment.

In July, the two men pleaded guilty to one third-degree felony count of securities fraud. Wright was ordered to serve 20 days in jail. Both men were placed on probation for two years and ordered to work 500 hours of community service.

"Utah's housing market is booming, and unfortunately con artists are eager to take advantage of people during this boom," Attorney General Mark Shurtleff said at the time the men were sentenced. "We are grateful that the prosecutors and investigators in this case did everything possible to make sure this crime did not pay."

Nielsen was able to recoup $143,410 in lost equity from Wright and Hurst, but it came more than two years after purchasing the home.

"It was a miserable time," Nielsen said. "I learned a lot of things in the whole process. A lot of times people think, 'My friend isn't going to take advantage of me.' In the loan documents, you want to make sure that all of the paperwork is there. You need to take the time and go down through each thing in the paperwork and make sure you understand it."

Nielsen's story is not new. Utah has a long history of investment rip-offs. In 2007, the state's residents can expect to see more schemes, with real estate scams topping the list, according to the division's top 10 investment scam predictions.

Real estate scams include:

• Promoters who use credit scores of investors to buy and sell homes.
• So-called "hard money" lending that is used to finance high-interest home loans.
• Investment scams in which promoters solicit an investor's home equity to make an investment.

Klein said hard money lenders promise investors 2 percent to 4 percent interest per month, with the guarantee that the money is secured by property.

"They say it is secured by the property and yet if you go look at the county recorder's office your name shows up nowhere on the trust," Klein said. "It is a very big scam."

The second most popular scam Utahns appear to be falling for is note brokering, in which companies advertise on the Internet and on television infomercials about how to purchase real estate notes at a discount, list them on a Web site sponsored by the company and resell them at a profit.

The businesses that advertise note brokering charge steep fees for the courses, Klein said, but fail to tell people that they need to be licensed by the state.

"I would not do that, nor would I recommend anybody to be involved in those kinds of situations," said James Wheeler, senior vice president and assistant branch manager at D.A. Davidson & Co., a Montana-based brokerage firm with offices in Utah. "It appears that (companies) are making their money off the course."

Klein said: "If the investment is passive and you're relying on someone else's expertise, then it is a security and they need to be licensed. Anybody offering an investment has to be licensed." Aside from the more mainstream scams, there is a flurry of computerized models and investment tools that promise money to investors by buying and selling options, Wheeler said.

"I've never met anybody who has consistently made money speculating by doing options and those types of investments," Wheeler said. "I had one client who was doing some day trading, and he had a system he was sure was going to make him all of the money he needed. He came back a year later and I asked him if he was still doing that. And he said, 'No, it didn't work out.' We use the adage that if it sounds too good to be true, it is."

The third most prevalent scam in Utah targets senior citizens through "free meal seminars." Seniors are sent invitations by mail inviting them to a free seminar and meal, where they will be told how to protect their retirement future.

After the seminar, promoters push one-on-one meetings that are designed to sell annuities. "Annuities aren't themselves scams, but they are being sold to a lot of people in situations where it is not suitable or not the best investment for people," Klein said. "And they carry very high fees and in many cases a long tail, anywhere from seven to 15 years, where you have to hold it and if you take any money out you suffer humongous withdrawal penalties.

"When you sell something to somebody who is 80 years old and it has a 10-year holding period, if something happens, they can't take their money out."

The bottom line, Klein said, is that investors must understand that promises of higher returns mean higher risk. Klein said investors should ask themselves, if there is so much profit to be made with no risk, why are they borrowing money from me and not a bank?

Investors should always find out if the person offering an investment is licensed by calling the Division of Securities at 801-530-6606. Stock offerings must be registered with the division, and promoters must offer a written prospectus summarizing the investment.

Other prevalent scams include hot tip stock recommendations by e-mail, foreign currency trading, oil and gas investments and prime bank schemes.

"People want to believe that there is a way to make a lot of money and have no risk," Klein said. "If there is no risk, then there is no reason that borrowers have to pay a high interest rate to get money."


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"If you don't know jewellery, know the jeweller." - Warren E. Buffett

Additional Reading :

Herald Sun, Tuesday, October 20, 2009
By JOHN BEVERIDGE

Turning to diamonds in the rough times

Posted: 07/22/09 09:12
Press Release:

THERE are many ways to invest in gold but for most people diamonds are a once in a lifetime event.

That could be about to change with Australian diamond direct internet retailer Diamond Exchange setting up a separate company that will raise up to $US5 million in diamond- backed notes.

At this stage Diamond Secured Notes will only raise money minimum $US80,000 from sophisticated investors through an information memorandum rather than a prospectus.

The aim is to take advantage of a current pricing dip for polished stones caused by the withdrawal of debt funding for diamond wholesalers by many US banks.

Diamond Exchange chief executive John Buckby said the idea was to use purchased diamonds and cash as security for the $US-denominated notes, which will pay a coupon of 12 per cent a year over a term of three years.

Diamonds will make up a minimum of 80 per cent of the security for the notes and further note issues are likely in another year or two.

With an independent board and fully insured diamond storage facilities, John said the stones would all be high quality diamonds of between 0.5 to 2.2 carats that can be readily sold into the engagement ring market through Diamond Exchange.

"We have adopted a conservative approach to start with but as we grow our sales we can issue more notes," said John. "It is a strategy to help expand our business and provide investors with a good return backed with strong security."

John said Diamond Exchange's direct volume deals with diamond cutters in Europe and Asia meant that it could offer attractive prices by removing the variety of costly wholesalers and middlemen in the supply chain.

"That gives us a quality and price advantage over other retailers and also offers greater security for the notes," said John.

Diamond expert Johan Barry said that over the long term diamond prices tended to follow first world inflation with momentary price hiccups due to liquidity shortages an ideal buying opportunity.

"The supply of quality diamonds from mines is not getting any cheaper or easier," said Johan.

While remaining guarded, John said Diamond Exchange was looking closely at setting up offices in Perth and Singapore and a future share market listing was a possibility. [ End of press release ]

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"If you don't know jewellery, know the jeweller." - Warren E. Buffett

Opinion & Warning :

Diamonds are risky !

If you do not have surplus cash your money is safer in the bank.

Diamond investments are probably not suitable for most investors because of the amount of capital required.

Diamonds are a problematic investment. While it is easy to buy a diamond, it is not easy to sell one unless one is already an established diamond merchant.

Establishing a trusted relationship with a diamond merchant similar to a stockbroker involves more than purchasing diamonds. One needs to understand diamonds.

Just like not all stockbrokers are experts in their fields, likewise there are a lot of diamond vendors whose expertise is very questionable.

Offering diamonds as security is very risky for outside buyers.

The diamond consumer has no control and is exposed.

It's all about profit. If the profit is sufficient why borrow ?

How are diamond consumers protected against unsecured credit, embezzlement and loss ?

Will the members of the independent board be held liable ? I doubt it.
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Why are the directors not securing their own personal assets on diamonds giving themselves the 12% per annum returns instead ?

Such charitable behaviour can only be praised and admired when wishing to share their wealth with so many others surely ?

" Sophisticated investors " ( who are they pandering to ? ) would be wise to insist on demanding the profit and loss statement independently audited prior to any commitment as a precautionary safeguard.

Secondly insist on the credentials and personal references of company directors including any personal name changes, personal liabilities and UNPAID COMPANY DEBTS if any.

If the profits are substantial and the directors are so confident, why then are they outsourcing funds to borrow from the public ? Why not just stock diamonds, sell diamonds, take the profit and buy more diamonds ? How difficult can it be ?

Or why not just borrow from a legitimate recognised lending institution backed up by their own personal assets ?

Setting up offices in Perth & Singapore ? Why Perth ? Hardly anyone lives there and one prominent diamond wholesaler just closed their doors. Singapore ? Imagine trying to hit first base in Singapore with their stringent business regulations without a prospectus ?

This above press release is laughable and full of fluff. It's difficult to understand how an experienced journalist like John Beveridge of the Herald Sun would even put his name to this story by providing the tacit endorsement that both Messrs Buckby and Barry, whose diamond credentials both unknown to me, are desperately seeking.

For real advice when wishing to invest in diamonds contact Diamond Imports.

Diamond Imports~Australia's No. 1 Diamond Dealer never needs to borrow your money to buy you diamonds because all our diamonds are already in stock.
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Avoid drop shippers selling conflict of interest virtual diamonds with questionable unrecognised credentials hiding behind pseudo diamond grading certificates

Daniel F Katz
GG (GIA ) RFC ( Aust.)

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Meet Ponzi !

Expecting a big return on an investment ?

Check credentials

Check security

Think again !

***

Additional Reading :

Diamond Pitfalls

Diamond Ponzi Scheme in Australia - ABN Amro Sees No Recovery in Diamond Market -

Diamond Banks Demand More Security

Branding Madoff : Symbol of Greed & Arrogance

Bankers Diamond Credit Squeeze Continues

Credit Alert by Martin Rapaport

No More Memo Diamonds ~ No More Extended Credit

Diamond Supply Supported by Antwerp Banks

Why Diamond Retailers Deserve No Credit

Diamonds Piggy Bank Broken

Diamonds Fabric of Trust & Madoff-ization

40,000 investors lose $64m in CMKM Diamonds stock scheme

Queensland Diamond Scams :The Land of the Big Cane Toad

Diamonds: Undercutting Prices & Deceptive Websites

The Dumbest Way to Buy Diamonds

Diamond Drop Shippers

BEWARE Bogus Diamond Website Listings

Prostituting World Wide Web Diamonds

How to Buy Diamonds according to Diamond Imports

Jewellery Trade
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CASH BUYERS ONLY
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Please Note
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WE DO NOT CONSIGN

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TRY USING YOUR OWN MONEY INSTEAD
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Our Diamonds are exclusive to www.DiamondImports.com.au
You will not see our diamonds on any other website

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" This volatile investment market is one to watch "

Diamond investments may turn up profits

“in the rough”
Published on: Thursday, March 27, 2008 Written by: Melana Yanos

Buying diamonds as gifts and as jewelry is a common practice, but investing in diamonds is not for the average person. After all, the most economically feasible diamond investments still require access to a tremendous amount of capital and high tolerance of risk.

Diamonds have been notoriously difficult to sell on the resale market at a profit; in order to make money, diamond investors need to find a buyer who is willing to pay more for their stone than they did. Nevertheless, diamond investments are being viewed as increasingly attractive as a result of recent trends that suggest a diminishing global supply.

Multifaceted investments

Diamonds carry unique attributes that distinguish them from other types of investments. As a highly concentrated asset, diamonds are extremely portable and easy to have on one’s person at all times as jewelry or loose stones. Investing in diamonds also carries benefits of financial privacy and complete ownership.

Diamond values are not directly linked to stock and bond markets. Diamond prices have increased an average of 15 percent each year since 1949, according to statistics published by diamond manufacturer Ajediam on their company website.

[ The Diamond Guru: Not so. Prices crashed overnight in 1980 when De Beers decided to flood the market with USD$8 billion of their own reserves in order to gain control and flush out rough diamonds that were being stored by cutters. It has taken over 25 years for consumer confidence to reach today's levels. Fortunately De Beers only control 40% of today's market as opposed to nearly 80% back in 1980 ]

“Diamonds do hold their value well,” Chuck Jaffe wrote in his syndicated column last December. “So long as the stone is real, it’s not going to zero like a company headed for bankruptcy.”

International demand for diamonds appears to be on the rise, especially as an increasing number of high net worth individuals emerge in the Russian, Middle Eastern and Asian markets. The emerging middle class in China is expected to create a sharp increase in demand for diamonds and other luxury goods, according to an article in The Financial Post last June.

Extremely rare stones seem to carry the highest potential for strong performance and returns. The values of colored diamonds, for instance, have roughly doubled every six to seven years during the past 35 years, Stephen Hershoff, senior executive and managing director at Pastor-Genève, said in an e-mail interview.

Furthermore, “the colored diamond market has always been an asset class that has held its value during recessions and economic downturns,” he said.

Colored diamonds are exceptionally scarce when compared to the white variety; in terms of natural supply, the ratio of white to colored stones is approximately 10,000-to-1, according to an article posted on the Pastor-Genève website last October.

Investing in diamonds, however, is a high-risk endeavor. Regardless of the quality and appraised value of the stone, an investor’s ability to reap a profit is at the mercy of what a buyer is willing to pay.

“Diamonds are appraised and graded, but prices move based on consumer sentiment,” Jaffe wrote.

Diamonds are not especially liquid, and an investor who wishes to sell his or her diamond in order to obtain quick cash can suffer enormous losses.

“Dealers who buy jewelry don’t pay retail, and the nation’s pawn shops are full of expensive gems that were turned in for a lot less cash than they were purchased for,” Jaffe wrote.
Even colored diamonds “take some time to sell,” Hershoff said.

“There are no specific bids and offers on a daily basis,” he said. “It is more like art, coins or land in that you have to watch for similar sales to get an idea of price performance.”

If diamonds are bought at retail prices—generally two to three times more than true wholesale prices—there is “no shot” of selling them for a profit for at least a decade, Jaffe said.

[ The Diamond Guru :There are several factors contributing to low liquidity of diamonds. One of the main is the lack of terminal market. Most commodities have terminal markets, and some form of commodities exchange, clearing house, and central storage facilities. This does not exist for diamonds. Diamonds are also subject to value added tax in the Unites Kingdom, Europe, Goods & Services Tax in Australia and sales tax in most developed countries, therefore reducing their effectiveness as an investment medium. Most diamonds are sold through retail stores at very high profit margins. This is due to high overhead costs of operating a jewelry retail store ]

And as a highly concentrated and portable asset, diamonds can be easily lost or stolen without proper security measures.

Recent history serves as a cautionary tale about the potential for diamond scams. In the late 1970s, a large number of fraudulent investment firms engaged in a phone campaign to sell mail-order diamonds, according to a chapter in The Diamond Invention by Edward Jay Epstein. In addition, many of the firms held diamond-investment seminars in expensive hotels and sold sealed packets of diamonds to the audience.

Although the sealed packets distributed through seminars and by mail included certificates guaranteeing the quality of the diamonds—so long as the packets remained sealed—buyers were in for an unpleasant surprise.

“Customers who broke the seal [in order to verify the quality of the diamonds] often learned from independent appraisers that their diamonds were of a quality inferior to that stated,” Epstein wrote. “Many were worthless.”

In general, investors who know little about diamonds and how to buy them can be especially ripe targets for unscrupulous dealers.

Mining the diamond market

Diamond investments are often met with pessimism and, at times, downright condescension. Jaffe, for instance, wrote about diamonds in his syndicated column, titled Stupid Investment of the Week, last December. Diamonds may provide a terrific return as an “investment in emotion,” but “try to cash in a diamond for a profit and you have all sorts of trouble,” he wrote.

But is investing in diamonds as imprudent as it sounds? Counter to what the skeptics might expect, institutional investors are beginning to enter the diamond investment market. Swiss firm Diapason Commodities has been raising money for the launch of its Diamond Circle Capital product, according to an article published in Investment Adviser last June.

The fund will only buy polished diamonds worth more than £506,000, or approximately $1 million. The product will be the first London Stock Exchange listed fund to invest in diamonds and trade them on the secondary market.

The state of the diamond market is even more compelling.

Diamond supply is declining for the first time in 30 years and it is primarily happening in areas where they find rare colored diamonds,” Hershoff said.

The leading mine in Australia, which produces 90 percent of the world’s pink diamonds, saw a drop of 30 percent last year in supply, he said. An additional decline of 20 to 30 percent is expected for this year.

“Pink diamonds are becoming more and more difficult to source, which is putting tremendous upward pressure on prices,” he said.

In addition, the balance of supply and demand for diamonds—and consequently, their pricing—is no longer artificially controlled by the DeBeers company, which historically owned more than 80 percent of the market.

“DeBeers is no longer the controlling factor that it once was 30 years ago,” Hershoff said. “[Their] market share has dropped to just over 40 percent of world supply; they have sold off their stockpile, and missed out on new discoveries in Canada, Australia, Russia and Central Africa.”

How to invest in diamonds

Diamond investments are probably not suitable for most investors because of the amount of capital required.

[ The Diamond Guru : Diamonds are a problematic investment. While it is easy to buy a diamond, it is not easy to sell one unless one is already an established diamond merchant. Establishing a trusted relationship with a diamond merchant similar to a stockbroker involves more than purchasing diamonds. One needs to understand diamonds. Just like not all stockbrokers are experts in their fields likewise there are a lot of diamond vendors whose expertise is very questionable.

However we disagree with the author on the amount of capital required to invest. Real Estate property investments tend to cost a lot more than diamond " investments " ] .

“The new breed [of diamond investors] are probably already millionaires and—unlike the majority of normal investors—able to shoulder losing up to £50,000, the minimum you would spend on investment diamonds,” according to the article posted on the Pastor-Genève website last October

There are ways to mitigate the risk of enormous losses, though. If investors decide to buy, they should follow two basic rules: first, they should buy diamonds at wholesale or near-wholesale prices; and second, they should only buy diamonds that have been internationally certified by one of the major gemological laboratories, such as the Gemological Institute of America (GIA).

[ There are numerous diamond grading laboratories, and there is no easy way for investors, consumers, or even dealers to know the relative competence and integrity of each. See NON compliant diamond grading laboratories here.

Even the market-leading Gemological Institute of America (GIA) suffered embarrassment recently when a small number of large, important and valuable diamonds were overgraded, resulting in legal action by one dealer against the dealer who had submitted them to the GIA for grading.

This scandal has become known as Certifigate.

A number of GIA employees left after the scandal emerged, and the GIA has changed a number of its procedures.

There are also a number of laboratories affiliated to CIBJO. There must be commercial pressure on all labs to upgrade marginal stones or lose business to other labs who are prepared to reduce standards.

Read more here:How GIA Grades Diamonds: The Real Truth ]

Investors should try to obtain stones that are as rare as possible, such as stones of the colored varieties. By virtue of their rarity, colored stones are comparatively easy to pass on and are “consequently popular investments,” according to the Pastor-Genève website.

It is important that colored diamonds are natural stones as opposed to synthetic creations, according to Hershoff. Synthetic colored diamonds are much more abundant and priced much lower than their authentic counterparts.

Investors should also be wary of buying uncut stones, which can be “extremely risky,” Hershoff said.

“The difference in value between the colored diamond grades once the stone is cut and polished can mean tens and even hundreds of thousands of dollars per carat,” he said.

[ The Diamond Guru: Polished and rough diamonds lack some of the desirable attributes of investment vehicles, including liquidity, homogeneity and fungibility.

Fungibility does not imply liquidity, and liquidity does not imply fungibility. Diamonds can be bought and sold (the trade is liquid), but individual diamonds are not interchangeable (diamonds are not fungible). Zimbabwean dollar bank notes are interchangeable in London (they are fungible there), but they are not easily traded there (they are not liquid in London).

However Round Brilliant Diamonds in D Colour and either IF or VVS1 Clarity in Excellent Proportions, Excellent Polish and Excellent Symmetry are considered fungibile amongst the Chinese community. The problem here lies that one must always verify the diamond, it's grading and the grading report are genuine if these diamonds are acceptable as hard currency.]

Because sales are largely unregulated, “finding a reputable broker is key,” according to the Pastor-Genève website. Performing due diligence on potential brokers can help protect an investor from abuse by unscrupulous individuals.

As is the case for any type of investment, investors should educate themselves as much as possible about diamonds and what factors could potentially affect their values.
When speculated properly, diamonds may prove to yield decent performance as medium- or long-term investments. However, a successful diamond investment will probably require the ultimate luxury: time.

“Most investors look at holding periods of at least five years,” Hershoff said. “When they do look to sell they allow a few months to broker the stone, whether at auction, at the dealer level, through trade shows or to retail buyers.”

Retail diamond prices are continuing to trend upwards but profitable margins on resale remain largely unproven. Still, if demand outstrips supply as industry experts predict, then diamonds present an enticing—though risky—opportunity for investment.

[ The Diamond Guru : The main positive investment parameter of diamonds is their high value per unit weight, which makes them easy to store and transport. A high quality diamond weighing as little as 2 or 3 grams could be worth as much as 100 kilos of gold. This extremely condensed value and portability does bestow diamonds as a form of emergency disaster fund. People and populations displaced by war or extreme upheaval have utilised this property successfully, and presumably will do so again in the future.]

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Feb. 1, 2008 Industry Analysis:

The Economy May Slow, but Diamond Cutters Won't

As economists debate the likelihood of a U.S. recession, diamond manufacturers in India, Israel and New York say they plan to sell to emerging markets rather than slow their production of polished stones.

Manufacturers continue to be more concerned about future supplies -- largely because of rough being redirected to African diamond operations and changes in the De Beers Diamond Trading Company (DTC) sightholder list -- than they are about the prospect of diminished demand in the U.S., even though it accounts for about 48% of world diamond sales."We anticipated the slowdown since last summer and have been sending our production to the fast-growing markets of the Far East and the domestic [Indian] retailers," said one major Indian manufacturer.

China, India and the Middle East have seen double-digit growth during the past five years. They still represent a relatively small portion of world demand, however, leaving some executives concerned about accumulating inventory and increasing debt.

Those diamond manufacturers who have scaled back their polishing operations because of the economy acknowledged that other, competing manufacturers will certainly purchase the rough they don't use, so it is unlikely there will be any decrease in polished diamond supplies this year.

This is supported by the fact that southern African "beneficiation" diamond cutting operations will undoubtedly continue to grow and, given the enormous political pressure for their success, will not be subject to supply cutbacks.

Despite slower-than-expected U.S. holiday sales, the DTC released large allocations of rough and raised prices an average of 3.5% at the Jan. 14-18 sight. Contrary to initial reports, the sight -- which totaled nearly $600 million -- included increases across the board, not just on the large, high-quality material.

Diamond manufacturers see this as a clear sign that the DTC has truly abandoned its longtime "custodianship" of the diamond market, withholding supplies and stabilizing prices when the market turned soft.While most U.S. retailers will turn in positive numbers for 2007, because the slowdown did not begin in earnest until September, economists warn that 2008 may bring sales declines.

This will force some retailers to retrench and lead to consolidation within the wholesale and manufacturing sectors of the industry.Indeed, that was the mood in Japan, the world's second largest consumer diamond market.

Dealers there are very pessimistic about their prospects for 2008, according to a Jewellery News Asia (JNA) survey. Diamond dealers who responded to JNA's spot survey said they believe sales will decline around 5%-15% or, at best, see a single-digit increase this year against a very lackluster 2007.

RETAIL: Demand for larger diamonds and top colored stones was the one bright spot for U.S. retail jewelers in 2007, but according to a just-released luxury market survey, that spot may be dimming as well.

According to a survey conducted by Unity Marketing, luxury consumer confidence for the final quarter of 2007 plunged to its lowest level since the survey began four years ago, as wealthy consumers adopted an increasingly pessimistic view of the U.S. economy. The report noted that spending among this group fell 20% during the holiday season and will continue to be soft as an increasing number of respondents claimed they would continue to cut back during 2008.

Confidence among general consumers declined in January, according to the Conference Board's monthly survey. January's Consumer Confidence Index fell to 87.9 from 90.6 in December, suggesting that consumers may continue to restrain their spending.

The Board found strong pessimism about the direction of the economy over the coming six months, particularly business conditions and employment prospects.MACRO: The world stock markets continued their volatility, while gold and platinum soared to all-time records in the wake of economic uncertainty.

