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-----

De Beers Diamond Monopoly


Those "Blood Diamonds" from Sierra Leone


If we don't control them, they're bloody.

THE sale of "blood diamonds" from Sierra Leone could cause a backlash against
the industry, De Beers, the mining conglomerate, said yesterday.

Sierra Leone's eight-year civil war has been fuelled mainly by the sale of
diamonds from the east of the country, now largely controlled by the rebel
Revolutionary United Front. The mines are the cause of much of the conflict.

De Beers, which controls almost 70 per cent of the world's diamond trade, has
not sold any from Sierra Leone for 15 years. It says the only stones it sells
come either from mines it owns itself, or from those in Canada and Russia. It
no longer buys from dealers, who have been known to mix stones from war zones
with those from legitimate sources.

But critics of the diamond trade say the other 30 per cent is open to abuse.
Diamonds have often been smuggled from eastern Sierra Leone across the border
into Liberia, where corrupt government officials certify them as Liberian.

Calling for tighter self-regulation by the industry, Gary Ralfe, a spokesman
for De Beers in London, said yesterday that Sierra Leone, though accounting
for only one per cent of the global diamond trade, was the rotten apple that
spoilt the barrel.

De Beers has welcomed British moves to seek a United Nations resolution
banning the sale of diamonds from Sierra Leone. But the country is the scene
of only one of a number of conflicts in Africa fuelled by gems. Angola is
another. Half a dozen countries, including Zimbabwe, are involved in a civil
war in the Democratic Republic of Congo, in which diamonds and gold are the
main prize.

Britain has criticised plans by Oryx Diamonds, a mining firm linked to
Zimbabwe's government, to exploit a diamond concession in Congo. President
Robert Mugabe has sent 11,000 troops to Congo to support the government
against rebels. In return, Zimbabwe has been awarded major concessions in the
mineral-rich regions of central Congo.

Last September, Zimbabwe's army formed a company, Osleg, to run mining
operations and has since arranged a partnership with Cosleg, a joint
Congolese-Zimbabwean enterprise. Oryx Diamonds, which is trying to get a
London Stock Exchange listing, is involved.

After selling the precious stones, it will keep 40 per cent of the profits
and channel 40 per cent to Osleg and 20 per cent to Cosleg. Mr Mugabe's
government aims to use any profits from Osleg to fund the military operation
in Congo.

Oryx denies that its concession is in a war zone. It says it is acting
legally and the project will bring investment to the region. If there were
any sanctions in place it would abide by them.
The Electronic Telegraph, June 8, 2000
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