European Union Lifts Zimbabwean Sanctions To Restore Diamond Mining

zimbabwe diamond mining

The European Union recently lifted sanctions against a Zimbabwe firm that controls some of the world’s largest diamond fields. The Zimbabwe Mining Development Corporation (ZMDC), a joint venture of the Zimbabwean government and private enterprise, is the latest, and largest Zimbabwean company to be removed from the EU sanctions list after many of its decade-old restrictions were lifted on other firms and individuals earlier this year. Additionally, the EU lifted the asset-freeze that had been in effect against ZMDC, which had been blacklisted for allegedly funneling funds to President Robert Mugabe’s ZANU-PF party.

US and EU sanctions were originally imposed against Mugabe and his allies in 2002 on the grounds of political violence, human rights abuses and the failure to hold free and fair elections. The “targeted sanctions” froze the assets of selected institutions and individuals, but did not prohibit trade. In fact, Zimbabwe and the EU did $875 million in business last year, while trade between Zimbabwe and the United States amounted to $110 million. The sanctions were meant to give Brussels and Washington some leverage over Harare and individuals, and companies have been removed from the lists to reward anti-corruption efforts. For example, over the past year, the US removed two banks and the EU removed 81 individuals and eight corporate entities from their black lists to reward the May passage of a new constitution that limited Mugabe’s power Earlier this year, for instance, the U.S. removed two Zimbabwean banks from its sanction list while the EU removed 81 people and eight institutions. The move was meant to commend the May 22 passage of a new constitution limiting presidential powers.

The seeds of this recent ZMDC decision were planted last February, when EU foreign ministers promised to remove the government-allied diamond mining firm from the blacklist in advance of the Zimbabwe’s national elections this past July, should they prove “credible.” The move was intended to encourage a fair and transparent vote, and while there have been widespread accusations of irregularities in the voting process, the reelection of president Mugabe for another five year term has been accepted by the EU as an incontrovertible fact.

The lifting of these sanctions will come as good news to Belgium, which has been one of the strongest proponents of lifting the sanctions against ZMDC. As a hub for diamond processing, the Belgium city of Antwerp is heavily dependent on obtaining raw diamonds or cutting and polishing into high quality gemstones, work it has been increasingly losing out on to lower wage processors in India and China, countries that have less activist positions when it comes to their international trade policies.

Belgian officials estimate that the lifting of these sanctions will increase Zimbabwe’s tax revenues by approximately $400 million annually. ZMDC’s operations on behalf of the government, which include five joint-venture mines in the diamond fields of Marange, yielded exports worth $685 million last year, according to the Zimbabwe Herald, a state-owned newspaper.

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