This week opened with gold spotting at $927.50 per ounce, while platinum's per-ounce price broke the $1,700 barrier.The U.S. Federal Reserve, which last week issued its steepest interest rate cut in more than two decades (0.75%), added another half percent drop at this week's meeting, hinting at even further cuts if the economy fails to respond.

The downturn in the U.S. housing market and the related subprime mortgage meltdown are taking most of the blame for the current turmoil. Sales of new homes fell last year by 26%, the steepest drop since records began in 1963, the U.S. Commerce Department said on Monday.

In December, the median price of a new home was down 10.9% from December of the previous year.One bright spot appeared this week as the U.S. Commerce Department reported that demand for big-ticket durable goods rose 5.2% in December, more than a percentage point above what economists had predicted, prompting some to say that the economy has more underlying strength than many analysts believe.

The U.S. Congress is considering an economic stimulus package to jump-start consumer spending. Economists remain divided over whether or not the legislative package or the Federal Reserve rate cuts will have any real effect on improving the economy. Source: Russell ShorSenior Industry Analyst

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Diamond Enhancement / Treated Diamonds Sold by Auctioneers


Trade Alert

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Fracture filled diamond before and after ( above )
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Fracture Filled Diamonds Sold

at

Jewellery Auctions

Recently in a story to be soon released in the mainstream media about the state of the Australian jewellery industry's failure to police it's own code of ethics, a fracture filled diamond was sold by an Australian high profile jewellery auction house backed up by a valuation issued by a member of the National Council of Jewellery Valuers.

The valuation did NOT disclose the diamond was fracture filled.

Failing to disclose is deceptive and fraudulent.

Such inferior diamonds are worth considerably less ,if nothing at all, because most fracture filled diamonds are reject diamonds that can not be sold as commercial gem quality to dealers.

These otherwise unattractive cracked diamonds need to be treated and enhanced to make these lowest quality diamonds marketable.

In addition the misleading and deceptive certification of the coated pink diamond inaccurately documented by the Bolton Gem's created Australian Diamond Grading Laboratory, the Queensland wholesaler of their branded " Eternity " diamonds, has not gone unnoticed and we have recently been approached by several journalists who are in the midst of preparing their own independent stories.

COME IN SUCKER !!! The jewellery auctioneers love ya !

Most of the jewellery auctioneers are low life scum bags who have no appreciation for fine jewellery with credentials that make used car dealers look reputable.

In fact used car dealers are more reputable ! The motor traders association have a self regulating code of ethics they abide by. The GAA, JAA and NCJV do not.

The GAA, JAA and NVJC are powerless gutless two faced sperm burps who smile a lot and are extremely polite. Egg farts have more power and smell better too. They make me sick and I do not hide my contempt for them.

This is not the first time NJCV valuations have appeared as inaccurate confirming that the jewellery consumer has very little protection.

Channel 7's Today Tonight Show last year did a story on three NCJV jewellery valuers who gave three different valuations on the same diamond only to be exposed later as being utterly incompetent because the diamond was a synthetic diamond.

Accusations of entrapment followed but so what ? Schmucks like this need to be exposed and they only have themselves to blame.

The two " industry experts " that were approached by the JAA were unable to identify a coated diamond yet are still certifying diamonds. This was despite the fact they did not even conduct the required testing methods due to lack of up to date testing equipment yet the Diamond Certification Laboratory of Australia who identified the ADGL certified coated diamond orignally were castigated and blamed for warning everyone of the danger.

Mike Muller of the Australian Diamond Grading Laboratory, a more grand sounding business organisation than it really is, with his twenty five years of experience even admitted he had not seen enough coated diamonds to be experienced in their identification and falsely stated that there was not enough information out there or stones avaialble for gemologists to examine. This was not true.

GIA and other respected gemmological labs reports on these coated diamonds had already been documented years earlier. A simple Google search is proof enough.

ADGL's Mike Muller who is a member of the JAA and who certified the coated diamond, offered numerous excuses but only looked more foolish by attempting to cover up his own unprofessional ineptitude while claiming to have twenty five years of experience and grading to GIA standards.

A sworn affadavit by Mike Muller sent to me is futher proof of how ADGL has failed to safeguard jewellery retailers and not the public consumer. More about this in another story suffice to say the questionable independence of ADGL's diamond certificates are laughable and just downright stupid if not just incredibly embarrassing.

The silly thing was that you could easily see the coating on the diamond using a 10x loupe.

Of course it was all a plot and a conspiracy being orchestrated by those of us who were unable to compete as was claimed by some of the very same people who themselves are still trading unfairly.

We have written to both the Gemmological Association of Australia and the National Council of Jewellery Valuers regarding the following and no response to these issues have been currently addressed :

1) Professional Honesty & Integrity

2) Misleading and deceptive behaviour

3) Diminishing public confidence

4) Conflict of interest issues

5) Inability to correctly identify and accurately grade diamonds.

6) Disciplinary action and expulsion.

The public consumer of diamonds is not protected.

Both the GAA and the NCJV are a trade organisation that continues to ignore it's own code of ethics.

Most of the jewellery auction houses retain the services of these incompetent valuers and hide behind their official-looking valuation reports. Toilet paper is more functional.

Both auctioneers and valuers who often collude are NOT to be trusted.

The valuations are usually exaggerated and over inflated giving the impression to the potential consumer they are ready to land a bargain.

Real bargains do not have to be sold at auctions. They are usually snatched up prior by dealers.

The public are being taken for suckers !

Jewellery purchased from auction houses are generally perceived as being bargains when most times you can purchase a brand new item of jewellery for the same price at a wholesale level from a small manufacturing jeweller rather than some high profile brand name retailer.

NCJV : Another Bullshit Trade Organisation & Top 5 Myths About Jewellery Valuations

Top 5 Myths About Jewellery Valuations

MYTH 1 : An insurance valuation can only be done by a registered valuer
WRONG! An insurance valuation is an assessment how much it would cost to replace a particular piece of jewellery in the current marketplace. The significant determinants of value of diamond jewellery are the 4 C's of the diamond together with retail market pricing information. If all this information is available, a replacement value can be computed. If the diamond is accompanied by an internationally recognised grading certificate, the 4 C's are known and accurate. All that remains is to price that diamond in the current marketplace. All that is important to your insurance company is that the valuation is detailed and accurate. This will ensure you of like-for-like replacement.

MYTH 2 : I got a great deal, I was shown a valuation of double the ticket price
WRONG! You should be extremely suspicious of a jeweller who shows you a high valuation as proof that you are getting a great deal. In many circumstances, the jeweller using the valuation to sell you the item is in fact the valuer. If you were buying a house, would you let the seller perform the building inspection for you? A valuation should only be offered AFTER you have completed your purchase. After all, the true insurance replacement value of the piece of jewellery is what you paid for it.

MYTH 3 : A valuation is accurate even if your diamond is not certified
WRONG! A valuation can only be accurate if the characteristics of the diamond have been accurately determined. Although many valuers have vast experience in the industry, the accurate determination of the characteristics of a diamond is a scientific process requiring extremely expensive diagnostic equipment. Only internationally recognised laboratories possess this required equipment. All a valuer can do for an uncertified diamond is make an educated guess of these characteristics. Unfortunately, even slight differences in the valuers grading to an accurate laboratory grading could translate to thousands of dollars in value.

MYTH 4 : A valuer does not have to be independent
WRONG! Some jewellers use valuations as selling tools. If the jeweller and the valuer are not independent, the valuation may be inflated to enable the jeweller to sell the diamond. The easiest way of inflating a valuation is to overstate the grade of the diamond. This can only occur if the diamond is uncertified. The valuer should have no vested interest in the specific value attributed to your jewellery.

MYTH 5 : The higher my valuation, the higher my insurance payout
WRONG! You will pay higher insurance premiums, but, in the event of a loss, your insurance company reserves the right to replace the jewellery with a similar piece. The insurance company can and will source the replacement at a cost much lower than you actually paid, regardless of the valuation. The only situation in which you will be paid out is if you have under-valued the item and the insurance company cannot replace it for your insured value.

Why diamond buyers have contempt for jewellers

Another Dodgy Grading Laboratory
Telephone Enquiry

ADGL : " Dodgy Grading Laboratory, may I help you? "
Caller: " Yes, I'd like some information about your laboratory. "
ADGL : " OK, what would you like to know ? "
Caller: " I don't know. That's why I called."

~

Diamond Enhancement
From Wikipedia, the free encyclopedia

Diamond enhancements are specific treatments, performed on natural diamonds (usually those already cut and polished into gems), which are designed to improve the gemological characteristics — and therefore the value — of the stone in one or more ways. These include clarity treatments such as laser drilling to remove inclusions, application of sealants to fill cracks, color treatments to improve a white diamond's color grade, and treatments to give fancy color to a white or off-color diamond.

The CIBJO and government agencies such as the United States Federal Trade Commission explicitly require the disclosure of most diamond treatments at the time of sale. Some treatments, particularly those applied to clarity, remain highly controversial within the industry — this arises from the traditional notion that diamond holds a unique or "sacred" place among the gemstones, and should not be treated too radically, if for no other reason than a fear of damaging consumer confidence.

Treated diamonds usually trade at a significant discount to untreated diamonds. This is due to several factors, including relative scarcity — a much larger number of stones can be treated to reach gem quality than are found naturally occurring in a gem quality state — and the potential impermanence of various treatments. Therefore, it is unusual to see a diamond with good overall gemological characteristics undergo treatment. Diamonds which are chosen for treatment are usually those that would be otherwise difficult to sell as gem diamonds, where inclusions or fractures noticeably detract from the beauty of the diamond to even casual observers. In these cases, the loss in value due to treating the diamond is more than offset by the value added by the mitigating of obvious flaws.

Contents

Clarity enhancements
1.1 Laser drilling
1.2 Fracture filling
2 Color enhancements
2.1 Irradiation
2.2 Coatings
2.3 High-pressure high-temperature treatment
3 See also
4 Footnotes
5 References

Clarity enhancements

See also: diamond clarity
The clarity, or purity, of a diamond — the relative or apparent severity of flaws within the stone — has, like the other "four Cs", a strong bearing on the evaluation of a diamond's worth. The most common flaws, or inclusions, seen in diamonds are fractures (commonly called feathers, due to their feathery whitish appearance), and solid foreign crystals within the diamond; such as garnet, diopside, or even other diamonds. The size, color, and position of inclusions can reduce the value of a diamond, especially when other gemological characteristics are good. Those who prepare diamonds for sale sometimes choose to reduce the visual impact of inclusions through one or more of a variety of treatments.

Laser drilling ( pictured above )

The combustibility of diamond has allowed the development of laser drilling techniques which, on a microscopic scale, are able to selectively target and either remove or significantly reduce the visibility of crystal or iron oxide-stained fracture inclusions. Diamonds have been laser-drilled since at least the mid-1980s. Laser drilling is often followed by glass infilling.
The drilling process involves the use of an
infrared laser (wavelength about 1060 nm) to bore very fine holes (less than 0.2 millimeters or 0.005 inches in diameter) into a diamond to create a route of access to an inclusion. Because diamond is transparent to the wavelength of the laser beam, a coating of amorphous carbon or other energy-absorbent substance is applied to the surface of the diamond to initiate the drilling process. The laser then burns a narrow tube to the inclusion. Once the included crystal has been reached by the drill, the diamond is immersed in sulfuric acid to dissolve the crystal or iron oxide staining. This process is not effective for inclusions which are diamonds themselves, as diamond is not soluble in sulfuric acid.
Several inclusions can be thus removed from the same diamond, and under microscopic inspection the fine bore holes are readily detectable. They are whitish and more or less straight, but may change direction slightly, and are often described as having a "wrinkled" appearance. In reflected light, the surface-reaching holes can be seen as dark circles breaching the diamond's facets. The diamond material removed during the drilling process is destroyed, and is often replaced with glass infilling, using the fracture filling techniques described below.

Fracture filling

Around the same time as the laser drilling technique was developed, research began on the fracture filling of diamonds to better conceal their flaws. The glass filling of diamond often follows the laser drilling and acid-etching of inclusions, though if the fractures are surface-reaching, no drilling may be required. This process, which involves the use of specially-formulated glasses with a refractive index approximating that of diamond, was pioneered by Zvi Yehuda of Ramat Gan, Israel. Yehuda is now a brand name applied to diamonds treated in this manner, and the process has apparently changed little since its inception. Koss & Schechter, another Israel-based firm, attempted to modify Yehuda's process in the 1990s by using halogen-based glasses, but this was unsuccessful. The details behind the Yehuda process have been kept secret, but the filler used is reported to be lead oxychloride glass, which has a fairly low melting point. The New York-based Dialase also treats diamonds via a Yehuda-based process, which is believed to use lead-bismuth oxychloride glass.

The glass present in fracture-filled diamonds can usually be detected by a trained gemologist under the microscope: the most obvious signs — apart from the surface-reaching bore holes and fractures associated with drilled diamonds — are air bubbles and flow lines within the glass, which are features never seen in untreated diamond. More dramatic is the so-called "flash effect", which refers to the bright flashes of color seen when a fracture-filled diamond is rotated; the color of these flashes ranges from an electric blue or purple to an orange or yellow, depending on lighting conditions (light field and dark field, respectively). The flashes are best seen with the field of view nearly parallel to the filled fracture's plane. In strongly colored diamonds the flash effect may be missed if examination is less than thorough, as the stone's body color will conceal one or more of the flash colors. For example, in brown-tinted "champagne" diamonds, the orange-yellow flashes are concealed, leaving only the blue-purple flashes to be seen. One last but important feature of fracture-filled diamonds is the color of the glass itself: it is often a yellowish to brownish, and along with being highly visible in transmitted light, it can significantly impact the overall color of the diamond. Indeed, it is not unusual for a diamond to fall an entire color grade after fracture-filling. For this reason fracture-filling is normally only applied to stones whose size is large enough to justify the treatment: however, stones as small as 0.02 carats (4 mg) have been fracture-filled.

The fracture-filling of diamond is a controversial treatment within the industry — and increasingly among the public as well — due to its radical and impermanent nature. The filling glass melts at such a low temperature (1673 Kelvin) that it easily "sweats" out of a diamond under the heat of a jeweler's torch; thus routine jewelry repair can lead to a complete degradation of clarity or in some cases shattering, especially if the jeweler is not aware of the treatment. Similarly, a fracture-filled diamond placed in an ultrasonic cleaner may not survive intact. Yehuda diamonds are however given a warranty, which allows owners of their diamonds to return them for retreatment following any degradation of the glass filling.

It is notable that most major gemological laboratories, including that of the influential Gemological Institute of America, refuse to issue certificates for fracture-filled diamonds. Labs that do certify these diamonds may render any treatment benefit moot by disregarding apparent clarity and instead assigning the diamond a grade reflecting its original, pre-treatment clarity.

Colour enhancements

See also: diamond color
Generally there are three major methods to artificially alter the color of a diamond: irradiation with high-energy subatomic particles; the application of thin films or coatings; and the combined application of high pressure and high temperature (HPHT). However, there is recent evidence that fracture filling is not only used to improve clarity, but that it can be used for the sole purpose to change the color into a more desirable color as well. [1]

The first two methods can only modify color, usually to turn an off-color Cape series stone (see Material properties of diamond: Composition and color) into a more desirable fancy-colored stone. Because some irradiation methods produce only a thin "skin" of color, they are applied to diamonds that are already cut and polished. Conversely, HPHT treatment is used to modify and remove color from either rough or cut diamonds—but only certain diamonds are treatable in this manner. Irradiation and HPHT treatments are usually permanent insofar as they will not be reversed under normal conditions of jewelry use, whereas thin films are impermanent.

Irradiation

Pure diamonds, before and after irradiation and annealing. Clockwise from left bottom: 1) Initial (2×2 mm) 2-4) Irradiated by different doses of 2-MeV electrons 5-6) Irradiated by different doses and annealed at 800 °C.

Sir William Crookes, a gem connoisseur as well as a chemist and physicist, was the first to discover radiation's effects on diamond color when in 1904 he conducted a series of experiments using radium salts. Diamonds enveloped in radium salt slowly turned a dark green; this color was found to be localized in blotchy patches, and it did not penetrate past the surface of the stone. The emission of alpha particles by the radium was responsible. Unfortunately radium treatment also left the diamond strongly radioactive, to the point of being unwearable [2]. A diamond octahedron so treated was donated by Crookes to the British Museum in 1914, where it remains today: it has lost neither its color nor radioactivity.

Nowadays diamond is safely irradiated in four ways: proton and deuteron bombardment via cyclotrons; gamma ray bombardment via exposure to cobalt-60; neutron bombardment via the piles of nuclear reactors; and electron bombardment via Van de Graaff generators. These high-energy particles physically alter the diamond's crystal lattice, knocking carbon atoms out of place and producing color centers. Irradiated diamonds are all some shade of green, black, or blue after treatment, but most are annealed to further modify their color into bright shades of yellow, orange, brown, or pink. The annealing process increases the mobility of individual carbon atoms, allowing some of the lattice defects created during irradiation to be corrected. The final color is dependent on the diamond's composition and the temperature and length of annealing.

Cyclotroned diamonds have a green to blue-green color confined to the surface layer: they are later annealed to 800 °C to produce a yellow or orange color. They remain radioactive for only a few hours after treatment, and due to the directional nature of the treatment and the cut of the stones, the color is imparted in discrete zones. If the stone was cyclotroned through the pavilion (back), a characteristic "umbrella" of darker color will be seen through the crown (top) of the stone. If the stone was cyclotroned through the crown, a dark ring is seen around the girdle (rim). Stones treated from the side will have one half colored deeper than the other. Cyclotron treatment is now uncommon.

Gamma ray treatment is also uncommon, because although it is the safest and cheapest irradiation method, successful treatment can take several months. The color produced is a blue to blue-green which penetrates the whole stone. Such diamonds are not annealed. The blue color can sometimes approach that of natural Type IIb diamonds, but the two are distinguished by the latter's semiconductive properties. As with most irradiated diamonds, most gamma ray-treated diamonds were originally tinted yellow; the blue is usually modified by this tint, resulting in a perceptible greenish cast.

The two most common irradiation methods are neutron and electron bombardment. The former treatment produces a green to black color that penetrates the whole stone, while the latter treatment produces a blue, blue-green, or green color that only penetrates about 1 millimeter deep. Annealing of these stones (from 500–900 °C for neutron-bombarded stones and from 500–1200 °C for electron-bombarded stones) produces orange, yellow, brown, or pink. Blue to blue-green stones that are not annealed are separated from natural stones in the same manner as gamma ray-treated stones.

Prior to annealing, nearly all irradiated diamonds possess a characteristic absorption spectrum consisting of a fine line in the far red, at 741 nm — this is known as the GR1 line and is usually considered a strong indication of treatment. Subsequent annealing usually destroys this line, but creates several new ones; the most persistent of these is at 595 nm.

It should be noted that some irradiated diamonds are completely natural. One famous example is the Dresden Green Diamond. In these natural stones the color is imparted by "radiation burns" in the form of small patches, usually only skin deep, as is the case in radium-treated diamonds. Naturally irradiated diamonds also possess the GR1 line. The largest known irradiated diamond is the Deepdene.

Coatings
The application of colored
tinfoil to the pavilion (back) surfaces of gemstones was common practice during the Georgian and Victorian era; this was the first treatment — aside from cutting and polishing — applied to diamond. Foiled diamonds are mounted in closed-back jewelry settings, which may make their detection problematic. Under magnification, areas where the foil has flaked or lifted away are often seen; moisture that has entered between the stone and foil will also cause degradation and uneven color. Because of its antique status, the presence of foiled diamonds in older jewelry will not detract from its value.
In modern times, more sophisticated surface coatings have been developed: these include violet-blue dyes and vacuum-sputtered films resembling the
magnesium fluoride coating on camera lenses. These coatings effectively whiten the apparent color of a yellow-tinted diamond, because the two colors are complementary and act to cancel each other out. Usually only applied to the pavilion or girdle region of a diamond, these coatings are among the hardest treatments to detect — while the dyes may be removed in hot water or alcohol with ease, the vacuum-sputtered films require a dip in sulfuric acid to remove. The films can be detected under high magnification by the presence of raised areas where air bubbles are trapped, and by worn areas where the coating has been scratched off. These treatments are considered fraudulent unless disclosed.
Another coating treatment applies a thin film of
synthetic diamond to the surface of a diamond simulant. This gives the simulated diamond certain characteristics of real diamond, including higher resistance to wear and scratching, higher thermal conductivity, and lower electrical conductivity. While resistance to wear is a legitimate goal of this technique, some employ it in order to make diamond simulants more difficult to detect through conventional means, which may be fraudulent if they are attempting to represent a simulated diamond as real.
[
edit] High-pressure high-temperature treatment
A small number of otherwise gem-quality stones that possess a brown body color can have their color significantly lightened or altogether removed by HPHT treatment, or, depending on the type of diamond, improve existing color to a more desirable saturation. The process was introduced by
General Electric in 1999. Diamonds treated to become colorless are all Type IIa and owe their marring color to structural defects that arose during crystal growth, known as plastic deformations, rather than to interstitial nitrogen impurities as is the case in most diamonds with brown color. HPHT treatment is believed to repair these deformations, and thus whiten the stone. (This is probably an incorrect conclusion, the whitening due to destruction of stable vacancy clusters according to one of the researchers). Type Ia diamonds, which have nitrogen impurities present in clusters that do not normally affect body color, can also have their color altered by HPHT. Some synthetic diamonds have also been given HPHT treatment to alter their optical properties and thus make them harder to differentiate from natural diamonds. Pressures of up to 70,000 atmospheres and temperatures of up to 2,000 °C (3,632°F) are used in HPHT procedure.
Also in 1999, Novatek, a Provo, UT manufacturer of industrial diamonds known for its advancements in diamond synthesis, accidentally discovered that the color of diamonds could be changed by the HPHT process. The company formed NovaDiamond, Inc. to market the process. By applying heat and pressure to natural stones, NovaDiamond could turn brown Type I diamonds light yellow, greenish yellow, or yellowish green; improve yellowish Type IIa diamonds by several color grades, even to white; intensify the color of yellow Type I diamonds; and make some bluish gray Type I and Type IIb colorless (although in some cases natural bluish gray diamonds are more valuable left alone, as blue is a highly desired hue). In 2001, however, NovaDiamond quit the HPHT gem business because of what the company's leader, David Hall, characterized as the underhanded practices of dealers. Apparently, dealers were passing off NovaDiamond enhanced gems as naturally colored, and the company refused to be party to this deception.

Definitive identification of HPHT stones is left to well-equipped gemological laboratories, where Fourier transform spectroscopy (FTIR) and Raman spectroscopy are used to analyze the visible and infrared absorption of suspect diamonds to detect characteristic absorption lines, such as those indicative of exposure to high temperatures. Indicative features seen under the microscope include: internal graining (Type IIa); partially healed feathers; a hazy appearance; black cracks surrounding inclusions; and a beaded or frosted girdle. Diamonds treated to remove their color by General Electric are given laser inscriptions on their girdles: these inscriptions read "GE POL", with "POL" standing for Pegasus Overseas Ltd, a partnered firm. It is possible to polish this inscription away, so its absence cannot be a trusted sign of natural color. Although it is permanent, HPHT treatment should be disclosed to the buyer at the time of sale.

