Dubai diamond syndicate exposed…

 

…Perm Sec, diamond bosses implicated

A civic rights activist has exposed how United Arab Emirates intentionally weakens diamond producing African nations’ internal control systems by targeting decision makers, to buy diamonds at cheap prices.

Centre for Natural Resource Governance (CNRG) director Farai Maguwu, says this system was employed in Zimbabwe resulting in the loss of billions in potential revenue from diamonds, estimated at $15 billion.

CNRG said targeted African officials and mining executives are appointed as Board Members of the Dubai Diamond Exchange (DDE), a subsidiary of Dubai Multi Commodities Centre (DMCC) which can be equated to the Minerals Marketing Corporation of Zimbabwe (MMCZ), for sinister reasons.

CNRG claims South Africa and Namibia have also fallen in the trap, with its mines officials appointed to the DDE to undervalue the precious gems, which are sold at over 40% profit by the UAE.

In two documents, a letter addressed to President Mugabe and a press release, in possession of 263Chat, Maguwu implicates the Permanent Secretary for Mines and Mineral, Professor Francis Gudyanga as well as Robert Mhlanga former Mbada boss as part of the syndicate.

Maguwu said DMCC serves as a “government entity established in 2002 to enhance commodity trade flows through Dubai, performing several roles which have firmly established Dubai as a regional and international commodities trading hub, according its website.

“DMCC also regulates, promotes and facilitates trade across a range of commodities including gold, diamonds, pearls, precious metals and tea.

“The DDE websites states that it ‘is a DMCC platform and Dubai Government initiative which brings the Middle East diamond and coloured stones markets together’.

“Similarly our own Mines marketing firm’s website states that ‘MMCZ markets directly in some regional and international markets e.g. Diamonds to Belgium, India, Dubai, RSA’.  It means Secretary Gudyanga is performing identical roles in Zimbabwe and Dubai – which makes him a potentially conflicted person,” he said.

“Interestingly Professor Gudyanga was appointed to the DDE in 2013 immediately after his appointment replacing his predecessor Mr Prince Mupazviriho who had been a board member of the controversial outfit.

“It is therefore not a surprise that UAE has been appointing serving African mining officials to the Dubai Diamond Exchange. Interestingly, according to their website, the UAE also appointed Zimbabwe’s former Permanent Secretary in the Ministry of Mines, Mr. Prince Mupazviriho, to the DDE Board in September 2013. As soon as Mr Mupazviriho left the Ministry of Mines he was also replaced on DDE Board by the in-coming Secretary Prof Gudyanga.

“This means UAE is not targeting individual skills as they claim on their website but rather decision makers in the Ministry of Mines in Africa,” reads part of the expose.

CNRG further called on “serving African government officials and mining executives to step down from the DDE on African government officials and diamond mining executives to step down as Board Members of the Dubai Diamond Exchange (DDE) for ethical and professional reasons.

“The same controversy surrounds the appointment of Dr Robert Mhlanga, Chairperson of Mbada Diamonds, to the Dubai Diamond exchange Board in 2014.

“The appointment of African government officials and mining executives raises the question of whose interests they serve on the DDE their country’s, the UAE or their own? In the case of Zimbabwe these appointments did not prevent the looting of $15 billion from Marange diamond fields,” claims CNRG.

It added that, “The UAE has unfairly benefited from Africa’s diamonds by purchasing diamonds at a bargain price and re-evaluating the same before re-exporting them to other jurisdictions. In the end Africa is getting peanuts from the sale of its rough diamonds. KP statistics from 2013, for example, show that the average per carat value of diamonds entering the UAE was $74.40, yet the average re-export value was $107.05 per carat – a 43.8% increase.

“UAE is a trading centre which makes billions of dollars through importing and re-exporting diamonds some estimates places UAE export gains at more than twice the price of importation.

“It is against this background that we call on serving government officials and diamond mining executives to step down from their positions on the Dubai Diamond Exchange to avoid conflict of interest,” claims CNRG.

According to the Civil Society Coalition mediation proposal circulated to KP members early this year, in 2014, the UAE re-exported  African diamonds at an average of 44% higher than the value at which they were originally imported from African countries – a mark-up four times that of competing trading centres.

Maguwu said with recently received statistics, the revenue loss could even be higher than the $15 billion estimates.

“KP statistics from 2013 show that the average per carat value of diamonds entering the UAE was $74.40 yet the average re-exports value was $107.05 per carat – a 43.8% increase.

“The loss to Zimbabwe could be even more given that for many years it was falsely claimed Zimbabwe’s diamonds were selling at $49 per carat and UAE and India were the main recipients of these undervalued diamonds. It was the Antwerp Tender which raised the value of Zimbabwean diamonds to $76 per carat and thereafter UAE started claiming they would offer better prices for the same diamonds they had always purchased at less than $50 per carat,” stated CNRG.