See also
Crystallographic defects in diamond
Material properties of diamond
Brown diamonds
Synthetic diamond
Diamond simulants
Diamond color
Diamond clarity
Diamond cut

Footnotes
^ A recent 2004 GIA report on fracture filled diamond turning its color into pink. (Gems and Gemology 2004)
^ Crookes commentary on his experiments in 1904. (1909). Diamonds: chapter dealing with diamond treatments, phosphorescense and irradiation of loose diamonds
[
edit] References
O'Donoghue, Michael, and Joyner, Louise (2003). Identification of gemstones, pp. 28–35. Butterworth-Heinemann, Great Britain.
ISBN 0-7506-5512-7
Read, Peter G. (1999). Gemmology (2nd ed.), pp. 167–170. Butterworth-Heinemann, Great Britain.
ISBN 0-7506-4411-7
Webster, Robert, and Read, Peter G. (Ed.) (2000). Gems: Their sources, descriptions and identification (5th ed.), pp. 683–684, 692–696. Butterworth-Heinemann, Great Britain.
ISBN 0-7506-1674-1
Collins A. T., Connor A., Ly C.-H., Shareef A. and Spear P. M. (2005). High-temperature annealing of optical centers in type-I diamond. J. Appl. Phys. 97 083517 (2005)
doi:10.1063/1.1866501
Retrieved from "
http://en.wikipedia.org/wiki/Diamond_enhancement"
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Ban on Zimbabwean Diamonds Rejected / SA Company Begins Mining


Published: Nov. 5, 2009 at 7:12 PM

WINDHOEK, Namibia, Nov. 5 (UPI) -- Zimbabwe escaped suspension from a diamond-trading group Thursday, though members said the country's mining practices would be closely watched.

About 70 countries participate in the Kimberly Process, aimed at preventing the sale of "blood diamonds" used to fund rebel forces or dictatorships. Sources close to the meeting in Namibia told Voice of America western countries wanted to ban the sale of Zimbabwean diamonds, while most African countries opposed suspension of Zimbabwe.

Human Rights Watch, which campaigned for suspension, and other groups charge that government soldiers killed at least 200 people last year in the Marange diamond field in Zimbabwe.

The Kimberly Process group voted on a phased withdrawal of the military from the Marange field and said diamonds from the field would be examined by a monitor before export. But the group also voted that Zimbabwean diamonds would not be considered "conflict diamonds."
***

South African Company to Begin Mining for Diamonds in Zimbabwe
By Peta Thornycroft 06 November 2009
~
South African company, New Reclamation Group, a private limited company is reportedly planning to form a venture with Zimbabwe to mine diamonds from a deposit that human rights groups say has been the site of military atrocities. This comes as the world's diamond control body called on Zimbabwe to clean up a lawless field, but stopped short of suspending the country from a process meant to keep "blood" gems off the market.
*
South African company New Reclamation says it will begin mining for diamonds in eastern Zimbabwe this month in a joint venture with the state's mining and development corporation.
According to documents obtained by VOA, the company's chairman David Kassel has resigned from his position to take part in the operations to exploit the diamonds.
*
New Reclamation will reportedly manage mining on the diamond deposit through its company Grandwell Holdings Ltd. in partnership with Marange Resources Ltd., a unit of the state-owned Zimbabwe Mining Development Corp.
*
Part of the land the company will use is held in a lease by a British company, African Consolidated Resources. In 2006, the Zimbabwe government seized the land from the British company after gems were found in the deposit. As many as 20,000 illegal miners besieged the area and were later cleared off by the army and police. New York-based Human Rights Watch says more than 200 were killed in the area last year. Zimbabwe's police say they have had no reports of atrocities.
*
Andrew Cranswick, chief executive officer of African Consolidated Resources said the New Reclamation's reported mining plans with the Zimbabwe government set a bad precedent for any future investment in Zimbabwe.
*
"It is detrimental to Zimbabwe's diamond industry which could prove to be the life-saving force for the economy because these diamonds are going to get extremely bad names," he said. "These will effectively be stolen diamonds, and any diamonds coming out of there will be stolen goods. So we have this natural resource plundered and looted in an organized fashion by foreign thugs.
"Zimbabwe, which is trying to recover from a decade-long recession, is trying to attract foreign investment even as a dispute between Mugabe's Zimbabwe African National Union- Patriotic Front and the Movement for Democratic Change threatens to dismantle a coalition government set up in February and deter investors.
*
Cranswick said New Reclamation would be operating on the northern part of its claim through a company registered in Mauritius."We as a company view this extremely seriously and will take full legal recourse through litigation and criminal orders if we can get them in South Africa, Zimbabwe and Mauritius," he added.
*
This week, the Kimberley Process, a global body created to curb trade in gems mined to fund conflict, considered whether to suspend Zimbabwe as a member after a mission visited the Southern African country in May. Investigators found killings and forced evictions from the Marange diamond fields in the east of the country close to the border with Mozambique.
*
Despite the findings, the Kimberley Process panel stopped short of kicking Zimbabwe out. Instead it has adopted a plan - proposed by Zimbabwe itself - which includes calls for an independent inspector to monitor diamonds leaving the controversial fields.
*
According to human rights activists monitoring the situation, most of the stones so far extracted at the diamond fields have been smuggled out of Zimbabwe and sold in Mozambique. Human rights groups also say the diamonds have been an important source of revenue for the military and for President Robert Mugabe's ZANU-PF party.
*
Ian Smillie, one of the architects of the Kimberley Process, says the panel's decision on Zimbabwe was "farcical."
*
He said the Zimbabwe mines ministry has "lied repeatedly" to the the diamond regulatory body
***
Harare escapes censure by diamond organization
NY TIMES NEWS SERVICE, JOHANNESBURG, SOUTH AFRICA Sunday,

An international body charged with stopping the illicit trade in diamonds that fuels conflict will not suspend Zimbabwe, officials said on Friday, though its investigators concluded Zimbabwe’s military had organized smuggling syndicates with the government’s permission and used “extreme violence” against illegal miners.
*
Instead, the countries who are part of the UN-endorsed Kimberley Process said they would send a monitor to decide whether future exports of rough diamonds from the troubled Marange fields in eastern Zimbabwe can be certified as conflict-free.
*
Human rights groups denounced the decision, saying the body had showed it was incapable of stopping gross abuses and the flouting of international standards.
*
Bernhard Esau, the Namibian deputy mining minister who heads the Kimberley Process, said in an interview on Friday that the nations who belong to the body had listened to what Zimbabwe “told us as a Kimberley family” and decided to give the government a chance to come into compliance with international standards under a monitor’s supervision by agreed timelines.
*
“If that time comes, we’ll have to see if those things have been met or not,” he said. “I am hopeful, but I don’t want to be let down. I’m giving them the benefit of the doubt.”
*
The plan agreed to on Thursday calls for private security companies, Zimbabwe’s police force and its mining ministry to secure the fields, while the military withdraws in phases.
*
Zimbabwe’s mining ministry, as well as the police and military forces, are under the control of Zimbabwean President Robert Mugabe and his ZANU-PF party.Zimbabwe’s mining minister, Obert Mpofu, told the Kimberley gathering, held this week in Swakopmund, Namibia, that the situation in the Marange fields was improving.
*
Zimbabwe’s state-run newspaper, The Herald, this week described the effort to stop the trade in Zimbabwe’s diamonds as being led by Western nations and based on “a glut of unsubstantiated claims of human rights abuses.”
*
Critics said the decision demonstrated the ineffectiveness of the process set up to police the international diamond trade.
*
“This failure to act has sent a bad message,” said Annie Dunnebacke of Global Witness, an organization that advocates strict controls on diamond production.
*
“It says if you don’t follow the rules there will be no serious consequences.”
*
Advocates pointed out that the body’s decisions must be made by consensus, which means a single country or small group of countries can block tough action.
*
A suspension of Zimbabwe from the group would have curtailed its diamond sales, depriving Mugabe of a source of patronage for the military, analysts have said.
*
Critics said that under the plan approved for Zimbabwe, its mining ministry has been put in charge of “education of villagers on the dangers of illegal mining.”
*
“The government already did that by killing more than 200 villagers and by beating and setting dogs on hundreds more,” said Ian Smillie, a researcher and advocate who was an architect of the Kimberley Process.
*
Kimberley investigators who visited the country in July found evidence that Zimbabwean security forces had raped, assaulted and set dogs on illegal miners who flocked to the Marange fields.
***


One Million People:

“Our Gifts of Love Should Not Fund Hate”
~
Sometimes the diamond industry is getting heartwarming active support from organizations that otherwise have nothing to do with the business. This afternoon I became aware of Avaaz.org, when I received an e-mail stating, “Our gifts of love should not fund hate.” Avaaz.org is an international civic organization that promotes activism on issues such as climate change, human rights and religious conflicts. Its stated mission is to "ensure that the views and values of the world's people inform global decision-making." The organization operates in thirteen languages, and claims more than three million members worldwide.

Apparently quite upset by Zimbabwe Mining Minister Mines Minister Obert Mpofu’s grotesque, bizarre and aggressive performance at the Kimberley Process Plenary Meeting in Namibia, where he called NGOs and some fellow KP Participants “deranged and requiring psychological examination,” Ricken Patel, executive director of Avaaz immediately prepared a petition to the Kimberley Process chairman, which reads as follows:

“Zimbabwe diamonds are not controlled by Kimberley standards, nor can they be certified as "conflict-free.” We urge you to suspend Zimbabwe and ban its diamond exports until the army pulls out of Marange, violence ends, reports of abuses are investigated and Kimberley standards and controls are upheld. Otherwise the Kimberley Process's credibility will be tarnished and the whole diamond industry will lose.”

Within 24 hours, some 107,000 people from around the world have signed this petition as of 2:24 PM Europe time! The site encourages petition signers to pass the word on to their friends (and whole e-mail address books). According to PAC’s Ian Smillie, in a letter to KP Chairman Bernhard Esau, “the numbers will continue to grow.” Though the current target has been set at 200,000 signatures, at its present rate, it may well reach the one million figure by the time you read this column.

I suggest you visit the Avaaz.org website. It presents its case to the general public around the world in three simple sentences:

Zimbabwe's Robert Mugabe has sent his brutal army to seize control of his country's diamond fields. 200 civilians have been murdered and profits from our wedding rings are used to fuel violent political conflict.

“Official diamond regulators meeting in Namibia this week will decide whether to suspend Zimbabwe and stop Mugabe selling his blood diamonds on the world market.

We have just 24 hours to persuade these countries to act - let's get a massive petition together and deliver it directly to the meeting in Namibia. Sign the petition below and then spread the word to anyone who doesn't want our gifts of love to finance hate.”

The website, aimed at ordinary people around the world, continues to explain that in June, the Kimberley Process Review Mission found evidence that Zimbabwe was not complying with the basic standards of the rough diamond certification scheme. Since 2006, the Zimbabwean police and military have taken control of Marange district and have perpetrated brutal violence against the local population, including murders, beatings, torture and rape.

Evidence has also been found that soldiers and ZANU PF party officials embezzle revenue from the illicit trade. Despite the Kimberley Process calling on the Zimbabwean authorities to demilitarize the Marange diamond fields, end human rights abuses and ensure Kimberley controls and standards are robustly upheld, illicit mining, smuggling and abuse continues.
*
Message to the Diamond Industry Community

As I am writing these words, the KP Plenary hasn’t ended yet – and I am not aware (yet) of any decision on Zimbabwe. In today’s letter to the KP Plenary, Ian Smillie makes a most important observation: “I think this [petition by Avaaz.org] demonstrates the concern that ordinary people have about the importance of the Kimberley Process, about the need to assure the world that diamonds offered to consumers are clean in all possible ways, and of the need for much greater transparency in the Kimberley Process. If people like these believed that the KP was meeting its standards, they would not feel the need to circulate and sign petitions.”

Without further quoting from the website, one paragraph in the petition must give us all food for thought: “As citizens who could buy diamonds, we are looking to you, to take all the necessary steps to suspend Zimbabwe this week so that we can continue to trust in the official certification process in the knowledge that everything is being done to successfully end the trade in conflict diamonds and ensure Kimberley standards and controls are being enforced.”

Within the industry, we all have various misgivings about the way the Kimberley Process Certification System has evolved, we know its significant shortcomings, we are concerned about its politicization and we have various degrees of doubts about its effectiveness.

But today’s petition shows that the outside world, the consumers of diamonds, is acutely aware of the KP. It also underscores that the general public will not tolerate the lack of political will and resolve by KP to do the right thing.
*
KP’s World Wide Visibility seems Considerable

With so many people responding just in a few hours, it is clear that KP enjoys worldwide recognition, public awareness and the actions of the organization have considerable visibility. In all the various scenarios we had toyed around with in respect to the current Namibia KP plenary, we had given a high degree of likelihood to the Zimbabwe issue simply being delivered, as a hot potato, to the next Chair – i.e. Israel. For African nations, it is politically more convenient to let a non-African participant chair a Zimbabwe suspension.
It never occurred to me that rescue may come from Ricken Patel and his Avaaz.org. This isn’t just another NGO. Avaaz's goal is “to help bring the global community closer together, bridging the gap between the world we have and the world that most people everywhere want. Our campaigns have been delivered personally to UN Secretary-General Ban Ki-Moon, EU and AU leaders, and Presidents and Prime Ministers around the world,” writes Patel.

To borrow a phrase from De Beers: They are living up to diamonds! Whatever the outcome of their petition, they deserve our greatest respect, admiration and gratitude. Feel free to join the petition: avaaz.org

THURSDAY, NOVEMBER 5TH, 2009, CHAIM EVEN-ZOHAR

***

" Consumers will increasingly measure the product against where it comes from, who manufactured it, and how. What does the product do for the economies where it is mined? This goes far beyond ethical practices – we are getting into areas of business morality, or, more precisely, the morality of our business " : Chaim Even- Zohar
~

The report to be tabled at a KP meeting that begins in Namibia tomorrow calls for an international ban on Zimbabwe diamonds for six months or until such a time a KP team determines that the country has achieved compliance with the set standards.

Excerpts: Although some aspects of the Zimbabwean system of internal controls and KP compliance do appear to function without concern, the team has identified several areas in which it finds Zimbabwe non-compliant with the minimum requirements of the KPCS.

In addition to the numerous recommendations presented below, the team echoes the findings of a previous KP Review Mission to another participant:

The review mission is mindful of the implications of the findings for both the integrity of the KPCS as well as for Zimbabwe. Clearly, the current state of affairs in [Zimbabwe], in terms of the level of compliance with the KPCS, cannot be allowed to continue.

When a participant fails to fulfill the obligations it has committed itself to and satisfactorily adhere to the minimum requirements for compliance, the objectives of the KPCS are undermined.

Urgent corrective action is required if the integrity and effectiveness of the KPCS are to be preserved . . .Thus, the team believes that these matters should be reviewed as a matter of urgency by the Working Group on Monitoring (WGM) and Participation Committee for necessary action, with respect to individual issues and overall action with respect to the status of Zimbabwe.

The team remains prepared to assist with whatever actions the KP or its subsidiary bodies deem necessary.Although this report has focused almost exclusively on Zimbabwe, the team believes it critical that coordinated action be taken by other KP Participants in the region – particularly South Africa, Namibia, and Botswana – to act against smuggling.

Moreover, these participants boast many best practices and other aspects of their KP compliance systems that Zimbabwe could benefit from understanding and implementing.

For example, the Karas Region in Namibia (Namibia’s diamond producing region) and Northern Western Province in South Africa, jointly collaborate on matters related to illicit diamond trade and share information on a regular basis. This has been a “results-based” system of co-operation, and illicit diamond trade has been rooted out. Namibia and South Africa still conduct joint operations along their common borders.

Further, the team urges KP participants from outside the region whose nationals have been connected to illicit buying and smuggling – the European Community (Belgium), Israel, Lebanon, and the United Arab Emirates – continue to practice “enhanced vigilance,” as previously recommended by the WGM, and focus more resources on preventing the entry of illicit Marange diamonds into their territories.

If necessary, these Participants should undertake diplomatic outreach to Mozambique to pursue the exchange of law enforcement information that Mozambique may have on the illicit operations underway in its territory.

As set forth in the mandate, the team has developed a number of recommendations for further action, addressed to Zimbabwe and to other entities within the KP, as follows:

(Xhead) Government of Zimbabwe

1. Acknowledgement of non-compliance with KP minimum standards. Voluntary self-suspension from rough diamond trading until KP determines that minimum standards have been met. The team notes that the Government of Zimbabwe has positively addressed the first part of this recommendation in its July 14 response but did not discuss voluntary self-suspension.

2. Development of a workplan, in coordination with KPCS, to provide for improved internal controls throughout KPCS compliance system and, in particular, a sustainable and secure production environment at Marange, in line with KP minimum standards. The development and implementation of this work-plan should be undertaken with the involvement of domestic industry and civil society, consistent with the tri-partite nature of the KPCS.The team notes a positive response by the Government of Zimbabwe in its July 14 response to the concepts described in this recommendation but is not aware of further action in this regard.

3. Because of the team’s findings that the presence of ZNA soldiers both participate in illicit diamond trading activities and actually contribute to the general situation of lawlessness in and around Marange, the Government of Zimbabwe should follow-up on its commitment to withdraw military personnel from the area in and around Marange, including Chiadzwa village.

4. Resolution, in accordance with Zimbabwean law, of outstanding ownership disputes and land claims in and around Marange. The local community in Marange area should be formally represented/involved in any decision-making processes regarding future use of the area, including relocation and beneficiation.a. In conjunction with the claims resolution, an education/awareness campaigns is needed to educate local residents about the negative impact that illicit diamond trade can have on the economy. Local residents in and around Marange should be encouraged to resist smuggling and preserve diamonds for local development opportunities, as has largely been the case at Murowa, for example.

5. Immediate implementation of enhanced security measures at Marange and the MMCZ complex.

a. Construction of the fencing around Marange must be completed, and all areas where the fence can be penetrated must be mended. The plan developed by the ZRP for the necessary fencing and equipment measures should be reviewed carefully and implemented, to the extent possible.

b. A more detailed profile system must be introduced in order to prevent suspected illicit diamond traders from entering the diamond areas or from being employed in any diamond mine.

c. At Marange, employees sort diamonds with safety gloves. When Diamonds are manually-sorted, tweezers should be used to pick up the diamonds and scrapers to shift or separate gravel, rather than by bare hands or with safety gloves. Diamond sorters should also not wear long boots.

d. Diamonds at Marange are sorted under an open shade, and one can see the diamond box from a distance. This is a security risk. The sorting area must be sealed off. A diamond register must be introduced where diamonds are sorted, so that the contents of the box may be recorded before it is taken elsewhere. There must be access control into recovery and only authorized persons must enter the recovery. There must be only one single entry point.

e. Method of diamond sorting at Marange is very outdated. There is a possibility that only 60-70% of diamonds are retrieved. There is a need to control access to tailings as they still contain a lot of diamonds.

f. The security officials at Marange observe the sorting of diamonds but appear to be absent when the diamonds are counted and weighed in. Security officials on site must have clear job descriptions. There do not appear to be specific tailings, gravel, or sorting handling procedures.

g. The Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.

h. Once the proper systems are in place at Marange, Zimbabwe may consider development of a well-trained Diamond Detective Branch (undercover agency, similar to one in Namibia and South Africa) to vigorously deal with the illicit diamond trade at Mutare and other border areas. The branch must share information with neighboring states and collaborate in obtaining full information on particular suspects and networks.

6. Study ways to improve recording and quantification of illegal trade in diamonds, i.e. distinguish foreign nationals in the police seizures database.

7. Provision of a full assessment of the total unsold production in order to reconcile production, stockpile, and exports. This must include diamonds subject to judicial process, which the Team was not able to review.

8. Ensure that necessary manual changes to the HTS classification error on pre-printed KPCs are made consistently.

9. As recommended in the 2007 RV report, consideration by the Government of Zimbabwe of revising the current KP compliance structure to create a simplified process that reduces the number of actors involved in the import and export processes.

a. Given the particular needs demanded by the KP, Zimbabwe may consider removing production and administration of diamonds from the MMCZ and ZMDC and instead develop an entirely separate diamond office.

10. Review of previous submissions to the KP concerning Marange for possible revision.

11. Presentation to the KP of relevant information concerning the actions taken against Newman Chiadzwa, as well as a renewed commitment to refrain from retaliation against Newman Chiadzwa or any other individuals with whom the Review team met.

12. Consideration of the appointment of a special rapporteur or other appropriate mechanism to further document the human rights concerns and violence at Marange. The Team notes a positive response by the Government of Zimbabwe in its July 14 response to this concept.

a. Competent authorities should institute an investigation that will further look into the issue of violence against civilian populations emerging from the operations in Marange.

b. The KP Chair should contact the Office of the United Nations High Commissioner for Human Rights and provide a summary of the findings of this report, as well as summaries of interviews/photographic evidence.

c. As stated above, the Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.Kimberley Process/Working Groups/WDC

13. In light of Zimbabwe’s non-compliance with the minimum requirements, the Participation Committee should consider the full range of options set forth in the Interim Measures Guidelines, including suspension of Zimbabwe for a period of at least six months, or until such time as a KP team determines that minimum requirements have been met. If Zimbabwe opts to self-suspend, then the KP should undertake the necessary processes to implement the self-suspension.

14. Facilitation by the KP of the appointment of an independent monitor to assist with the implementation of the work-plan for Marange and overall Zimbabwean KP compliance system. The monitor would assist in the coordination of the request and receipt of technical assistance and support through the KPCS and its participants and observers.

15. Facilitation by the KP of the provision of technical and other assistance, e.g. security cameras, fencing, and other measures, during which time the Government of Zimbabwe implements, as part of its work-plan, a security program that excludes the ZNA, and to the fullest extent possible, the ZRP from responsibilities in and around Marange.

16. Creation of a Regional Task Force, with a structure consistent with the tripartite nature of the KPCS, to provide an on-going mechanism for oversight of the independent monitor, provision of technical assistance, information sharing, and other coordination efforts throughout the region.The Task Force could work directly in conjunction with the independent monitor, or as a mechanism within the KP (e.g., initiative of the KP Chair).

17. Review by WGS of 2009 statistics from the DRC and other regional diamond producing Participants, as well as the EU, UAE, India, Israel, and Lebanon to determine if illicit Marange diamonds have entered the legitimate trade.

18. Development by the WGM of additional measures for “enhanced vigilance” by all KP Participants to ensure that illicit Marange diamonds do not enter legitimate trade. Participants whose nationals have been implicated in the smuggling of Marange diamonds should investigate these claims further and provide detailed results to the WGM.

19. Expedited review and consideration of the revised proposal concerning the provision and administration of security in diamond mining areas.

20. Outreach by the KP and individual participants, as appropriate, to encourage Mozambique to improve border control and consider joining the KP as a means to combat smuggling efforts.

21. The WDC should work with MMCZ to ensure full compliance with and implementation of the System of Warranties.

Additional Reading :

D-day looms for Kimberley Process

De Beers Aggregation Under Threat by Mugabe's Zimbabwean Army Murderers

Zimbabwe recently signed a uranium mining memorandum of agreement with Namibia, one of the world's largest uranium exporters. Zimbabwe, meanwhile, is believed to have uranium reserves worth billions of dollars. Source

*

Kimberley Process Moral Corruption

Zimbabwe Diamonds Still Kill Despite Failing Kimberley Process

Mugabe Wants His Cake & Eats It Too

Blood Diamonds Plugging the Gaps

Chinese Apartheid in Africa

Dubai and Angola Explore Opportunities

Kimberley Process Certification Scheme : The Farce Continues :" The KPCS falls under the management of the DMCC " : Chaim Even-Zohar

The DMCC Special Report

*

UAE and China forge diamond links" In what is being hailed as a “new-age Silk Road”, delegates at the show cited strengthened ties between China and the Middle East in industries far beyond jewellery "

Kimberley Process Failing Part 3

Interview with Ian Smillie : Why He's Ditching the Kimberley Process

Kimberley Process Certification Scheme's Relevancy

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Avaaz.org Petition : STOP MUGABE



One Million People:

“Our Gifts of Love Should Not Fund Hate”
~
Sometimes the diamond industry is getting heartwarming active support from organizations that otherwise have nothing to do with the business. This afternoon I became aware of Avaaz.org, when I received an e-mail stating, “Our gifts of love should not fund hate.” Avaaz.org is an international civic organization that promotes activism on issues such as climate change, human rights and religious conflicts. Its stated mission is to "ensure that the views and values of the world's people inform global decision-making." The organization operates in thirteen languages, and claims more than three million members worldwide.

Apparently quite upset by Zimbabwe Mining Minister Mines Minister Obert Mpofu’s grotesque, bizarre and aggressive performance at the Kimberley Process Plenary Meeting in Namibia, where he called NGOs and some fellow KP Participants “deranged and requiring psychological examination,” Ricken Patel, executive director of Avaaz immediately prepared a petition to the Kimberley Process chairman, which reads as follows:

“Zimbabwe diamonds are not controlled by Kimberley standards, nor can they be certified as "conflict-free.” We urge you to suspend Zimbabwe and ban its diamond exports until the army pulls out of Marange, violence ends, reports of abuses are investigated and Kimberley standards and controls are upheld. Otherwise the Kimberley Process's credibility will be tarnished and the whole diamond industry will lose.”

Within 24 hours, some 107,000 people from around the world have signed this petition as of 2:24 PM Europe time! The site encourages petition signers to pass the word on to their friends (and whole e-mail address books). According to PAC’s Ian Smillie, in a letter to KP Chairman Bernhard Esau, “the numbers will continue to grow.” Though the current target has been set at 200,000 signatures, at its present rate, it may well reach the one million figure by the time you read this column.

I suggest you visit the Avaaz.org website. It presents its case to the general public around the world in three simple sentences:

Zimbabwe's Robert Mugabe has sent his brutal army to seize control of his country's diamond fields. 200 civilians have been murdered and profits from our wedding rings are used to fuel violent political conflict.

“Official diamond regulators meeting in Namibia this week will decide whether to suspend Zimbabwe and stop Mugabe selling his blood diamonds on the world market.

We have just 24 hours to persuade these countries to act - let's get a massive petition together and deliver it directly to the meeting in Namibia. Sign the petition below and then spread the word to anyone who doesn't want our gifts of love to finance hate.”

The website, aimed at ordinary people around the world, continues to explain that in June, the Kimberley Process Review Mission found evidence that Zimbabwe was not complying with the basic standards of the rough diamond certification scheme. Since 2006, the Zimbabwean police and military have taken control of Marange district and have perpetrated brutal violence against the local population, including murders, beatings, torture and rape.

Evidence has also been found that soldiers and ZANU PF party officials embezzle revenue from the illicit trade. Despite the Kimberley Process calling on the Zimbabwean authorities to demilitarize the Marange diamond fields, end human rights abuses and ensure Kimberley controls and standards are robustly upheld, illicit mining, smuggling and abuse continues.
Message to the Diamond Industry Community

As I am writing these words, the KP Plenary hasn’t ended yet – and I am not aware (yet) of any decision on Zimbabwe. In today’s letter to the KP Plenary, Ian Smillie makes a most important observation: “I think this [petition by Avaaz.org] demonstrates the concern that ordinary people have about the importance of the Kimberley Process, about the need to assure the world that diamonds offered to consumers are clean in all possible ways, and of the need for much greater transparency in the Kimberley Process. If people like these believed that the KP was meeting its standards, they would not feel the need to circulate and sign petitions.”

Without further quoting from the website, one paragraph in the petition must give us all food for thought: “As citizens who could buy diamonds, we are looking to you, to take all the necessary steps to suspend Zimbabwe this week so that we can continue to trust in the official certification process in the knowledge that everything is being done to successfully end the trade in conflict diamonds and ensure Kimberley standards and controls are being enforced.”

Within the industry, we all have various misgivings about the way the Kimberley Process Certification System has evolved, we know its significant shortcomings, we are concerned about its politicization and we have various degrees of doubts about its effectiveness.

But today’s petition shows that the outside world, the consumers of diamonds, is acutely aware of the KP. It also underscores that the general public will not tolerate the lack of political will and resolve by KP to do the right thing.
*
KP’s World Wide Visibility seems Considerable

With so many people responding just in a few hours, it is clear that KP enjoys worldwide recognition, public awareness and the actions of the organization have considerable visibility. In all the various scenarios we had toyed around with in respect to the current Namibia KP plenary, we had given a high degree of likelihood to the Zimbabwe issue simply being delivered, as a hot potato, to the next Chair – i.e. Israel. For African nations, it is politically more convenient to let a non-African participant chair a Zimbabwe suspension.

It never occurred to me that rescue may come from Ricken Patel and his Avaaz.org. This isn’t just another NGO. Avaaz's goal is “to help bring the global community closer together, bridging the gap between the world we have and the world that most people everywhere want. Our campaigns have been delivered personally to UN Secretary-General Ban Ki-Moon, EU and AU leaders, and Presidents and Prime Ministers around the world,” writes Patel.

To borrow a phrase from De Beers: They are living up to diamonds! Whatever the outcome of their petition, they deserve our greatest respect, admiration and gratitude. Feel free to join the petition: avaaz.org

THURSDAY, NOVEMBER 5TH, 2009, CHAIM EVEN-ZOHAR

***

" Consumers will increasingly measure the product against where it comes from, who manufactured it, and how. What does the product do for the economies where it is mined? This goes far beyond ethical practices – we are getting into areas of business morality, or, more precisely, the morality of our business " : Chaim Even- Zohar
~


The report to be tabled at a KP meeting that begins in Namibia tomorrow calls for an international ban on Zimbabwe diamonds for six months or until such a time a KP team determines that the country has achieved compliance with the set standards.

Excerpts: Although some aspects of the Zimbabwean system of internal controls and KP compliance do appear to function without concern, the team has identified several areas in which it finds Zimbabwe non-compliant with the minimum requirements of the KPCS.

In addition to the numerous recommendations presented below, the team echoes the findings of a previous KP Review Mission to another participant:

The review mission is mindful of the implications of the findings for both the integrity of the KPCS as well as for Zimbabwe. Clearly, the current state of affairs in [Zimbabwe], in terms of the level of compliance with the KPCS, cannot be allowed to continue.

When a participant fails to fulfill the obligations it has committed itself to and satisfactorily adhere to the minimum requirements for compliance, the objectives of the KPCS are undermined.

Urgent corrective action is required if the integrity and effectiveness of the KPCS are to be preserved . . .Thus, the team believes that these matters should be reviewed as a matter of urgency by the Working Group on Monitoring (WGM) and Participation Committee for necessary action, with respect to individual issues and overall action with respect to the status of Zimbabwe.

The team remains prepared to assist with whatever actions the KP or its subsidiary bodies deem necessary.Although this report has focused almost exclusively on Zimbabwe, the team believes it critical that coordinated action be taken by other KP Participants in the region – particularly South Africa, Namibia, and Botswana – to act against smuggling.

Moreover, these participants boast many best practices and other aspects of their KP compliance systems that Zimbabwe could benefit from understanding and implementing.

For example, the Karas Region in Namibia (Namibia’s diamond producing region) and Northern Western Province in South Africa, jointly collaborate on matters related to illicit diamond trade and share information on a regular basis. This has been a “results-based” system of co-operation, and illicit diamond trade has been rooted out. Namibia and South Africa still conduct joint operations along their common borders.

Further, the team urges KP participants from outside the region whose nationals have been connected to illicit buying and smuggling – the European Community (Belgium), Israel, Lebanon, and the United Arab Emirates – continue to practice “enhanced vigilance,” as previously recommended by the WGM, and focus more resources on preventing the entry of illicit Marange diamonds into their territories.

If necessary, these Participants should undertake diplomatic outreach to Mozambique to pursue the exchange of law enforcement information that Mozambique may have on the illicit operations underway in its territory.

As set forth in the mandate, the team has developed a number of recommendations for further action, addressed to Zimbabwe and to other entities within the KP, as follows:

(Xhead) Government of Zimbabwe

1. Acknowledgement of non-compliance with KP minimum standards. Voluntary self-suspension from rough diamond trading until KP determines that minimum standards have been met. The team notes that the Government of Zimbabwe has positively addressed the first part of this recommendation in its July 14 response but did not discuss voluntary self-suspension.

2. Development of a workplan, in coordination with KPCS, to provide for improved internal controls throughout KPCS compliance system and, in particular, a sustainable and secure production environment at Marange, in line with KP minimum standards. The development and implementation of this work-plan should be undertaken with the involvement of domestic industry and civil society, consistent with the tri-partite nature of the KPCS.The team notes a positive response by the Government of Zimbabwe in its July 14 response to the concepts described in this recommendation but is not aware of further action in this regard.

3. Because of the team’s findings that the presence of ZNA soldiers both participate in illicit diamond trading activities and actually contribute to the general situation of lawlessness in and around Marange, the Government of Zimbabwe should follow-up on its commitment to withdraw military personnel from the area in and around Marange, including Chiadzwa village.

4. Resolution, in accordance with Zimbabwean law, of outstanding ownership disputes and land claims in and around Marange. The local community in Marange area should be formally represented/involved in any decision-making processes regarding future use of the area, including relocation and beneficiation.a. In conjunction with the claims resolution, an education/awareness campaigns is needed to educate local residents about the negative impact that illicit diamond trade can have on the economy. Local residents in and around Marange should be encouraged to resist smuggling and preserve diamonds for local development opportunities, as has largely been the case at Murowa, for example.

5. Immediate implementation of enhanced security measures at Marange and the MMCZ complex.

a. Construction of the fencing around Marange must be completed, and all areas where the fence can be penetrated must be mended. The plan developed by the ZRP for the necessary fencing and equipment measures should be reviewed carefully and implemented, to the extent possible.

b. A more detailed profile system must be introduced in order to prevent suspected illicit diamond traders from entering the diamond areas or from being employed in any diamond mine.

c. At Marange, employees sort diamonds with safety gloves. When Diamonds are manually-sorted, tweezers should be used to pick up the diamonds and scrapers to shift or separate gravel, rather than by bare hands or with safety gloves. Diamond sorters should also not wear long boots.

d. Diamonds at Marange are sorted under an open shade, and one can see the diamond box from a distance. This is a security risk. The sorting area must be sealed off. A diamond register must be introduced where diamonds are sorted, so that the contents of the box may be recorded before it is taken elsewhere. There must be access control into recovery and only authorized persons must enter the recovery. There must be only one single entry point.

e. Method of diamond sorting at Marange is very outdated. There is a possibility that only 60-70% of diamonds are retrieved. There is a need to control access to tailings as they still contain a lot of diamonds.

f. The security officials at Marange observe the sorting of diamonds but appear to be absent when the diamonds are counted and weighed in. Security officials on site must have clear job descriptions. There do not appear to be specific tailings, gravel, or sorting handling procedures.

g. The Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.

h. Once the proper systems are in place at Marange, Zimbabwe may consider development of a well-trained Diamond Detective Branch (undercover agency, similar to one in Namibia and South Africa) to vigorously deal with the illicit diamond trade at Mutare and other border areas. The branch must share information with neighboring states and collaborate in obtaining full information on particular suspects and networks.

6. Study ways to improve recording and quantification of illegal trade in diamonds, i.e. distinguish foreign nationals in the police seizures database.

7. Provision of a full assessment of the total unsold production in order to reconcile production, stockpile, and exports. This must include diamonds subject to judicial process, which the Team was not able to review.

8. Ensure that necessary manual changes to the HTS classification error on pre-printed KPCs are made consistently.

9. As recommended in the 2007 RV report, consideration by the Government of Zimbabwe of revising the current KP compliance structure to create a simplified process that reduces the number of actors involved in the import and export processes.

a. Given the particular needs demanded by the KP, Zimbabwe may consider removing production and administration of diamonds from the MMCZ and ZMDC and instead develop an entirely separate diamond office.

10. Review of previous submissions to the KP concerning Marange for possible revision.

11. Presentation to the KP of relevant information concerning the actions taken against Newman Chiadzwa, as well as a renewed commitment to refrain from retaliation against Newman Chiadzwa or any other individuals with whom the Review team met.

12. Consideration of the appointment of a special rapporteur or other appropriate mechanism to further document the human rights concerns and violence at Marange. The Team notes a positive response by the Government of Zimbabwe in its July 14 response to this concept.

a. Competent authorities should institute an investigation that will further look into the issue of violence against civilian populations emerging from the operations in Marange.

b. The KP Chair should contact the Office of the United Nations High Commissioner for Human Rights and provide a summary of the findings of this report, as well as summaries of interviews/photographic evidence.

c. As stated above, the Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.Kimberley Process/Working Groups/WDC

13. In light of Zimbabwe’s non-compliance with the minimum requirements, the Participation Committee should consider the full range of options set forth in the Interim Measures Guidelines, including suspension of Zimbabwe for a period of at least six months, or until such time as a KP team determines that minimum requirements have been met. If Zimbabwe opts to self-suspend, then the KP should undertake the necessary processes to implement the self-suspension.

14. Facilitation by the KP of the appointment of an independent monitor to assist with the implementation of the work-plan for Marange and overall Zimbabwean KP compliance system. The monitor would assist in the coordination of the request and receipt of technical assistance and support through the KPCS and its participants and observers.

15. Facilitation by the KP of the provision of technical and other assistance, e.g. security cameras, fencing, and other measures, during which time the Government of Zimbabwe implements, as part of its work-plan, a security program that excludes the ZNA, and to the fullest extent possible, the ZRP from responsibilities in and around Marange.

16. Creation of a Regional Task Force, with a structure consistent with the tripartite nature of the KPCS, to provide an on-going mechanism for oversight of the independent monitor, provision of technical assistance, information sharing, and other coordination efforts throughout the region.The Task Force could work directly in conjunction with the independent monitor, or as a mechanism within the KP (e.g., initiative of the KP Chair).

17. Review by WGS of 2009 statistics from the DRC and other regional diamond producing Participants, as well as the EU, UAE, India, Israel, and Lebanon to determine if illicit Marange diamonds have entered the legitimate trade.

18. Development by the WGM of additional measures for “enhanced vigilance” by all KP Participants to ensure that illicit Marange diamonds do not enter legitimate trade. Participants whose nationals have been implicated in the smuggling of Marange diamonds should investigate these claims further and provide detailed results to the WGM.

19. Expedited review and consideration of the revised proposal concerning the provision and administration of security in diamond mining areas.

20. Outreach by the KP and individual participants, as appropriate, to encourage Mozambique to improve border control and consider joining the KP as a means to combat smuggling efforts.

21. The WDC should work with MMCZ to ensure full compliance with and implementation of the System of Warranties.

Additional Reading :

D-day looms for Kimberley Process

De Beers Aggregation Under Threat by Mugabe's Zimbabwean Army Murderers

Zimbabwe recently signed a uranium mining memorandum of agreement with Namibia, one of the world's largest uranium exporters. Zimbabwe, meanwhile, is believed to have uranium reserves worth billions of dollars. Source

*

Kimberley Process Moral Corruption

Zimbabwe Diamonds Still Kill Despite Failing Kimberley Process

Mugabe Wants His Cake & Eats It Too

Blood Diamonds Plugging the Gaps

Chinese Apartheid in Africa

Dubai and Angola Explore Opportunities

Kimberley Process Certification Scheme : The Farce Continues :" The KPCS falls under the management of the DMCC " : Chaim Even-Zohar

The DMCC Special Report

*

UAE and China forge diamond links" In what is being hailed as a “new-age Silk Road”, delegates at the show cited strengthened ties between China and the Middle East in industries far beyond jewellery "

Kimberley Process Failing Part 3

Interview with Ian Smillie:

Why He's Ditching the Kimberley Process

Kimberley Process Certification Scheme's Relevancy

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Diamond Imports
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Fair Trade Diamonds
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http://www.diamondimports.com.au/
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Genuinely Independent Certified Diamonds
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You will not see our diamonds on any other website

Thursday, November 5, 2009

Fluorescence in HPHT Type I Diamonds

“Fluorescence Cage”:
Visual Identification of HPHT-Treated Type I Diamonds
Inga A. Dobrinets and Alexander M. Zaitsev

HPHT-treated type I diamonds of various colors may exhibit unusually intense fluorescence at the facet edges and junctions.
This effect, here named the “fluorescence cage,” is observed with a fluorescence microscope as a luminous network on the diamond’s surface.
It was not observed in untreated diamonds or colorless type IIa HPHT-treated diamonds. This fluorescence pattern is believed to result from a high concentration of HPHT-induced optical centers, which remain on facet edges after repolishing. Source GIA Fall 2009

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Superior Quality Certified Diamonds
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RBC 661 Round Brilliant 0.35 carat D VS2 Ex Ex Ex
4.59 min-4.61 max x 2.76 mm
GIA Cold Laser Inscribed #2106560475 AUD$1,397.00 GST Inclusive
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PRI 355 Princess Cut 1.30 carat E VVS1 Ex Ex
6.05 x 5.90 x 4.33 mm
GIA Cold Laser Inscribed #5106502726 AUD$15,730.00 GST Inclusive
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PRI 356 Princess Cut 1.40 carat F IF Ex VG
6.29 x 6.21 x 4.45 mm
GIA Cold Laser Inscribed #1109502745 AUD$18,524.00 GST Inclusive
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PRI 357 Princess Cut 1.46 carat E VVS2 Ex Ex
6.36 x 6.32 x 4.43 mm
GIA Cold Laser Inscribed #5106502750 AUD$17,006.00 GST Inclusive
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PRI 358 Princess Cut 0.50 carat D VVS2 Ex VG
4.54 x 4.46 x 3.05 mm
GIA Cold Laser Inscribed #1109535115 AUD$3,146.00 GST Inclusive
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PRI 359 Princess Cut 0.57 carat F VS2 Ex Ex
4.68 x 4.68 x 3.24 mm
GIA Cold Laser Inscribed #2106580158 AUD$2,233.00 GST Inclusive
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PRI 360 Princess Cut 0.46 carat F VS2 Ex Ex
4.37 x 4.29 x 2.95 mm
GIA Cold Laser Inscribed #1109554218 AUD$1,628.00 GST Inclusive
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PRI 361 Princess Cut 0.46 carat G VS2 Ex VG
4.43 x 4.35 x 2.91 mm
GIA Cold Laser Inscribed #1109544336 AUD$1,485.00 GST Inclusive
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PRI 362 Princess Cut 0.46 carat E SI1 VG VG
4.37 x 4.30 x 3.00 mm
GIA Cold Laser Inscribed # 1109553277 AUD$1,419.00 GST Inclusive
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FS 516 Cushion Brilliant 2.00 carats Fancy Vivid Yellow VVS1
Excellent polish Very Good symmetry
GIA cold laser incribed #2115126791 AUD$66,715.00 GST Inclusive
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FS 517 Cushion Brilliant 1.62 carats Fancy Intense Yellow IF
Excellent polish Very Good symmetry
GIA cold laser inscribed #1112153275 AUD$39,479.00 GST Inclusive


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FS 518 Pair Cushion Brilliant 1.34 carats Fancy Yellow VS2

Excellent polish Good symmetry

GIA cold laser inscribed #1112153276 AUD$14,597.00 GST Inclusive


FS 519 Pair Cushion Brilliant 1.33 carats Fancy Yellow VS2

Excellent polish Good symmetry


GIA cold laser inscribed #2115153290 AUD$14,487.00 GST Inclusive

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FS 521 Radiant Brilliant 0.29 carats Fancy Yellow IF

Excellent polish Very Good symmetry
GIA cold laser inscribed #5111153926 AUD$1,276.00 GST Inclusive

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PRI 354 Princess Brilliant 1.40 carats I VS2

Excellent polish Very Good symmetry

GIA cold laser inscribed #5106510701 AUD$9,867.00 GST Inclusive
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FS 520 Cushion Brilliant 0.91 carats D VS1
Excellent polish Very Good symmetry
GIA cold laser inscribed #1109547630 AUD$7,073.00 GST Inclusive
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RBC 657 Round Brilliant 0.72 carats H VS2 Ex Ex Ex

GIA cold laser inscribed #5106498214 AUD$3,410.00 GST Inclusive
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RBC 658 Round Brilliant 0.81 carats H SI1 Ex Ex Ex
GIA cold laser inscribed # 5106496969 AUD$4,609 GST Inclusive
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RBC 659 Round Brilliant 0.86 carats I SI1 Ex Ex Ex
GIA cold laser inscribed # 5106496940 AUD$4,455.00 GST Inclusive
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RBC 660 Round Brilliant 0.39 carats D VVS1 Ex Ex VG
GIA cold laser inscribed # 2111038259 AUD$2,420.00 GST Inclusive
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Prices are subject to change without notice


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All Our Diamonds Are In Stock


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Israel Leaders of Business Innovation Video

Very interesting points on the difference between Israeli and American young people.

The same could be said for young Australians who spend more time drinking.

Dan Senor, co-author of 'Start-up Nation: The Story of Israel's Economic Miracle,' discusses with CNBC how Israel has managed to become a leader in business innovation.





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Tuesday, November 3, 2009

Cole Porter's " Tutti-Frutti " Bracelet


Photos N. Welsh, Collection Cartier, copyright Cartier
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Cartier Paris, 1925 Platinum, diamonds, sapphires and rubies cut into the form of leaves, emeralds, onyx, black enamel. 19.5 x 3.8 cm
Geneva, Collection Cartier, Inventory no BT 110 A25

This bracelet was of the type that was created for the Paris Exhibition in 1925. Linda Lee Thomas (1883-1954), rich divorcee, married the famous American author-composer Cole Porter in 1919.
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Although Cole Porter was homosexual, the couple remained married until their deaths. Considered one of the most beautiful women in the world, Mrs. Porter was an ardent admirer of the Tutti Frutti style of the House of Cartier.
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The Tutti Frutti gem: The initial contact between Cartier and the Indian civilisation dates from 1901. At the time when Great Britain is in mourning after the passing away of Queen Victoria, the new Queen Alexandra will inherit numerous Indian jewels from her mother-in-law, jewellery that was presented to her by Indian princes. It essentially pertains here to heavy male gemstones that will eventually be adapted by Cartier on instruction from Princess Alexandra.
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This way, Cartier was able to study and analyse first-hand how Indian jewellery was fashioned. During the same period, the Indian princes would visit Europe to commission majestic forms of parures. The maharajas of Cooch-Behar, Baroda, Patiala, will ignore the religious taboos that forbid their crossing the seas. They have their parures adapted to fit the fashions of the day.
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The new jewellery sets of these maharajas still maintain the Indian traditional style but their mountings will be strongly lightened and their gemstones polished anew and given a revived brilliance. Cartier takes his inspiration from Indian techniques and re-introduces motifs such as the palmette of Cashmir, stones cut to create new parures.
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The jewel « tutti frutti » is created by inserting precious stones of various hues into the Art Deco gems. Source

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Genuinely Independent Certified Diamonds
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Our Diamonds are exclusive to www.DiamondImports.com.au
You will not see our diamonds on any other website

Monday, November 2, 2009

Zimbabwe Diamonds : Kimberley Process Final Report

" Consumers will increasingly measure the product against where it comes from, who manufactured it, and how. What does the product do for the economies where it is mined? This goes far beyond ethical practices – we are getting into areas of business morality, or, more precisely, the morality of our business " : Chaim Even- Zohar

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The report to be tabled at a KP meeting that begins in Namibia tomorrow calls for an international ban on Zimbabwe diamonds for six months or until such a time a KP team determines that the country has achieved compliance with the set standards.

Excerpts: Although some aspects of the Zimbabwean system of internal controls and KP compliance do appear to function without concern, the team has identified several areas in which it finds Zimbabwe non-compliant with the minimum requirements of the KPCS.

In addition to the numerous recommendations presented below, the team echoes the findings of a previous KP Review Mission to another participant:

The review mission is mindful of the implications of the findings for both the integrity of the KPCS as well as for Zimbabwe. Clearly, the current state of affairs in [Zimbabwe], in terms of the level of compliance with the KPCS, cannot be allowed to continue.

When a participant fails to fulfill the obligations it has committed itself to and satisfactorily adhere to the minimum requirements for compliance, the objectives of the KPCS are undermined.

Urgent corrective action is required if the integrity and effectiveness of the KPCS are to be preserved . . .Thus, the team believes that these matters should be reviewed as a matter of urgency by the Working Group on Monitoring (WGM) and Participation Committee for necessary action, with respect to individual issues and overall action with respect to the status of Zimbabwe.

The team remains prepared to assist with whatever actions the KP or its subsidiary bodies deem necessary.Although this report has focused almost exclusively on Zimbabwe, the team believes it critical that coordinated action be taken by other KP Participants in the region – particularly South Africa, Namibia, and Botswana – to act against smuggling.

Moreover, these participants boast many best practices and other aspects of their KP compliance systems that Zimbabwe could benefit from understanding and implementing.

For example, the Karas Region in Namibia (Namibia’s diamond producing region) and Northern Western Province in South Africa, jointly collaborate on matters related to illicit diamond trade and share information on a regular basis. This has been a “results-based” system of co-operation, and illicit diamond trade has been rooted out. Namibia and South Africa still conduct joint operations along their common borders.

Further, the team urges KP participants from outside the region whose nationals have been connected to illicit buying and smuggling – the European Community (Belgium), Israel, Lebanon, and the United Arab Emirates – continue to practice “enhanced vigilance,” as previously recommended by the WGM, and focus more resources on preventing the entry of illicit Marange diamonds into their territories.

If necessary, these Participants should undertake diplomatic outreach to Mozambique to pursue the exchange of law enforcement information that Mozambique may have on the illicit operations underway in its territory.

As set forth in the mandate, the team has developed a number of recommendations for further action, addressed to Zimbabwe and to other entities within the KP, as follows:

(Xhead) Government of Zimbabwe

1. Acknowledgement of non-compliance with KP minimum standards. Voluntary self-suspension from rough diamond trading until KP determines that minimum standards have been met. The team notes that the Government of Zimbabwe has positively addressed the first part of this recommendation in its July 14 response but did not discuss voluntary self-suspension.

2. Development of a workplan, in coordination with KPCS, to provide for improved internal controls throughout KPCS compliance system and, in particular, a sustainable and secure production environment at Marange, in line with KP minimum standards. The development and implementation of this work-plan should be undertaken with the involvement of domestic industry and civil society, consistent with the tri-partite nature of the KPCS.The team notes a positive response by the Government of Zimbabwe in its July 14 response to the concepts described in this recommendation but is not aware of further action in this regard.

3. Because of the team’s findings that the presence of ZNA soldiers both participate in illicit diamond trading activities and actually contribute to the general situation of lawlessness in and around Marange, the Government of Zimbabwe should follow-up on its commitment to withdraw military personnel from the area in and around Marange, including Chiadzwa village.

4. Resolution, in accordance with Zimbabwean law, of outstanding ownership disputes and land claims in and around Marange. The local community in Marange area should be formally represented/involved in any decision-making processes regarding future use of the area, including relocation and beneficiation.a. In conjunction with the claims resolution, an education/awareness campaigns is needed to educate local residents about the negative impact that illicit diamond trade can have on the economy. Local residents in and around Marange should be encouraged to resist smuggling and preserve diamonds for local development opportunities, as has largely been the case at Murowa, for example.

5. Immediate implementation of enhanced security measures at Marange and the MMCZ complex.

a. Construction of the fencing around Marange must be completed, and all areas where the fence can be penetrated must be mended. The plan developed by the ZRP for the necessary fencing and equipment measures should be reviewed carefully and implemented, to the extent possible.

b. A more detailed profile system must be introduced in order to prevent suspected illicit diamond traders from entering the diamond areas or from being employed in any diamond mine.

c. At Marange, employees sort diamonds with safety gloves. When Diamonds are manually-sorted, tweezers should be used to pick up the diamonds and scrapers to shift or separate gravel, rather than by bare hands or with safety gloves. Diamond sorters should also not wear long boots.

d. Diamonds at Marange are sorted under an open shade, and one can see the diamond box from a distance. This is a security risk. The sorting area must be sealed off. A diamond register must be introduced where diamonds are sorted, so that the contents of the box may be recorded before it is taken elsewhere. There must be access control into recovery and only authorized persons must enter the recovery. There must be only one single entry point.

e. Method of diamond sorting at Marange is very outdated. There is a possibility that only 60-70% of diamonds are retrieved. There is a need to control access to tailings as they still contain a lot of diamonds.

f. The security officials at Marange observe the sorting of diamonds but appear to be absent when the diamonds are counted and weighed in. Security officials on site must have clear job descriptions. There do not appear to be specific tailings, gravel, or sorting handling procedures.

g. The Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.

h. Once the proper systems are in place at Marange, Zimbabwe may consider development of a well-trained Diamond Detective Branch (undercover agency, similar to one in Namibia and South Africa) to vigorously deal with the illicit diamond trade at Mutare and other border areas. The branch must share information with neighboring states and collaborate in obtaining full information on particular suspects and networks.

6. Study ways to improve recording and quantification of illegal trade in diamonds, i.e. distinguish foreign nationals in the police seizures database.

7. Provision of a full assessment of the total unsold production in order to reconcile production, stockpile, and exports. This must include diamonds subject to judicial process, which the Team was not able to review.

8. Ensure that necessary manual changes to the HTS classification error on pre-printed KPCs are made consistently.

9. As recommended in the 2007 RV report, consideration by the Government of Zimbabwe of revising the current KP compliance structure to create a simplified process that reduces the number of actors involved in the import and export processes.

a. Given the particular needs demanded by the KP, Zimbabwe may consider removing production and administration of diamonds from the MMCZ and ZMDC and instead develop an entirely separate diamond office.

10. Review of previous submissions to the KP concerning Marange for possible revision.

11. Presentation to the KP of relevant information concerning the actions taken against Newman Chiadzwa, as well as a renewed commitment to refrain from retaliation against Newman Chiadzwa or any other individuals with whom the Review team met.

12. Consideration of the appointment of a special rapporteur or other appropriate mechanism to further document the human rights concerns and violence at Marange. The Team notes a positive response by the Government of Zimbabwe in its July 14 response to this concept.

a. Competent authorities should institute an investigation that will further look into the issue of violence against civilian populations emerging from the operations in Marange.

b. The KP Chair should contact the Office of the United Nations High Commissioner for Human Rights and provide a summary of the findings of this report, as well as summaries of interviews/photographic evidence.

c. As stated above, the Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.Kimberley Process/Working Groups/WDC

13. In light of Zimbabwe’s non-compliance with the minimum requirements, the Participation Committee should consider the full range of options set forth in the Interim Measures Guidelines, including suspension of Zimbabwe for a period of at least six months, or until such time as a KP team determines that minimum requirements have been met. If Zimbabwe opts to self-suspend, then the KP should undertake the necessary processes to implement the self-suspension.


14. Facilitation by the KP of the appointment of an independent monitor to assist with the implementation of the work-plan for Marange and overall Zimbabwean KP compliance system. The monitor would assist in the coordination of the request and receipt of technical assistance and support through the KPCS and its participants and observers.

15. Facilitation by the KP of the provision of technical and other assistance, e.g. security cameras, fencing, and other measures, during which time the Government of Zimbabwe implements, as part of its work-plan, a security program that excludes the ZNA, and to the fullest extent possible, the ZRP from responsibilities in and around Marange.

16. Creation of a Regional Task Force, with a structure consistent with the tripartite nature of the KPCS, to provide an on-going mechanism for oversight of the independent monitor, provision of technical assistance, information sharing, and other coordination efforts throughout the region.The Task Force could work directly in conjunction with the independent monitor, or as a mechanism within the KP (e.g., initiative of the KP Chair).

17. Review by WGS of 2009 statistics from the DRC and other regional diamond producing Participants, as well as the EU, UAE, India, Israel, and Lebanon to determine if illicit Marange diamonds have entered the legitimate trade.

18. Development by the WGM of additional measures for “enhanced vigilance” by all KP Participants to ensure that illicit Marange diamonds do not enter legitimate trade. Participants whose nationals have been implicated in the smuggling of Marange diamonds should investigate these claims further and provide detailed results to the WGM.

19. Expedited review and consideration of the revised proposal concerning the provision and administration of security in diamond mining areas.

20. Outreach by the KP and individual participants, as appropriate, to encourage Mozambique to improve border control and consider joining the KP as a means to combat smuggling efforts.

21. The WDC should work with MMCZ to ensure full compliance with and implementation of the System of Warranties.

Additional Reading :

D-day looms for Kimberley Process

De Beers Aggregation Under Threat by Mugabe's Zimbabwean Army Murderers

Zimbabwe recently signed a uranium mining memorandum of agreement with Namibia, one of the world's largest uranium exporters. Zimbabwe, meanwhile, is believed to have uranium reserves worth billions of dollars. Source

*

Kimberley Process Moral Corruption


Zimbabwe Diamonds Still Kill Despite Failing Kimberley Process


Mugabe Wants His Cake & Eats It Too


Blood Diamonds Plugging the Gaps


Chinese Apartheid in Africa


Dubai and Angola Explore Opportunities


Kimberley Process Certification Scheme : The Farce Continues :" The KPCS falls under the management of the DMCC " : Chaim Even-Zohar


The
DMCC Special Report

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UAE and China forge diamond links" In what is being hailed as a “new-age Silk Road”, delegates at the show cited strengthened ties between China and the Middle East in industries far beyond jewellery "


Kimberley Process Failing Part 3


Interview with Ian Smillie:

Why He's Ditching the Kimberley Process


Kimberley Process Certification Scheme's Relevancy

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Diamond Imports
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Fair Trade Diamonds
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http://www.diamondimports.com.au/
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Genuinely Independent Certified Diamonds
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Our Diamonds are exclusive to www.DiamondImports.com.au
You will not see our diamonds on any other website

De Beers Aggregation Under Threat by Mugabe's Zimbabwean Army Murderers

Diamond Sorting House Botswana
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De Beers Aggregation Under Threat
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Other nations as possibly being out of compliance with sanctions are Guinea, Liberia, Lebanon and the United Arab Emirates.
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Botswana caught in Zim blood diamonds crossfire
01.11.2009 11:12:49 A
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Botswana may be caught in the crossfire of plans by the Kimberly Process to suspend Zimbabwe from the world diamond market.
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Zimbabwe is likely to be banned from the world diamond market because of human rights violations and other irregularities at the country's notorious Chiadzwa Diamond Fields in Zimbabwe’s Marange district, it emerged on Thursday.
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The ban has been recommended by a Kimberley Process (KP) review mission, which visited the country in July and which has just released its final report on the state of diamond mining in Zimbabwe. The mission has called for a temporary ban of six months or more to allow Zimbabwe time to comply with KP standards.
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It also recommended that the KP undertake necessary processes to implement a self-suspension, should the country opt to suspend itself from the KP, because Harare could not be trusted to implement recommendations without supervision.
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Zimonline, which carried the full text of the report on the planned ban, stated that Southern Africa’s main diamond producers, Botswana, Namibia and South Africa may find their otherwise excellent reputation undermined if they continue to be a destination for diamonds from Marange.
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The report by the Kimberly Process review mission also suggested that other KP participants in the region, particularly Botswana, South Africa and Namibia, should take coordinated action to act against smuggling.
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At the time of going to press, it was not clear if recommendations that Botswana should beef up its security against possible smuggling would affect plans to relocate the aggregation of De Beers diamonds from London to Gaborone.
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The relocation from London to Gaborone was set back by the collapse of the diamond market amidst the global economic meltdown.
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Aggregation is the process where diamonds from all De Beers mines in Namibia, Botswana, South Africa and Canada are matched.
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The process is currently being done at the Diamond Trading Company (DTC) in London. De Beers CEO in Botswana, Sheila Khama, told the media recently that there are possibilities that aggregation could be relocated to DTC Botswana next year, but said it depended on whether all outstanding issues have been resolved.
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She said one of the requirements for a successful relocation is good security, adding that it is important to have safe channels for the physical movement of diamonds. Ms Khama also noted that a secured transfer facility is currently under construction.
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Mugabe faces losing gem lifeline - Kimberley Process Under Pressure
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Zimbabwe's violence and human rights abuses at a notorious mine may see the Kimberley Process watchdog cut it off from the regulated diamond trade

Ian Evans in Cape Town
guardian.co.uk, Sunday 1 November 2009

Zimbabwe's diamond industry will be under the spotlight in Namibia tomorrow as more evidence emerges of the murder and violence surrounding President Robert Mugabe's control of the sector.

Members of the international diamond watchdog, the Kimberley Process Certification Scheme (KPCS), will consider suspending Zimbabwe for at least six months at a four-day meeting after a working party investigated the Chiadzwa fields in the east of the country.

A suspension would in effect stop the Zimbabwean government importing and exporting rough diamonds. However, the scheme is voluntary and the Zimbabwean authorities would be required to enforce it – the same authorities that are said to be heavily involved in illegal smuggling and violence at the mines.

Perhaps more importantly, a suspension would also put the onus on reputable traders and governments not to buy Zimbabwean diamonds, which dealers can easily identify by their coarse, pebble-like appearance. Those trading in non-KPCS diamonds risk expulsion from the world's 24 diamond bourses.

A leaked copy of the KPCS working party's report paints a damning picture of violence, smuggling and lawlessness around the Chiadzwa site in Marange district, 60 miles south of the city of Mutare, most of which is owned by the Aim-listed firm African Consolidated Resources (ACR).

The meeting in Namibia comes as human rights workers in Zimbabwe claim that more than 400 people have died in Chiadzwa since the government launched a bloody crackdown on thousands of illegal diamond panners in October last year.

Smugglers, in collusion with military, police and government figures, are said to have earned millions of pounds spiriting the gems across the nearby border with Mozambique, where dealers from Lebanon, Belgium, Iraq, Mauritania and the Balkans buy up the diamonds for export.
In a documentary filmed in Zimbabwe and shown on state television in South Africa last week, victims of the crackdown spoke of killings, beatings, rapes and attacks using dogs.

Men and women pictured on screen said soldiers were mainly responsible, with one woman saying she miscarried after a beating and another man claiming he had been whipped with razor wire. Many said they were too scared to receive treatment at the local hospital through fear that the military would track them down. The local morgue was said to contain 70 bodies from the violence, with relatives too afraid to collect them for burial.

The documentary was screened ahead of tomorrow's conference in the Namibian city of Swakopmund.

Bernhard Esau, the KPCS chairman, has declined to speak about the report's contents but the leaked copy says the mission, led by the Liberian deputy planning and development minister, Kpandel Fayia, is recommending a temporary ban of six months or more.

Fayia's team spoke to a group of seven panners in Chiadzwa who said they were allowed to keep 10% of the proceeds from the diamonds they dug up. The report concludes that parts of the Zimbabwean government and military were complicit in the violence and illegal diamond trade with syndicates of soldiers forcing civilians to dig for diamonds.

The report states: "Zimbabwe authorities are aware of these syndicates and ongoing smuggling operations and have permitted them to continue. This group [of seven panners] also told members of the team that they observed extreme violence against illegal miners and that the police and army used two helicopters, AK rifles, dogs, horses, shotgun pellets, batons, and tear gas.

"The team interviewed more than 20 victims in Mutare and Chiadzwa. The victims included women who reported that, while under the custody of the security forces, they were raped repeatedly by military officers and that they have been forced to engage in sex with illegal diamond miners.

"During the interviews of victims, the team heard accounts of beatings of men and women by the security forces, and saw wounds and scars from dog-bites and batons."

The KPCS team was told by the minister of mines, Obert Mpofu, that Zimbabwe would demilitarise the area but report that has not happened. The report concludes: "Urgent corrective action is required if the integrity and effectiveness of the KPCS are to be preserved. In light of Zimbabwe's non-compliance with the minimum requirements, the participation committee should consider the full range of options including suspension of Zimbabwe for a period of at least six months, or until such time as a KP team determines that minimum requirements have been met."

Anton Dekker, of the Amsterdam-based fair-trade lobby group Fatal Transactions, believes a six-month suspension from the certification scheme should be a minimum. He says: "Zimbabwe should be suspended until diamond mining is properly regulated and is transparent, there is demilitarisation of the area and violence is stopped. As long as [Zimbabwean prime minister] Morgan Tsvangirai can't get control of the area, I don't see the situation changing.

"Nothing has changed since we first commissioned a report there in 2007. But it is not just Zimbabwe where the government is involved in this kind of thing – member countries like Angola, the Democratic Republic of Congo and Venezuela also use soldiers to shoot at panners.
"I think the Kimberley Process will suspend Zimbabwe – at least, I hope they do. It's a good opportunity to reinforce the spirit of the scheme and I think it will also put pressure on Mugabe to settle his problems with Tsvangirai."

The KPCS findings on the ground in Chiadzwa back claims by campaigners in Zimbabwe. Farai Maguwu, director of the human rights group Centre for Research and Development, based in Mutare, said on last week's documentary: "The government gave an order to kill people. We estimate that more than 400 people were murdered by the state in Chiadzwa.

"These people could have been arrested and charged and found guilty. They could have been sentenced, but the government chose to kill these people."

But Mpofu was unrepentant, telling the documentary: "We have nothing to hide. We are going ahead with the exploitation of our resources and nothing will stop us."

The government sent in troops in October last year after thousands of people descended on the site in a modern-day diamond rush. Soldiers beat and killed illegal panners as helicopters hovered above, shooting at miners.

Since then, the military has thrown a huge cordon round the site and is accused of using local people as virtual slaves to dig up the diamonds, which are then smuggled out of the country.

Three weeks ago the British owners of the 40,000-hectare (100,000 acre) site,
won a high court ruling ACR, won a high court ruling banning the state-run Zimbabwe Mining Development Corporation from extracting gems. The judge, Charles Hungwe, also ordered the power-sharing government to restore ownership to the firm but the authorities ignored the ruling, shortlisting two other companies to run the site.

In June, the New York-based Human Rights Watch cited accounts from more than 100 witnesses, miners, police officers, soldiers and children alleging human rights abuses by troops that left 200 dead.

On Thursday, HRW's Africa director, Georgette Gagnon, called for Zimbabwe's suspension, adding: "Zimbabwe has had more than enough time to put a halt to the human rights abuses and smuggling at Marange. Instead, it has sent more troops to the area, apparently trying to put a halt to independent access and scrutiny. Zimbabwe has already reneged on a commitment to withdraw the army from Marange. Clearly, it will only be moved to make changes under the full force of suspension."

Zimbabwe is in the midst of another political crisis as Tsvangirai and ministers from his Movement for Democratic Change party continue to boycott cabinet meetings of the joint government in protest at the arrest of his political aide Roy Bennett and Mugabe's refusal to implement political agreements.

The stalemate coincides with a diplomatic row after the United Nations' torture investigator Manfred Nowak was expelled from the country on Wednesday after claims that he had no clearance to visit. A senior Mugabe minister said his visit had been provocative, despite an invitation from Tsvangirai.
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Zimbabwe President Robert Mugabe arrives for the burial of a prominent member of his party, Misheck Chando, in Harare, Saturday, Oct. 31, 2009. Mugabe says he is committed to working with his estranged prime minister despite his assessment that the former opposition leader is "not mentally stable" for boycotting the coalition government. (AP Photo/Tsvangirayi Mukwazhi : Zimbabwe: Mugabe takes sharp dig at Tsvangirai



" In a classic case of a despotic ruler taking over state assets to hold onto power, Mugabe, the guerrilla hero who drove out the British and the ruling white minority from the former Rhodesia in the 1970s to become president in 1980, allegedly used the funds from illegal diamond sales to buy the loyalty of his army "
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President Robert Mugabe delivers his speech at the burial of a prominent member of his party Misheck Chando in Harare, Saturday, Oct. 31, 2009. Mugabe took a swipe at the Zimbabwean Prime Minster, Morgan Tsvangirai, for disengaging from government, accusing him of being dishonest and never to be trusted. (AP Photo/Tsvangirayi Mukwazhi)
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The return of the bloody diamonds:
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Miners at gunpoint in Zimbabwe
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In a remote corner of Zimbabwe, the true worth of a vast new diamond field emerges. 's response? To allow his mutinous military to enslave villagers as miners and seize the profits - and destroy fragile protocols against blood diamonds.

Foreign Reporter of the Year Dan McDougall and photographer Robin Hammond risked their lives to get dramatic first-hand evidence of the unimaginable suffering of the miners for Live magazine. Their despatch poses the question - can you go into your local jewellers with a clear conscience ever again? By DAN McDOUGALL September 2009

Diamond miners are being used by the military and police to extract stones despite threats from the Kimberley Process of sanctions against Zimbabwe for the practice. Above

The mailashas emerge as cautiously as impala from the shadows of scorched yellow kikuyu grass that fringes the long highway to Mutare. Their name translates as 'smugglers'. It's our first sight of them. There are three in all and they're no more than 14 years old.

They reach out into the road at the approach of our slowing BMW and take a deadly gamble, forming their fingers into a distinctive diamond shape. In their damp palms are tiny grains of diamond. They have chosen the final thralls of dusk - a time of shadows and distraction, when the sights of army patrol rifles are blinded by the vast and sinking orange glow in the sky - to make their sales pitch to a car full of strangers.

Clicking off from his mother-tongue, Shona, our translator throws down his mobile phone in a panic and shouts at me to drive on.

'We mustn't stop,' he screams. 'They'll be dead in a week. The road is littered with the bones of smugglers. They are signing a death warrant by sticking their necks out on this cursed road.'
We've driven ten hours from the South African border in a fog of frayed nerves and off-road diversions to avoid army checkpoints. Posing as black-market diamond traders, we're travelling towards the very hell they are fleeing: Zimbabwe's Wild East. Here, within hiking range of the road we're driving, are the remote diamond fields of Marange, shallow earth mines uncompromisingly controlled by Robert Mugabe's henchmen.

The full extent of the diamond fields in eastern Zimbabwe became clear following discoveries made in June 2006. They're vast - 400 square miles - making the scrubland amid the bleakly beautiful mountainscape possibly the world's biggest diamond field. The finds were made by British prospecting firm African Consolidated Resources (ACR). It had just taken over the rights to explore the area from De Beers, which had failed to renew its mining licences despite having found diamonds before 2006.

A miner holds up a diamond he's attempting to sell behind the backs of the military and police. Above

There was an outcry in the West. Critics such as Global Witness claimed ACR was making little more than a Faustian pact with Mugabe, the most vilified leader on the African stage.

Maybe it was fateful, then, that in September 2006, Mugabe's Zanu-PF government reneged on the deal and seized back the mining rights to the region. When Zimbabwe's hyper-inflation made army pay almost worthless, soldiers rioted in the capital Harare.

Without the patronage of the military, Mugabe faced losing power. Against the ruling of the country's courts, he ceded mining operations to the direct control of the police and army.

Amid public confusion over ownership, a diamond rush began around the Marange fields. Over 10,000 illegal artisanal miners invaded the site and began working small plots. But by January 2007, the governor of the Reserve Bank of Zimbabwe, Gideon Gono, warned that the country was losing up to $50 million a week through gold and diamond smuggling.

The diamond industry is a licence to print money for the military. With guns, brute force and a terrified population, everything runs like clockwork

The response of both the police and, in particular, the army to bring their interests under control was brutal. Launching Operation No Return in October 2008, the army ordered a shoot-on-sight policy, killing hundreds of illegal miners. Men were strafed by helicopter gunship, and a cordon was set up around the diamond fields. As many as 10,000 villagers living near the fields were relocated 15 miles away.

The army then set about doing the unthinkable: recruiting those same villagers under gunpoint and forcing them to dig for diamonds. This is the situation that remains today.

The UN is the only international body that can isolate pariah nations dealing in 'blood diamonds' - stones produced in conflict zones - and salve our consciences when we buy jewellery. It's backed by the Kimberley Process, whereby diamond-producing and trading nations commit to strict self-regulation to keep blood diamonds out of the world's supply.

As a Kimberley Process review panel prepares to rule on Zimbabwe's future as an exporter of gems, a Live magazine investigation has uncovered shocking first-hand evidence of the violent enslavement of alluvial miners in the eastern badlands of the former British colony. These men, women and children are being forced at the barrel of a gun by soldiers to dig out tiny diamonds from the earth with their bare hands, to pay the troops' wages and thereby keep Mugabe in power.

A miner in Zimbabwe tunnels into the ground . Above


Our report, which we're submitting to the review panel, comes just weeks after the Zimbabwean government assured the world its diamonds were ethical. The situation as it stands makes a mockery of the Kimberley Process.

The young men stand at the roadside shaking. The youngest, weeping with fear, shouts and pleads with his captors. His mouth is foaming. Heknows that this is just the beginning of his torment. Handcuffed together and forced to lean against a baobab tree, their trousers at their ankles, blood streams down their buttocks - a common sight in war zones: a humiliation and a warning to others. The soldiers sit nearby smoking cigarettes, waiting for the truck to come so they can carry on their torturing in private.

Everyone on this road is suspected of being a diamond smuggler. The road to Mutare has become one of the most militarised in all . Army checkpoints scar the highway at 500-yard intervals. Everywhere is the detritus of soldiers: cigarettes, moonshine bottles and bullet casings. Scorched earth from cooking fires stains the lay-bys. At regular intervals, women stand behind pulled-over buses, their hands stretched in the air as their private parts are invaded and frisked by scruffy soldiers and radicalised youngsters from the Zanu-PF's youth training centres.

The youngest, weeping with fear, shouts and pleads with his jailers. His mouth is foaming. He knows that this is just the beginning of his torment

According to a 2009 Human Rights Watch report, army brigades are now being rotated in the Marange region to satisfy senior ranking officers from different divisions so that more soldiers can profit from the diamond trade. The same report also states that villagers from the area, some of them children, are being forced to work in mines controlled by military syndicates.
At times you can almost make out the word ' diamonds' in slow-motion on their lips as the young soldiers ruthlessly tug at bra straps, sexually abusing, humiliating and tormenting their subjects. The motivation for the police and military to stop the flow of smuggling is simple and calculating: diamonds are their domain.

We are posing as diamond buyers from , and are on the road just south of Mutare, the provincial capital on the border. At each checkpoint the car is painstakingly searched. The soldiers will then pull us aside and produce small gritty slivers of diamond from hidden belt pockets in their military fatigues. The going rate for poor stones is $35 a gram. In the West, the price would be 20 times as high.

Diamond miners in the Marange fields scrape through dirt trying to find stones. Above

The closer we get to the mining fields the purer the stones become and the more our translator warns us our lives are in danger. Even with our cover as diamond dealers we are out on a limb here. At each checkpoint the soldiers tell us that most of the dealers are black - Nigerians.
We decide the only safe way for us into the diamond fields is to park ten miles away and hike into the bush at 4am. As we set off, in the darkness, everyone is terrified.
'If we are caught they'll shoot us and bury us in the bush until our bones are ready to be taken away elsewhere,' our translator says, on the verge of tears.
Heading to the diamond field of Chiadzwa, in the Marange district, we hear in the wilderness a pack of wild bush dogs ripping apart the carcass of one of their own. Hunted down by forest-dwelling illegal diamond prospectors and with no prey on which to feed, the desperate beasts have turned to cannibalism.

After three hours we're entering Chiadzwa's alluvial mine fields; a further three hours in the bush, doubts set in and the fear that we're lost deepens. We continue for five hours more even though we run out of water and are forced to drink from bore holes, where donkey droppings float on the surface of the water. Faced with sunstroke, there's no alternative. Finally we come across a group of illegal miners, each panning the parched, sandy earth.

From below the mountainside where we're standing, others emerge like shrews from holes in the ground, their black faces stained with grey dust and sand, their bloodshot eyes illuminated by dripping wax candles. They are some of the thousands of miners in the region who dig through the earth with blunt pickaxes and bare hands.

Some of the men and women who scrape through the dead earth here call the area the 'Eye' - as the mine gets more challenging and dangerous, the further you're drawn into it.
Most, without irony, call it churu chamai Mujuru - Mrs Mujuru's ant-hill. Mrs Mujuru is the country's Vice President and wife of its former army chief, General Solomon Mujuru. She is well known for her fondness for diamonds.

The dream that forces the miners to take extreme risks is not just a simple frosty-grey stone. They believe diamonds can bring liberation from their bonded status. Success is a stone no bigger than a newborn child's thumbnail; that's the price of freedom.

Like all miners in the region, these people are now working in small syndicates for the Zimbabwean military, each team satisfying individual soldiers who must pass the best gems further up the chain of command. According to the Human Rights Watch report, the syndicates are being operated with the full sanction of the Harare government.

The report says that at a time when Zimbabwe is struggling to pay civil servants and soldiers a stipend of barely $100 a month, the extra income from diamond mining for soldiers is serving 'to mollify a constituency whose loyalty to Robert Mugabe's Zanu-PF, in the context of ongoing political strife, is essential'.

One of the miners, Jona, emerges from the ground shrouded in dust, looking like a ghost. At first, startled by our presence, he moves to run but he stretches out his palm for a few South African Rand in return for conversation.

'We have no choice but to do this,' he says. 'The soldiers rounded us up in the night and they have threatened to kill our families. It's always the diamonds. What do they mean to people in the West? What do they mean to you when my people, the Manyika, are dead men walking?'

The ever-present Zimbabwean military guard the outskirts of a rally in support of President Robert Mugabe. Above

He contemptuously spits out bitter peanut shells.

'We are forever in the eye of our killer: the Zimbabwean army sniper, the policeman, the spy. Our enemy is brutal but we must feed our children and mining here in the darkness is the only way out. It is pitiful and many of us have been killed but what else can we do?'

Jona says the biggest stone he has found in the fields was several years ago - from his rough description, a diamond of around 2.20 carats.

'We worked for the police back then and things weren't as intense, so we could get stones out. I sold that one for $200 to a businessman from Harare. You could see through a corner of it like a piece of glass.'

I tell Jona his stone might have fetched as much as £7,000 in Antwerp or . He shrugs and kicks the ground at his feet.

'It was my chance to get out but I had to split the money and then, later, the police came to my house and took most of the rest. I was left with about $100 and they beat me to find that but I didn't give in. They hit my kidneys with batons over and over again. I passed blood for months and couldn't walk. But I kept my money.'

As we speak, a second miner in his mid-twenties approaches us and waves his pickaxe mockingly. He refuses to give his name but allows us to photograph him digging. He bears the scars and sorrows of a man three times his age. In his cracked hands are a few tiny grains of what looks like glass: tiny diamond slivers, practically worthless. He seems to think we are making a purchase, so he eggs us on to handle the miserable grey stones.

The soldiers stabbed me with their bayonets and beat us to the point that I couldn't feel pain any more

'We've been working this site for a month but found only a few diamonds. Further up the valley there is more promise - there we use shovels to dam off small sections of the streams. There are bigger diamonds in the centre of the Eye but the military hover over everyone there at gunpoint, watching the miners like hawks. When they are done, they search mouths, anal passages and even rip open wounds to see if miners have hidden stones in their flesh.'

As the man speaks the rain suddenly comes down hard, washing the blood-red mud from the ground over his bare feet.

'You must go,' he says. 'If they find you here they will kill us all.'

Just as the history of the Arab Gulf states is tied to the region's oil, the discovery of diamonds in Africa has shaped the continent's borders and remains one of the leading causes of conflict. It is no accident that Africa's most war-torn countries of the past decade - Sierra Leone and the Democratic Republic of - are also among its most diamond-rich nations, as well as the poorest and least developed.

In 2000 the UN responded to international outrage over illegal trade in blood diamonds from despotic nations such as and Ivory Coast by creating the Kimberley Process Certification Scheme (KPCS). It requires all exporters to register their diamonds with their respective governments before any can be certified legal and shipped abroad with the paperwork.

Since then, mostly through clever marketing on the part of the diamond industry, the issue of blood diamonds has largely fallen off the political agenda. This is despite the appeals of pressure groups such as Amnesty International and Global Witness, who claim the problem is still a long way from being resolved.


The reality is that across the African continent, millions of miners - many of them children - continue to scour the earth at gunpoint looking for gems. Most of those that are found are sold well below their market value to illegal diamond traders.

The stones are then smuggled out to cutting centres around the world, without tax being paid. This means that none of the benefits of such mining find their way back to the people of Africa. Where they are mined responsibly -

, , - diamonds can contribute to development and stability.
Where governments are corrupt, soldiers pitiless and borders porous, the stones remain agents of slave labour, murder, dismemberment, displacement and economic collapse.

Miner Tendaimoyo shows the scars he claims were inflicted by soldiers during a punishment beating. Above

Today in Zimbabwe, diamonds are continuing to destroy lives. But until the international community brands these gems as 'blood diamonds', stones from one of the world's most troubled nations will continue to find their way on to London's Bond Street.

In some respects, Zimbabwe's soldiers have a tough job keeping track of their prized assets.
Diamonds are tradeable and portable; they can be mined with a pick and shovel in many places. They also can be smuggled in many of the ways drugs are not. With diamonds there is no odour to aid border guards with dogs. Over the years, diamonds have been ingested, concealed in body cavities, hidden in wounds. Desperate people do desperate things - and never more so than when there is the prospect of riches in place of utter poverty.

A diamond rush - as has taken place in Zimbabwe - happens for a reason: people who live around the alluvial fields are starving and desperate.

'Young men cannot bear to watch their mothers, sisters and wives starve to death,' says our translator.

But those same factors that see miners lose diamonds to the brutal middlemen also work in their favour. On an international scale, tracing stones is virtually impossible.

, executive board member of the Diamantkring, one of Antwerp's four main diamond exchanges, said recently that regardless of protocol and the regulations imposed by the Kimberley Process, his entire business depended on trust. If diamonds have been smuggled by African rebels and re-packaged elsewhere he'd never know about it.

Eli Haas, president of the

Diamond Dealers' Club, goes one step further.
'There is no way to tell where a diamond comes from. Diamonds don't have identifying marks and probably never will. You just can't look at a diamond and say, yes, it comes from Sierra Leone or the Congo. Only God knows this.'

A lawyer in Mutare, Zimbabwe's diamond capital, said, 'The diamond industry is a licence to print money for the Zimbabwean military. With any commodity in Africa, it's about securing your logistics and export routes. You run the army so you control the people, turning them into slaves to dig the earth for diamonds.

'You own the highways and control the checkpoints so getting the diamonds out is even simpler. Army and police lorries have the rule of the highways so getting to the borders, South Africa in the south or Mozambique in the east, is never a problem. You control customs on one side and bribe officials on the other. With guns, brute force and a desperate and terrified local population, everything runs like clockwork.'

We've been directed to a remote village at the edge of the Chiadzwa field. We enter the compound but there's a ghostly silence. The residents have long gone, beaten out of their homes by the military and moved 25 miles away. But a whistle goes out: watchmen looking out for soldiers. In a small hut we find Tendaimoyo. The search for his story has brought us as deep into the bush as we can get.

'We can live here by day, and then at night we go out and dig,' he says. 'But we change it around. I know what happens when we get caught digging outside the syndicates.'

As we speak, Tendaimoyo pulls down his trousers and bares the livid scars that cover his buttocks - the aftermath of a brutal army baton attack.

Sometimes reporting from Africa is hard; unless you have seen it for yourself, you are wary of fully accepting any account at face value. But these wounds are unmistakeable; they are raw and open and stand out against his skin. He sits in excruciating pain and tells us he is not finished. On his chest there are puncture marks from knives and through his kneecap a piercing hole - an open wound the size of a golf ball.

'The soldiers came here and found us at a digging site close by,' he says. 'We were working for them at that time but they told us we had produced no diamonds and we deserved to be punished. They gathered a crowd around me and stabbed me through the leg with their bayonets.

'Another of our group was stabbed in the stomach. They then beat us to the point that I couldn't feel the pain any more, and exposed our buttocks like they were playing a game. I looked at my two friends on the ground across from me. Their legs were streaming with blood. One of them had died, and blood was streaming from his eyes and ears. I passed out.'

In the dark recesses of his hut, Tendaimoyo is boiling traditional madhumbe, a wild indigenous tuber root found only in the foothills of Chiadzwa.

'My journey here was for my family. I was a cow herder but the owner of the cattle died, and the army took his animals for food. Then the army told us they wanted our land for mining so they poisoned our water to forcibly relocate us. Our only chance is here in the dirt. I have nothing to lose. They almost killed me before. As I lay on the ground I made my peace with my family - but they stopped.'

Tendaimoyo told me he had also survived the helicopter strafing by the Zimbabwean military.
'When the helicopters first came they dropped tear gas for the first hour. Then they started shooting. People were running wildly everywhere, stumbling over the dead. I saw children die. After it was over, they moved in with dogs and I witnessed women being bitten to death.
'They raid us every week now, even though 90 per cent of the miners here work for them as slaves. The raids are part of a circus, normally to empty the fields of workers so foreign inspectors cannot interview them.

'Now the army carries out raids - small units go out and target miners who aren't cooperating. They don't shoot them - they beat their kidneys until they bleed and the men pass out and die. Their bodies are put into holes and covered up. The site is then made off-limits and when the army comes back round again to remove the bones, the flesh has been eaten by insects and rats.'

Diamonds are tradeable and portable; they can be mined with a pick and shovel in many places.Above

At least a dozen miners interviewed by Live claimed that plain-clothes officers from Zimbabwe's Criminal Investigation Department had started the diamond rush by turning up in the Mutare area with suitcases full of freshly printed notes. The men said they'd been given the money by Gideon Gorno, the head of Zimbabwe's fragile banking system. At the time they claimed to be representing a government company called Fidelity. But there is no record that such a body ever existed. According to the miners, the difference between selling black-market diamonds to the Zimbabwe CID in 2007 and the situation today is their freedom to move.
'We are in a locked-down world,' says Tendaimoyo.

'Everywhere there are patrols looking for diamonds. Women are intimately searched, men have teeth pulled out with pliers as a warning to others not to smuggle diamonds in their mouths.
'Before we were being exploited by corrupt politicians making a killing from our stones. Now we're prisoners and slaves. Things were better before. Each day they get worse. I was almost killed a few weeks ago and each day others like me are abandoned in the bush, eaten by dogs, unable to crawl out of the pits.'

As we hike out of the bush in the dusk, the journey is fraught and terrifying. At each rustle of grass we hit the ground, waved down by our point man. Suddenly we come across a village, somehow bypassed in the clearances. From the valley below the sound of prayer and penitence is floating across the air from the river. At the bank a dozen middle-aged women are gathered in the water in the red glow of evening. Their skirts, branded with biblical passages and proclamations to the Lord, are wrapped up to their knees in the murky water, exposing their heavy-set legs. The pastor is dunking one of their number into the water, time and time again, to rapture.

As we pass them, their hymns are lost to the noise of the bush. Mice biting and scratching, insects buzzing and in the distance the violent crack of a rifle firing somewhere in the remote hinterland.

Everyone holds their breath.

The Limpopo River flows before me precisely as Rudyard Kipling once found it: 'Grey-green... greasy... set about with fever trees.' On a distant bank, from the stumpy shadows, come the refugees - a long and familiar string of terrified Zimbabweans clutching overflowing plastic bags stuffed with clothes, Bibles and dreams of a new life in .

An untamed no-man's land of smugglers, corrupt security forces and a never-ending flow of illicit human traffic across from the third world to the developed world, it is boom time in the drab South African border town of Musina, a remote community that has found itself at the centre of one of the world's worst refugee crises.

Today South Africa's borders are a shambles. There are just 190 police officers to control 2,300 miles of coastline and 283 officers on its 3,000 mile-long land border. As a direct result, there are between three and five million illegal immigrants in the country.

A 2008 report by South Africa's Auditor-General found no specific border intelligence had been carried out since 2004, nor has there been any specialised training for border control. Land points of entry either have insufficient or no critical equipment such as baggage scanners, CCTV cameras and hand-held explosive-detection systems. Where these are in place, they are often not used.

For the Zimbabweans fleeing oppression to a life of menial labour such incompetence is, in a perverse way, a godsend, at least if they can live long enough in South Africa without being assaulted and extorted by the police and xenophobic mobs. For diamond smugglers it is similarly an easy route out with gems.

At Musina's United Reformed Church the pews are packed with Zimbabweans praising Jesus. Some, despite their devotion, are full-time smugglers, members of trafficking syndicates such as the Maguma Guma gang, who 'help' hundreds of border jumpers trying to cross illegally into South Africa every day.

Using their contacts to pay off Zimbabwean security officers, the gangs bypass immigration and assist jumpers to cross the river on the underside of a disused train bridge at the Beitbridge border crossing. On the South African side of the border, they have cut holes in the three barbed wire fences. Using mobile phones to alert one another, they wait in the bush until army and police vans patrolling the border have passed and give the signal for jumpers to run through to the other side. This is all for a negotiated price of around $10.

Outside Musina's church, Mutseti Savo, 32, claims he lost both his house and his job in Mugabe's continuing Operation Murambatsvina ('Drive out the rubbish'), in which soldiers, police and ruling-party militias used murder, rape and violence to destroy the homes and small businesses of hundreds of thousands of poor people living on the outer edges of Zimbabwe's towns. Like many others who lost everything, he drifted east to the diamond fields.

'I know blood diamonds are all about war but there is no war in my country - except for a government that fights its own people. Unemployment and starvation lead you to do desperate things, to put your life on the line. Diamonds, gold, drugs... anything to get by and keep your family alive. In Zimbabwe there is no right and wrong any more, there is eating and starving - even now, when the West claims everything is good again. This is a lie.'

In the background a large group of Zimbabwean women sing hymns and choruses in Shona. I ask what they mean.

'These people are good Christians but even Christians can find it hard to forgive,' says Savo.
'These are not hymns, they are anti-Mugabe songs that are illegal back home. There they would be shot for singing such songs.'

As we walk away Savo sticks out a long pink tongue. Underneath is a tiny black diamond.
'OK, we've talked now. How much will you pay?'

The Kimberley Process:

Can it still stop the flow of blood diamonds?

From offices in New York and Tel Aviv, the movers and shakers in the international diamond community have looked on and listened to the information coming out of Marange with typical reticence. As Zimbabwe is a participant in the Kimberley Process, which regulates trade in diamonds, its diamonds continue to enter the trading markets of London, Antwerp and Dubai with the full sanction of the industry.

Many within the industry believe the horrors of Zimbabwe's diamond fields could sound the death knell for the Kimberley Process, which was established in 2003 to stem the flow of blood diamonds.

'The Kimberley's credibility is suffering at the moment,' says Annie Dunnebacke, a campaigner for Global Witness.

'If the Kimberley Process can't suspend a participant in those conditions (in Zimbabwe), then what's it even there for?'

Critics claim that part of the problem lies in the structure of the organisation. The scheme is voluntary and based on consensus being reached among participating countries, allowing political and commercial ties to come into play.

For example, the annual rotating leadership of the Kimberley currently has Namibia at the helm. Zimbabwe recently signed a uranium mining memorandum of agreement with Namibia, one of the world's largest uranium exporters. Zimbabwe, meanwhile, is believed to have uranium reserves worth billions of dollars. Source
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Additional Reading :

Kimberley Process Moral Corruption

Zimbabwe Diamonds Still Kill Despite Failing Kimberley Process

Mugabe Wants His Cake & Eats It Too

Blood Diamonds Plugging the Gaps

Chinese Apartheid in Africa

Dubai and Angola Explore Opportunities

Kimberley Process Certification Scheme : The Farce Continues :" The KPCS falls under the management of the DMCC " : Chaim Even-Zohar

The DMCC Special Report*UAE and China forge diamond links" In what is being hailed as a “new-age Silk Road”, delegates at the show cited strengthened ties between China and the Middle East in industries far beyond jewellery "

Kimberley Process Failing Part 3

Interview with Ian Smillie:Why He's Ditching the Kimberley Process

Kimberley Process Certification Scheme's Relevancy

Are Diamonds a Security Issue as well?

“Zimbabwe’s Blood Diamonds” – transcript

Ban Zim diamonds: KP final report

The report to be tabled at a KP meeting that begins in Namibia tomorrow calls for an international ban on Zimbabwe diamonds for six months or until such a time a KP team determines that the country has achieved compliance with the set standards.

Excerpts: Although some aspects of the Zimbabwean system of internal controls and KP compliance do appear to function without concern, the team has identified several areas in which it finds Zimbabwe non-compliant with the minimum requirements of the KPCS.

In addition to the numerous recommendations presented below, the team echoes the findings of a previous KP Review Mission to another participant:

The review mission is mindful of the implications of the findings for both the integrity of the KPCS as well as for Zimbabwe. Clearly, the current state of affairs in [Zimbabwe], in terms of the level of compliance with the KPCS, cannot be allowed to continue.

When a participant fails to fulfill the obligations it has committed itself to and satisfactorily adhere to the minimum requirements for compliance, the objectives of the KPCS are undermined.

Urgent corrective action is required if the integrity and effectiveness of the KPCS are to be preserved . . .Thus, the team believes that these matters should be reviewed as a matter of urgency by the Working Group on Monitoring (WGM) and Participation Committee for necessary action, with respect to individual issues and overall action with respect to the status of Zimbabwe.

The team remains prepared to assist with whatever actions the KP or its subsidiary bodies deem necessary.Although this report has focused almost exclusively on Zimbabwe, the team believes it critical that coordinated action be taken by other KP Participants in the region – particularly South Africa, Namibia, and Botswana – to act against smuggling.

Moreover, these participants boast many best practices and other aspects of their KP compliance systems that Zimbabwe could benefit from understanding and implementing.

For example, the Karas Region in Namibia (Namibia’s diamond producing region) and Northern Western Province in South Africa, jointly collaborate on matters related to illicit diamond trade and share information on a regular basis. This has been a “results-based” system of co-operation, and illicit diamond trade has been rooted out. Namibia and South Africa still conduct joint operations along their common borders.

Further, the team urges KP participants from outside the region whose nationals have been connected to illicit buying and smuggling – the European Community (Belgium), Israel, Lebanon, and the United Arab Emirates – continue to practice “enhanced vigilance,” as previously recommended by the WGM, and focus more resources on preventing the entry of illicit Marange diamonds into their territories.

If necessary, these Participants should undertake diplomatic outreach to Mozambique to pursue the exchange of law enforcement information that Mozambique may have on the illicit operations underway in its territory.

As set forth in the mandate, the team has developed a number of recommendations for further action, addressed to Zimbabwe and to other entities within the KP, as follows:

(Xhead) Government of Zimbabwe

1. Acknowledgement of non-compliance with KP minimum standards. Voluntary self-suspension from rough diamond trading until KP determines that minimum standards have been met. The team notes that the Government of Zimbabwe has positively addressed the first part of this recommendation in its July 14 response but did not discuss voluntary self-suspension.

2. Development of a workplan, in coordination with KPCS, to provide for improved internal controls throughout KPCS compliance system and, in particular, a sustainable and secure production environment at Marange, in line with KP minimum standards. The development and implementation of this work-plan should be undertaken with the involvement of domestic industry and civil society, consistent with the tri-partite nature of the KPCS.The team notes a positive response by the Government of Zimbabwe in its July 14 response to the concepts described in this recommendation but is not aware of further action in this regard.

3. Because of the team’s findings that the presence of ZNA soldiers both participate in illicit diamond trading activities and actually contribute to the general situation of lawlessness in and around Marange, the Government of Zimbabwe should follow-up on its commitment to withdraw military personnel from the area in and around Marange, including Chiadzwa village.

4. Resolution, in accordance with Zimbabwean law, of outstanding ownership disputes and land claims in and around Marange. The local community in Marange area should be formally represented/involved in any decision-making processes regarding future use of the area, including relocation and beneficiation.a. In conjunction with the claims resolution, an education/awareness campaigns is needed to educate local residents about the negative impact that illicit diamond trade can have on the economy. Local residents in and around Marange should be encouraged to resist smuggling and preserve diamonds for local development opportunities, as has largely been the case at Murowa, for example.

5. Immediate implementation of enhanced security measures at Marange and the MMCZ complex.

a. Construction of the fencing around Marange must be completed, and all areas where the fence can be penetrated must be mended. The plan developed by the ZRP for the necessary fencing and equipment measures should be reviewed carefully and implemented, to the extent possible.

b. A more detailed profile system must be introduced in order to prevent suspected illicit diamond traders from entering the diamond areas or from being employed in any diamond mine.

c. At Marange, employees sort diamonds with safety gloves. When Diamonds are manually-sorted, tweezers should be used to pick up the diamonds and scrapers to shift or separate gravel, rather than by bare hands or with safety gloves. Diamond sorters should also not wear long boots.

d. Diamonds at Marange are sorted under an open shade, and one can see the diamond box from a distance. This is a security risk. The sorting area must be sealed off. A diamond register must be introduced where diamonds are sorted, so that the contents of the box may be recorded before it is taken elsewhere. There must be access control into recovery and only authorized persons must enter the recovery. There must be only one single entry point.

e. Method of diamond sorting at Marange is very outdated. There is a possibility that only 60-70% of diamonds are retrieved. There is a need to control access to tailings as they still contain a lot of diamonds.

f. The security officials at Marange observe the sorting of diamonds but appear to be absent when the diamonds are counted and weighed in. Security officials on site must have clear job descriptions. There do not appear to be specific tailings, gravel, or sorting handling procedures.

g. The Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.

h. Once the proper systems are in place at Marange, Zimbabwe may consider development of a well-trained Diamond Detective Branch (undercover agency, similar to one in Namibia and South Africa) to vigorously deal with the illicit diamond trade at Mutare and other border areas. The branch must share information with neighboring states and collaborate in obtaining full information on particular suspects and networks.

6. Study ways to improve recording and quantification of illegal trade in diamonds, i.e. distinguish foreign nationals in the police seizures database.

7. Provision of a full assessment of the total unsold production in order to reconcile production, stockpile, and exports. This must include diamonds subject to judicial process, which the Team was not able to review.

8. Ensure that necessary manual changes to the HTS classification error on pre-printed KPCs are made consistently.

9. As recommended in the 2007 RV report, consideration by the Government of Zimbabwe of revising the current KP compliance structure to create a simplified process that reduces the number of actors involved in the import and export processes.

a. Given the particular needs demanded by the KP, Zimbabwe may consider removing production and administration of diamonds from the MMCZ and ZMDC and instead develop an entirely separate diamond office.

10. Review of previous submissions to the KP concerning Marange for possible revision.

11. Presentation to the KP of relevant information concerning the actions taken against Newman Chiadzwa, as well as a renewed commitment to refrain from retaliation against Newman Chiadzwa or any other individuals with whom the Review team met.

12. Consideration of the appointment of a special rapporteur or other appropriate mechanism to further document the human rights concerns and violence at Marange. The Team notes a positive response by the Government of Zimbabwe in its July 14 response to this concept.

a. Competent authorities should institute an investigation that will further look into the issue of violence against civilian populations emerging from the operations in Marange.

b. The KP Chair should contact the Office of the United Nations High Commissioner for Human Rights and provide a summary of the findings of this report, as well as summaries of interviews/photographic evidence.

c. As stated above, the Government of Zimbabwe should ensure that any efforts to increase security in and around Marange are carried out in a manner that respects human rights and does not contribute to further smuggling.Kimberley Process/Working Groups/WDC

13. In light of Zimbabwe’s non-compliance with the minimum requirements, the Participation Committee should consider the full range of options set forth in the Interim Measures Guidelines, including suspension of Zimbabwe for a period of at least six months, or until such time as a KP team determines that minimum requirements have been met. If Zimbabwe opts to self-suspend, then the KP should undertake the necessary processes to implement the self-suspension.

14. Facilitation by the KP of the appointment of an independent monitor to assist with the implementation of the work-plan for Marange and overall Zimbabwean KP compliance system. The monitor would assist in the coordination of the request and receipt of technical assistance and support through the KPCS and its participants and observers.

15. Facilitation by the KP of the provision of technical and other assistance, e.g. security cameras, fencing, and other measures, during which time the Government of Zimbabwe implements, as part of its work-plan, a security program that excludes the ZNA, and to the fullest extent possible, the ZRP from responsibilities in and around Marange.

16. Creation of a Regional Task Force, with a structure consistent with the tripartite nature of the KPCS, to provide an on-going mechanism for oversight of the independent monitor, provision of technical assistance, information sharing, and other coordination efforts throughout the region.The Task Force could work directly in conjunction with the independent monitor, or as a mechanism within the KP (e.g., initiative of the KP Chair).

17. Review by WGS of 2009 statistics from the DRC and other regional diamond producing Participants, as well as the EU, UAE, India, Israel, and Lebanon to determine if illicit Marange diamonds have entered the legitimate trade.

18. Development by the WGM of additional measures for “enhanced vigilance” by all KP Participants to ensure that illicit Marange diamonds do not enter legitimate trade. Participants whose nationals have been implicated in the smuggling of Marange diamonds should investigate these claims further and provide detailed results to the WGM.

19. Expedited review and consideration of the revised proposal concerning the provision and administration of security in diamond mining areas.

20. Outreach by the KP and individual participants, as appropriate, to encourage Mozambique to improve border control and consider joining the KP as a means to combat smuggling efforts.

21. The WDC should work with MMCZ to ensure full compliance with and implementation of the System of Warranties.


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Russia Decides New Diamond Prices

Russia Stockpiles it's Diamonds

Historical Feature
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Forget De Beers,

Russia to decide diamond prices
2009-05-12 16:35:00

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Commodity Online SURAT/MOSCOW: Diamond polishing units in Surat should now look to Russia for the movements of prices instead of watching De Beers. Till now De Beers has been the market ruler as far as diamonds are concerned. That monopoly has been broken by Russia by stockpiling huge quantity of diamonds in its state-owned company.

According to a report appeared in New York Times this week, Russia has surpassed De Beers as the world’s largest diamond producer. The reason for this is recession. Following the slump, state-owned Alrosa diamond company of Russia has been keeping all its diamonds in its vaults, not selling a single piece. This is a tactics used by China also as far as metals are concerned.

China had adopted a secret policy to stockpile metals like copper and gold during recession and increase its stocks. In that way China has been using the prices crash to its benefit. Russia has also adopted that method now as far as diamonds are concerned. Till now De Beers has been ruling the roost in diamond markets. But, now onwards Russia will decide the price movements of the sparklers as it has the biggest collection in the world.

Global market for diamonds is so dismal that Alrosa diamond company, 90 per cent owned by the Russian government, has not sold a rough stone on the open market since December. According to an NYT report, each day, thousands of diamonds are washed and sorted by size, clarity, shape and quality by this company. It could be years before more people admire these stones.

Now, Russia has become the arbiter of global diamond prices. Its decisions on production and sales will determine the value of diamonds on rings and in jewellery stores for years to come, in one of the most surprising consequences of this recession.

Largely because of the jewellery bear market, De Beers’s fortunes have sunk. Short of cash, the company had to raise $800 million from stockholders in just the last six months.

The recession also coincided with a settlement with European Union antitrust authorities that ended a longtime De Beers policy of stockpiling diamonds, in cooperation with Alrosa, to keep prices up. NYT says, though it is a major commodity producer, Russia has traditionally not embraced policies that artificially keep prices up.

In oil, for example, Russia benefits from the oil cartel’s cuts in production, but does not participate in them. In an attempt to carefully calibrate its re-entry on the global market, without forcing prices still lower, Russia is relying on two things: the Soviet-era precious gem depository — created to hold jewelry confiscated from the aristocracy after the 1917 revolution — and capitalist investors, whom Alrosa hopes will buy diamonds as an investment, like gold.

Until last year, De Beers produced about 40 per cent of the global rough stone supply, and Alrosa 25 per cent. But De Beers, which is prohibited under its European Union antitrust agreement from stockpiling, closed mines in response to the glut in rough stones.

Russia is loath to do that, as authorities in Moscow, gravely concerned about potential unrest by disgruntled unemployed workers, try to keep workers on the payroll. In the first quarter, De Beers reduced output by 91 per cent compared with the previous year. The diversified mining companies Rio Tinto and BHP Billiton also curbed production. Meanwhile, the market for wholesale polished diamonds, worth about $21.5 billion, is expected to fall to about $12 billion in 2009. (Source: New York Times)

Additional Reading :

Russia's Alrosa Fudges Figures " Who is buying, and at what price, are questions which Alrosa’s new management does not intend to answer for the time being." John Helmer

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Russian President Dmitry Medvedev enters through gold doors

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Sunday, November 1, 2009

Russia's Alrosa Fudges Figures

MAGIC! ALROSA CLAIMS COMMERCIAL SALE REVENUES ARE JUMPING, AND YEAR-END PROFIT WILL QUADRUPLE
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By John Helmer in Moscow
Alrosa’s new management, headed by Fyodor Andreyev (right picture), has announced this month that, despite one of the worst years on record for global diamond demand, the Russian company expects to sell roughly the same dollar value of diamonds this year as last, and to earn a bottom-line profit as well.

The announcements of the projected financial results have been posted by dead-drop on wire services or internet sites. Andreyev has yet to answer direct questions from the industry media since he took over the company in July. His spokesman, Andrei Polyakov, does not respond to calls.According to a posting on a Sakha government website last week, the Sakha administration, which holds a 32% stake in the wholly state-owned diamond miner, expects an after-tax profit of Rb1.7 billion ($59 million) to be reported at year’s end. Andreyev was cited earlier on a financial website as saying Alrosa plans to sell $2.75 billion worth of diamonds this year. The announcement did not distinguish between rough and polished.

Andreyev reportedly said that the aggregate was roughly equal to the 2008 sales level, and that the state purchase total has amounted to date to Rb35.4 billion ($1.2 billion). The figure corresponds to an undertaking Prime Minister Vladimir Putin gave, when he visited the Sakha republic in late August. At the time, Putin said the state stockpile agency Gokhran would receive between Rb30 billion and Rb35 billion from the federal budget for purchases of diamonds from Alrosa this year.

Alrosa’s annual report for 2008 reported that its diamond sales in 2008 amounted to $2.3 billion, while the value of production was reported as $1.8 billion.

The new numbers differ significantly from those authorized for release by Andreyev in August. On August 22, according to a company statement following a session of of the Alrosa management board, the target for the year was fixed at total production value of $2.1 billion. After-tax profit, according to that release, was projected at Rb454.4 million (($16 million). In the two-month interval between press releases, Alrosa’s profit projection appears to have jumped almost fourfold. The projection for sales revenues for the year also appears to have jumped 31% ahead of the production value.

A press release by Alrosa, issued on October 9, claimed that for the nine months to September 30, “the consolidated core product sales (i.e. rough and polished diamond sales) of ALROSA Group, including its sales to Gokhran of Russia, amounted to $1.34 billion. In September 2009 ALROSA sold $651.5 million worth of rough diamonds. The largest buyer of the goods was the Russian Federation State Depositary of Precious Metals and Gems [Gokhran]“.

A fresh press release from the company, dated October 22, makes another change in the numbers. According to the “revival in demand in the rough market,” the company claims that in the month of October it sold rough for $351 million, of which $255 million were commercial sales, and the balance of $96 million sales to Gokhran. The statement also claims that in the nine month period, “the ALROSA Group sold rough and polished for a total of $1.730 billion, with nearly $1 billion out of that in the third quarter of 2009.”

There is an unexplained difference of $390 million between the company’s two 9-month release figures. The sales figure for October appears to have fallen by $300 million from the sales figure announced for the month of September.

The company does not release carat data for production or sales, nor does it report average realized prices for rough sales. For the time being, Russian Customs do not issue export data for Alrosa shipments for the 9-month period. According to Ararat Evoyan, head of the Russian Association of Diamond Manufacturers, the price paid by Gokhran to Alrosa for rough is a state secret, but he believes that the Gokhran buying price has been higher than the depressed world market price. Evoyan also says he believes Alrosa has sold more stones commercially for export than on the domestic market to local cutters.

A source close to Lev Leviev’s Ruis Diamonds — the largest diamond cutter in Russia after the state-owned Smolensk Kristall — told PolishedPrices.com that “there are some major transactions ahead” that will boost this year’s rough purchasing total, as well as the value of Ruis’s polished output and sales. The source said also the total value of rough bought by Ruis this year was less than last year, and the value of purchases from Alrosa was “considerably less” than in 2008. According to the source, the Leviev enterprise did not buy any Alrosa stones until September.

A source at Gokhran said that state funds have also been spent this year on buying polished from Smolensk Kristall to a value, to date, of Rb2 billion ($69 million). He said that a joint panel of Gokhran and Alrosa valuers reviews the pricing for all transactions. “In most cases,” he told PolishedPrices.com, “Alrosa’s pricing is correct.” In 2010, he said the state budget projects purchasing by Gokhran of diamonds for the same amount as was spent this year.

The implication of the latest target figure from Andreyev is dramatic. This is that commercial sales of diamonds by Alrosa will exceed the state purchases for Gokhran, and are expected to reach $1.6 billion. Who is buying, and at what price, are questions which Alrosa’s new management does not intend to answer for the time being.

by John Helmer - Thursday, October 29th, 2009

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Tuesday, 27 Oct 2009
Interfax reported that Alrosa sold USD 1.73 billion in cut and uncut diamonds in January-September 2009.

Alrosa sold USD 1 billion in diamonds in the third quarter alone.

Alrosa has sold USD 351 million in rough diamonds USD 255 million of this on the market since the start of October.

Alrosa stopped selling diamonds on the market in December last year. It sold rough diamonds only to the State Precious Metals and Gemstones Repository until July when it returned to the market. Alrosa sold USD 150 million in uncut diamonds on the market in July mostly under long-term contracts.

A source at the Gokhran has told Interfax that the repository bought an additional RUB 20.4 billion in diamonds from Alrosa in September and that total its total diamond procurements from had been increased to RUB 32.5 billion in 2009.

Mr Fyodor Andreyev chief of Alrosa said last month that overall sales this year could come to USD 2.75 billion.

The company also said it intended to reduce its debt which stood at USD 5 billion on June 1st to USD 3.86 billion by the end of 2009.

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Zimbabwe's Deadly Diamonds Ignores Kimberley Process

Zimbabwe President Robert Mugabe arrives for the burial of a prominent member of his party, Misheck Chando, in Harare, Saturday, Oct. 31, 2009. Mugabe says he is committed to working with his estranged prime minister despite his assessment that the former opposition leader is "not mentally stable" for boycotting the coalition government. (AP Photo/Tsvangirayi Mukwazhi : Zimbabwe: Mugabe takes sharp dig at Tsvangirai



" In a classic case of a despotic ruler taking over state assets to hold onto power, Mugabe, the guerrilla hero who drove out the British and the ruling white minority from the former Rhodesia in the 1970s to become president in 1980, allegedly used the funds from illegal diamond sales to buy the loyalty of his army "
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President Robert Mugabe delivers his speech at the burial of a prominent member of his party Misheck Chando in Harare, Saturday, Oct. 31, 2009. Mugabe took a swipe at the Zimbabwean Prime Minster, Morgan Tsvangirai, for disengaging from government, accusing him of being dishonest and never to be trusted. (AP Photo/Tsvangirayi Mukwazhi)

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The return of the bloody diamonds:
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Miners at gunpoint in Zimbabwe
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In a remote corner of Zimbabwe, the true worth of a vast new diamond field emerges. 's response? To allow his mutinous military to enslave villagers as miners and seize the profits - and destroy fragile protocols against blood diamonds.

Foreign Reporter of the Year Dan McDougall and photographer Robin Hammond risked their lives to get dramatic first-hand evidence of the unimaginable suffering of the miners for Live magazine. Their despatch poses the question - can you go into your local jewellers with a clear conscience ever again? By DAN McDOUGALL September 2009

Diamond miners are being used by the military and police to extract stones despite threats from the Kimberley Process of sanctions against Zimbabwe for the practice. Above

The mailashas emerge as cautiously as impala from the shadows of scorched yellow kikuyu grass that fringes the long highway to Mutare. Their name translates as 'smugglers'. It's our first sight of them. There are three in all and they're no more than 14 years old.

They reach out into the road at the approach of our slowing BMW and take a deadly gamble, forming their fingers into a distinctive diamond shape. In their damp palms are tiny grains of diamond. They have chosen the final thralls of dusk - a time of shadows and distraction, when the sights of army patrol rifles are blinded by the vast and sinking orange glow in the sky - to make their sales pitch to a car full of strangers.

Clicking off from his mother-tongue, Shona, our translator throws down his mobile phone in a panic and shouts at me to drive on.

'We mustn't stop,' he screams. 'They'll be dead in a week. The road is littered with the bones of smugglers. They are signing a death warrant by sticking their necks out on this cursed road.'
We've driven ten hours from the South African border in a fog of frayed nerves and off-road diversions to avoid army checkpoints. Posing as black-market diamond traders, we're travelling towards the very hell they are fleeing: Zimbabwe's Wild East. Here, within hiking range of the road we're driving, are the remote diamond fields of Marange, shallow earth mines uncompromisingly controlled by Robert Mugabe's henchmen.

The full extent of the diamond fields in eastern Zimbabwe became clear following discoveries made in June 2006. They're vast - 400 square miles - making the scrubland amid the bleakly beautiful mountainscape possibly the world's biggest diamond field. The finds were made by British prospecting firm African Consolidated Resources (ACR). It had just taken over the rights to explore the area from De Beers, which had failed to renew its mining licences despite having found diamonds before 2006.

A miner holds up a diamond he's attempting to sell behind the backs of the military and police. Above

There was an outcry in the West. Critics such as Global Witness claimed ACR was making little more than a Faustian pact with Mugabe, the most vilified leader on the African stage.

Maybe it was fateful, then, that in September 2006, Mugabe's Zanu-PF government reneged on the deal and seized back the mining rights to the region. When Zimbabwe's hyper-inflation made army pay almost worthless, soldiers rioted in the capital Harare.

Without the patronage of the military, Mugabe faced losing power. Against the ruling of the country's courts, he ceded mining operations to the direct control of the police and army.

Amid public confusion over ownership, a diamond rush began around the Marange fields. Over 10,000 illegal artisanal miners invaded the site and began working small plots. But by January 2007, the governor of the Reserve Bank of Zimbabwe, Gideon Gono, warned that the country was losing up to $50 million a week through gold and diamond smuggling.

The diamond industry is a licence to print money for the military. With guns, brute force and a terrified population, everything runs like clockwork

The response of both the police and, in particular, the army to bring their interests under control was brutal. Launching Operation No Return in October 2008, the army ordered a shoot-on-sight policy, killing hundreds of illegal miners. Men were strafed by helicopter gunship, and a cordon was set up around the diamond fields. As many as 10,000 villagers living near the fields were relocated 15 miles away.

The army then set about doing the unthinkable: recruiting those same villagers under gunpoint and forcing them to dig for diamonds. This is the situation that remains today.

The UN is the only international body that can isolate pariah nations dealing in 'blood diamonds' - stones produced in conflict zones - and salve our consciences when we buy jewellery. It's backed by the Kimberley Process, whereby diamond-producing and trading nations commit to strict self-regulation to keep blood diamonds out of the world's supply.

As a Kimberley Process review panel prepares to rule on Zimbabwe's future as an exporter of gems, a Live magazine investigation has uncovered shocking first-hand evidence of the violent enslavement of alluvial miners in the eastern badlands of the former British colony. These men, women and children are being forced at the barrel of a gun by soldiers to dig out tiny diamonds from the earth with their bare hands, to pay the troops' wages and thereby keep Mugabe in power.

A miner in Zimbabwe tunnels into the ground . Above


Our report, which we're submitting to the review panel, comes just weeks after the Zimbabwean government assured the world its diamonds were ethical. The situation as it stands makes a mockery of the Kimberley Process.

The young men stand at the roadside shaking. The youngest, weeping with fear, shouts and pleads with his captors. His mouth is foaming. Heknows that this is just the beginning of his torment. Handcuffed together and forced to lean against a baobab tree, their trousers at their ankles, blood streams down their buttocks - a common sight in war zones: a humiliation and a warning to others. The soldiers sit nearby smoking cigarettes, waiting for the truck to come so they can carry on their torturing in private.

Everyone on this road is suspected of being a diamond smuggler. The road to Mutare has become one of the most militarised in all . Army checkpoints scar the highway at 500-yard intervals. Everywhere is the detritus of soldiers: cigarettes, moonshine bottles and bullet casings. Scorched earth from cooking fires stains the lay-bys. At regular intervals, women stand behind pulled-over buses, their hands stretched in the air as their private parts are invaded and frisked by scruffy soldiers and radicalised youngsters from the Zanu-PF's youth training centres.

The youngest, weeping with fear, shouts and pleads with his jailers. His mouth is foaming. He knows that this is just the beginning of his torment

According to a 2009 Human Rights Watch report, army brigades are now being rotated in the Marange region to satisfy senior ranking officers from different divisions so that more soldiers can profit from the diamond trade. The same report also states that villagers from the area, some of them children, are being forced to work in mines controlled by military syndicates.
At times you can almost make out the word ' diamonds' in slow-motion on their lips as the young soldiers ruthlessly tug at bra straps, sexually abusing, humiliating and tormenting their subjects. The motivation for the police and military to stop the flow of smuggling is simple and calculating: diamonds are their domain.

We are posing as diamond buyers from , and are on the road just south of Mutare, the provincial capital on the border. At each checkpoint the car is painstakingly searched. The soldiers will then pull us aside and produce small gritty slivers of diamond from hidden belt pockets in their military fatigues. The going rate for poor stones is $35 a gram. In the West, the price would be 20 times as high.

Diamond miners in the Marange fields scrape through dirt trying to find stones. Above

The closer we get to the mining fields the purer the stones become and the more our translator warns us our lives are in danger. Even with our cover as diamond dealers we are out on a limb here. At each checkpoint the soldiers tell us that most of the dealers are black - Nigerians.
We decide the only safe way for us into the diamond fields is to park ten miles away and hike into the bush at 4am. As we set off, in the darkness, everyone is terrified.
'If we are caught they'll shoot us and bury us in the bush until our bones are ready to be taken away elsewhere,' our translator says, on the verge of tears.
Heading to the diamond field of Chiadzwa, in the Marange district, we hear in the wilderness a pack of wild bush dogs ripping apart the carcass of one of their own. Hunted down by forest-dwelling illegal diamond prospectors and with no prey on which to feed, the desperate beasts have turned to cannibalism.

After three hours we're entering Chiadzwa's alluvial mine fields; a further three hours in the bush, doubts set in and the fear that we're lost deepens. We continue for five hours more even though we run out of water and are forced to drink from bore holes, where donkey droppings float on the surface of the water. Faced with sunstroke, there's no alternative. Finally we come across a group of illegal miners, each panning the parched, sandy earth.

From below the mountainside where we're standing, others emerge like shrews from holes in the ground, their black faces stained with grey dust and sand, their bloodshot eyes illuminated by dripping wax candles. They are some of the thousands of miners in the region who dig through the earth with blunt pickaxes and bare hands.

Some of the men and women who scrape through the dead earth here call the area the 'Eye' - as the mine gets more challenging and dangerous, the further you're drawn into it.
Most, without irony, call it churu chamai Mujuru - Mrs Mujuru's ant-hill. Mrs Mujuru is the country's Vice President and wife of its former army chief, General Solomon Mujuru. She is well known for her fondness for diamonds.

The dream that forces the miners to take extreme risks is not just a simple frosty-grey stone. They believe diamonds can bring liberation from their bonded status. Success is a stone no bigger than a newborn child's thumbnail; that's the price of freedom.

Like all miners in the region, these people are now working in small syndicates for the Zimbabwean military, each team satisfying individual soldiers who must pass the best gems further up the chain of command. According to the Human Rights Watch report, the syndicates are being operated with the full sanction of the Harare government.

The report says that at a time when Zimbabwe is struggling to pay civil servants and soldiers a stipend of barely $100 a month, the extra income from diamond mining for soldiers is serving 'to mollify a constituency whose loyalty to Robert Mugabe's Zanu-PF, in the context of ongoing political strife, is essential'.

One of the miners, Jona, emerges from the ground shrouded in dust, looking like a ghost. At first, startled by our presence, he moves to run but he stretches out his palm for a few South African Rand in return for conversation.

'We have no choice but to do this,' he says. 'The soldiers rounded us up in the night and they have threatened to kill our families. It's always the diamonds. What do they mean to people in the West? What do they mean to you when my people, the Manyika, are dead men walking?'

The ever-present Zimbabwean military guard the outskirts of a rally in support of President Robert Mugabe. Above

He contemptuously spits out bitter peanut shells.

'We are forever in the eye of our killer: the Zimbabwean army sniper, the policeman, the spy. Our enemy is brutal but we must feed our children and mining here in the darkness is the only way out. It is pitiful and many of us have been killed but what else can we do?'

Jona says the biggest stone he has found in the fields was several years ago - from his rough description, a diamond of around 2.20 carats.

'We worked for the police back then and things weren't as intense, so we could get stones out. I sold that one for $200 to a businessman from Harare. You could see through a corner of it like a piece of glass.'

I tell Jona his stone might have fetched as much as £7,000 in Antwerp or . He shrugs and kicks the ground at his feet.

'It was my chance to get out but I had to split the money and then, later, the police came to my house and took most of the rest. I was left with about $100 and they beat me to find that but I didn't give in. They hit my kidneys with batons over and over again. I passed blood for months and couldn't walk. But I kept my money.'

As we speak, a second miner in his mid-twenties approaches us and waves his pickaxe mockingly. He refuses to give his name but allows us to photograph him digging. He bears the scars and sorrows of a man three times his age. In his cracked hands are a few tiny grains of what looks like glass: tiny diamond slivers, practically worthless. He seems to think we are making a purchase, so he eggs us on to handle the miserable grey stones.

The soldiers stabbed me with their bayonets and beat us to the point that I couldn't feel pain any more

'We've been working this site for a month but found only a few diamonds. Further up the valley there is more promise - there we use shovels to dam off small sections of the streams. There are bigger diamonds in the centre of the Eye but the military hover over everyone there at gunpoint, watching the miners like hawks. When they are done, they search mouths, anal passages and even rip open wounds to see if miners have hidden stones in their flesh.'

As the man speaks the rain suddenly comes down hard, washing the blood-red mud from the ground over his bare feet.

'You must go,' he says. 'If they find you here they will kill us all.'

Just as the history of the Arab Gulf states is tied to the region's oil, the discovery of diamonds in Africa has shaped the continent's borders and remains one of the leading causes of conflict. It is no accident that Africa's most war-torn countries of the past decade - Sierra Leone and the Democratic Republic of - are also among its most diamond-rich nations, as well as the poorest and least developed.

In 2000 the UN responded to international outrage over illegal trade in blood diamonds from despotic nations such as and Ivory Coast by creating the Kimberley Process Certification Scheme (KPCS). It requires all exporters to register their diamonds with their respective governments before any can be certified legal and shipped abroad with the paperwork.

Since then, mostly through clever marketing on the part of the diamond industry, the issue of blood diamonds has largely fallen off the political agenda. This is despite the appeals of pressure groups such as Amnesty International and Global Witness, who claim the problem is still a long way from being resolved.


The reality is that across the African continent, millions of miners - many of them children - continue to scour the earth at gunpoint looking for gems. Most of those that are found are sold well below their market value to illegal diamond traders.

The stones are then smuggled out to cutting centres around the world, without tax being paid. This means that none of the benefits of such mining find their way back to the people of Africa. Where they are mined responsibly -

, , - diamonds can contribute to development and stability.
Where governments are corrupt, soldiers pitiless and borders porous, the stones remain agents of slave labour, murder, dismemberment, displacement and economic collapse.

Miner Tendaimoyo shows the scars he claims were inflicted by soldiers during a punishment beating. Above


Today in Zimbabwe, diamonds are continuing to destroy lives. But until the international community brands these gems as 'blood diamonds', stones from one of the world's most troubled nations will continue to find their way on to London's Bond Street.

In some respects, Zimbabwe's soldiers have a tough job keeping track of their prized assets.
Diamonds are tradeable and portable; they can be mined with a pick and shovel in many places. They also can be smuggled in many of the ways drugs are not. With diamonds there is no odour to aid border guards with dogs. Over the years, diamonds have been ingested, concealed in body cavities, hidden in wounds. Desperate people do desperate things - and never more so than when there is the prospect of riches in place of utter poverty.

A diamond rush - as has taken place in Zimbabwe - happens for a reason: people who live around the alluvial fields are starving and desperate.

'Young men cannot bear to watch their mothers, sisters and wives starve to death,' says our translator.

But those same factors that see miners lose diamonds to the brutal middlemen also work in their favour. On an international scale, tracing stones is virtually impossible.

, executive board member of the Diamantkring, one of Antwerp's four main diamond exchanges, said recently that regardless of protocol and the regulations imposed by the Kimberley Process, his entire business depended on trust. If diamonds have been smuggled by African rebels and re-packaged elsewhere he'd never know about it.

Eli Haas, president of the

Diamond Dealers' Club, goes one step further.
'There is no way to tell where a diamond comes from. Diamonds don't have identifying marks and probably never will. You just can't look at a diamond and say, yes, it comes from Sierra Leone or the Congo. Only God knows this.'

A lawyer in Mutare, Zimbabwe's diamond capital, said, 'The diamond industry is a licence to print money for the Zimbabwean military. With any commodity in Africa, it's about securing your logistics and export routes. You run the army so you control the people, turning them into slaves to dig the earth for diamonds.

'You own the highways and control the checkpoints so getting the diamonds out is even simpler. Army and police lorries have the rule of the highways so getting to the borders, South Africa in the south or Mozambique in the east, is never a problem. You control customs on one side and bribe officials on the other. With guns, brute force and a desperate and terrified local population, everything runs like clockwork.'

We've been directed to a remote village at the edge of the Chiadzwa field. We enter the compound but there's a ghostly silence. The residents have long gone, beaten out of their homes by the military and moved 25 miles away. But a whistle goes out: watchmen looking out for soldiers. In a small hut we find Tendaimoyo. The search for his story has brought us as deep into the bush as we can get.

'We can live here by day, and then at night we go out and dig,' he says. 'But we change it around. I know what happens when we get caught digging outside the syndicates.'

As we speak, Tendaimoyo pulls down his trousers and bares the livid scars that cover his buttocks - the aftermath of a brutal army baton attack.

Sometimes reporting from Africa is hard; unless you have seen it for yourself, you are wary of fully accepting any account at face value. But these wounds are unmistakeable; they are raw and open and stand out against his skin. He sits in excruciating pain and tells us he is not finished. On his chest there are puncture marks from knives and through his kneecap a piercing hole - an open wound the size of a golf ball.

'The soldiers came here and found us at a digging site close by,' he says. 'We were working for them at that time but they told us we had produced no diamonds and we deserved to be punished. They gathered a crowd around me and stabbed me through the leg with their bayonets.

'Another of our group was stabbed in the stomach. They then beat us to the point that I couldn't feel the pain any more, and exposed our buttocks like they were playing a game. I looked at my two friends on the ground across from me. Their legs were streaming with blood. One of them had died, and blood was streaming from his eyes and ears. I passed out.'

In the dark recesses of his hut, Tendaimoyo is boiling traditional madhumbe, a wild indigenous tuber root found only in the foothills of Chiadzwa.

'My journey here was for my family. I was a cow herder but the owner of the cattle died, and the army took his animals for food. Then the army told us they wanted our land for mining so they poisoned our water to forcibly relocate us. Our only chance is here in the dirt. I have nothing to lose. They almost killed me before. As I lay on the ground I made my peace with my family - but they stopped.'

Tendaimoyo told me he had also survived the helicopter strafing by the Zimbabwean military.
'When the helicopters first came they dropped tear gas for the first hour. Then they started shooting. People were running wildly everywhere, stumbling over the dead. I saw children die. After it was over, they moved in with dogs and I witnessed women being bitten to death.
'They raid us every week now, even though 90 per cent of the miners here work for them as slaves. The raids are part of a circus, normally to empty the fields of workers so foreign inspectors cannot interview them.

'Now the army carries out raids - small units go out and target miners who aren't cooperating. They don't shoot them - they beat their kidneys until they bleed and the men pass out and die. Their bodies are put into holes and covered up. The site is then made off-limits and when the army comes back round again to remove the bones, the flesh has been eaten by insects and rats.'

Diamonds are tradeable and portable; they can be mined with a pick and shovel in many places.Above

At least a dozen miners interviewed by Live claimed that plain-clothes officers from Zimbabwe's Criminal Investigation Department had started the diamond rush by turning up in the Mutare area with suitcases full of freshly printed notes. The men said they'd been given the money by Gideon Gorno, the head of Zimbabwe's fragile banking system. At the time they claimed to be representing a government company called Fidelity. But there is no record that such a body ever existed. According to the miners, the difference between selling black-market diamonds to the Zimbabwe CID in 2007 and the situation today is their freedom to move.
'We are in a locked-down world,' says Tendaimoyo.

'Everywhere there are patrols looking for diamonds. Women are intimately searched, men have teeth pulled out with pliers as a warning to others not to smuggle diamonds in their mouths.
'Before we were being exploited by corrupt politicians making a killing from our stones. Now we're prisoners and slaves. Things were better before. Each day they get worse. I was almost killed a few weeks ago and each day others like me are abandoned in the bush, eaten by dogs, unable to crawl out of the pits.'

As we hike out of the bush in the dusk, the journey is fraught and terrifying. At each rustle of grass we hit the ground, waved down by our point man. Suddenly we come across a village, somehow bypassed in the clearances. From the valley below the sound of prayer and penitence is floating across the air from the river. At the bank a dozen middle-aged women are gathered in the water in the red glow of evening. Their skirts, branded with biblical passages and proclamations to the Lord, are wrapped up to their knees in the murky water, exposing their heavy-set legs. The pastor is dunking one of their number into the water, time and time again, to rapture.

As we pass them, their hymns are lost to the noise of the bush. Mice biting and scratching, insects buzzing and in the distance the violent crack of a rifle firing somewhere in the remote hinterland.

Everyone holds their breath.

The Limpopo River flows before me precisely as Rudyard Kipling once found it: 'Grey-green... greasy... set about with fever trees.' On a distant bank, from the stumpy shadows, come the refugees - a long and familiar string of terrified Zimbabweans clutching overflowing plastic bags stuffed with clothes, Bibles and dreams of a new life in .

An untamed no-man's land of smugglers, corrupt security forces and a never-ending flow of illicit human traffic across from the third world to the developed world, it is boom time in the drab South African border town of Musina, a remote community that has found itself at the centre of one of the world's worst refugee crises.

Today South Africa's borders are a shambles. There are just 190 police officers to control 2,300 miles of coastline and 283 officers on its 3,000 mile-long land border. As a direct result, there are between three and five million illegal immigrants in the country.

A 2008 report by South Africa's Auditor-General found no specific border intelligence had been carried out since 2004, nor has there been any specialised training for border control. Land points of entry either have insufficient or no critical equipment such as baggage scanners, CCTV cameras and hand-held explosive-detection systems. Where these are in place, they are often not used.

For the Zimbabweans fleeing oppression to a life of menial labour such incompetence is, in a perverse way, a godsend, at least if they can live long enough in South Africa without being assaulted and extorted by the police and xenophobic mobs. For diamond smugglers it is similarly an easy route out with gems.

At Musina's United Reformed Church the pews are packed with Zimbabweans praising Jesus. Some, despite their devotion, are full-time smugglers, members of trafficking syndicates such as the Maguma Guma gang, who 'help' hundreds of border jumpers trying to cross illegally into South Africa every day.

Using their contacts to pay off Zimbabwean security officers, the gangs bypass immigration and assist jumpers to cross the river on the underside of a disused train bridge at the Beitbridge border crossing. On the South African side of the border, they have cut holes in the three barbed wire fences. Using mobile phones to alert one another, they wait in the bush until army and police vans patrolling the border have passed and give the signal for jumpers to run through to the other side. This is all for a negotiated price of around $10.

Outside Musina's church, Mutseti Savo, 32, claims he lost both his house and his job in Mugabe's continuing Operation Murambatsvina ('Drive out the rubbish'), in which soldiers, police and ruling-party militias used murder, rape and violence to destroy the homes and small businesses of hundreds of thousands of poor people living on the outer edges of Zimbabwe's towns. Like many others who lost everything, he drifted east to the diamond fields.

'I know blood diamonds are all about war but there is no war in my country - except for a government that fights its own people. Unemployment and starvation lead you to do desperate things, to put your life on the line. Diamonds, gold, drugs... anything to get by and keep your family alive. In Zimbabwe there is no right and wrong any more, there is eating and starving - even now, when the West claims everything is good again. This is a lie.'

In the background a large group of Zimbabwean women sing hymns and choruses in Shona. I ask what they mean.

'These people are good Christians but even Christians can find it hard to forgive,' says Savo.
'These are not hymns, they are anti-Mugabe songs that are illegal back home. There they would be shot for singing such songs.'

As we walk away Savo sticks out a long pink tongue. Underneath is a tiny black diamond.
'OK, we've talked now. How much will you pay?'

The Kimberley Process:

Can it still stop the flow of blood diamonds?

From offices in New York and Tel Aviv, the movers and shakers in the international diamond community have looked on and listened to the information coming out of Marange with typical reticence. As Zimbabwe is a participant in the Kimberley Process, which regulates trade in diamonds, its diamonds continue to enter the trading markets of London, Antwerp and Dubai with the full sanction of the industry.

Many within the industry believe the horrors of Zimbabwe's diamond fields could sound the death knell for the Kimberley Process, which was established in 2003 to stem the flow of blood diamonds.

'The Kimberley's credibility is suffering at the moment,' says Annie Dunnebacke, a campaigner for Global Witness.

'If the Kimberley Process can't suspend a participant in those conditions (in Zimbabwe), then what's it even there for?'

Critics claim that part of the problem lies in the structure of the organisation. The scheme is voluntary and based on consensus being reached among participating countries, allowing political and commercial ties to come into play.

For example, the annual rotating leadership of the Kimberley currently has Namibia at the helm. Zimbabwe recently signed a uranium mining memorandum of agreement with Namibia, one of the world's largest uranium exporters. Zimbabwe, meanwhile, is believed to have uranium reserves worth billions of dollars. Source
*

Additional Reading :

Kimberley Process Moral Corruption

Zimbabwe Diamonds Still Kill Despite Failing Kimberley Process

Mugabe Wants His Cake & Eats It Too

Blood Diamonds Plugging the Gaps

Chinese Apartheid in Africa

Dubai and Angola Explore Opportunities

Kimberley Process Certification Scheme : The Farce Continues :" The KPCS falls under the management of the DMCC " : Chaim Even-Zohar

The DMCC Special Report*UAE and China forge diamond links" In what is being hailed as a “new-age Silk Road”, delegates at the show cited strengthened ties between China and the Middle East in industries far beyond jewellery "

Kimberley Process Failing Part 3

Interview with Ian Smillie:Why He's Ditching the Kimberley Process

Kimberley Process Certification Scheme's Relevancy


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Saturday, October 31, 2009

De Beers Implements Cost Cuts

De Beers vs. the Turkeys:

Who Won?

A turkey is much more than just a bird. At De Beers, the turkey has become a symbol – since time immemorial, employees in London and in Maidenhead always received a turkey around Christmas as a tasty reminder of their employers’ appreciation. Recently, though, rumors had been circulating around De Beers that the annual Christmas turkey gift may be discontinued this year as a cost-saving measure. The rather courageous global communications manager Lesley Coldham e-mailed senior managers that there won’t be any turkeys this year. “We will not be issuing a formal statement to staff about the turkeys (given the effectiveness of the rumor mill), but I have prepared a statement for you to use either in response to comments and questions from your staff, or proactively as part of a team briefing/email,” she wrote
*
Lesley’s astute advice to managers is to give the following reason: “As we approach the end of the year the question of the company's traditional Christmas turkey gift is a talking point for many employees. Unfortunately, as a result of the action we took earlier in the year to dramatically reduce our operating costs, there is no budget to provide turkeys this Christmas. While this decision may come as a disappointment to many of you, we hope you will understand that it was made purely as part of our response to the economic downturn earlier in the year, and is consistent with our effort to lower our cost-base wherever possible during unprecedented times.”
*
This is not a story for the birds. One cheerful employee that I talked to laughed it off saying this was a great humanitarian act on behalf of De Beers. “A few hundred turkeys will have another year to live,” this employee reasoned. Others find it incomprehensible that a company like De Beers could not find £6,000 at Christmas to buy something like 300 turkeys that may cost £20 each.
*
So, in London, in a year that started with an announcement of a 25 percent staff cut, where many staff members were for a few months “employees at risk” (of being made redundant), those who survived it all will now be denied their turkeys.
*
The Pendulum Comes Full Swing
*
I find the turkey story intriguing from an entirely different perspective. There are many comments about how De Beers has changed and even more comments about how the company hasn’t changed all that much, even while shedding its custodian role of industry leadership. Many changes have not been as profound as the company would like to believe, others were truly revolutionary. One thing is for sure – in some areas, its crucial change has been going from one extreme to the other. Nothing is more telling than this turkey story.
*
Ten years ago, I was interviewed by Bain & Co., which was conducting the strategic review for De Beers that ultimately transformed the company. Gareth Penny, just having arrived from South Africa, was in charge of the review. I was interviewed (in the presence of a De Beers official who took notes) and, almost in passing, I remarked that I would measure Bain & Co.’s success by their ability to get rid of the Christmas gift tradition by which De Beers’ clients were told by their brokers (with the exception of one broker) that they must bestow upon De Beers’ managers boxes of their favorite wines.
*
This gift-giving tradition worked as follows: the client would send a nice Christmas card to his favorite De Beers executive wishing him the very best for the next year and informing him that a box of wine had been reserved for him at his favorite winery. (There were some four or five wineries involved). Some De Beers managers amassed credits in their wine accounts in five- or six-digit figures.
*
Later that year, the De Beers Executive Committee briefly pondered the wisdom of that policy – and it was decided to leave it in place. Clients were eager to have an opportunity to express their appreciation to managers and therefore they should not be denied such an opportunity, it was argued. Moreover, it was tradition.
*
Eventually, with the implementation of the Bain & Co.’s recommended strategic plan, yet still before the launch of Supplier of Choice, the wine-giving practice was discontinued. (Personally, I believe it was done more for tax reasons than for anything else, but that is not relevant today.) The cancellation of this practice was part of an enormous change in attitude of the company and its employees. A cultural transformation was beginning.
*
De Beers then became a marketing and service company. Its clients became far more important as stakeholders, coming second only to shareholders. Enormous funds were invested in getting employees to accept and internalize a different environment. No details were missed. For example, in South Africa, at De Beers’ new headquarters in Johannesburg, suddenly there was one dining room for all employees instead of an exclusive, separate one for certain executives. That may sound normal today, but to De Beers, this was revolutionary.
*
Throughout the years, employees were sent to courses where they were fully taught – some say indoctrinated with – the new values that the company embraced to instill competitiveness, personal responsibility and other ideals. Today, these values are called “Living Up to Diamonds,” which are the principles, “that define the way we do business, inform our understanding of what is right and wrong, and describe what is important to us,” to quote a company publication.
*
The Price of Cost Cutting
*
The cost cutting forced on De Beers and on each and every one of us by the global financial crisis is part of the overall transformation that has been taking place in De Beers over the better part of the second half of this decade. Cost cutting can also be taken to the extreme. One might possibly argue whether sacrificing the company turkeys means that De Beers has swung the pendulum too far to the other extreme.
*
From our vantage point, I don’t know at what level this cost-saving decision was made. I assume it wasn’t done lightly and must have been agreed upon by De Beers’ top management. If it was a multi-level decision, the official deserves to be saluted. He or she has shown that all these training courses did not fall on deaf ears.
*
To me, however, it underscores the massive changes that are taking place in the company within less than a decade. Normally, when the pendulum swings from one extreme to the other, ultimately, it will slow down and end up somewhere in the middle. The turkey message, however, will not be lost on anyone.
*
In the final analysis, it won’t be a bad bet to assume that though the birds won this year’s battle of the turkeys, it won’t happen again next year.
*
THURSDAY, OCTOBER 29TH, 2009, CHAIM EVEN-ZOHAR

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Thursday, October 29, 2009

New Meiji Techno Microscope

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