De Beers' legacy in the country - "A diamond's sparkling beauty: as evocative of a passionate love story as it is of life's incredible journey. Your De Beers diamond is selected to sparkle with the fire of life, reminding you everyday of your love.

"At De Beers we believe that perfection is attainable through the meticulous selection of diamonds that radiate the Fire, Life and Brilliance of nature. Beauty truly is in the eye of the beholder; once you look into the heart of your diamond, you will know that it shines only for you.

"With a peerless heritage that spans 120 years, our unique passion and expertise in creating jewellery with the world's most naturally beautiful diamonds is unrivalled," reads part of a powerful and highly manipulative De Beers online advert.

No doubt - this is a short and irresistible diamond ad that can make your prospect rabid with curiosity and begging for more. The ad is compelling and tells very little about the legacy of this diamond producer which controls about 40 percent of the market for rough and unpolished diamonds.

But burrowing through the history of De Beers in Zimbabwe, one gets a totally different picture.

Zimbabwe has in recent years hit the headlines following the recent discovery of diamonds in Chiadzwa. More than ever before, some prominent politicians in Government got a heavy battering from the media and anti-government critics over the issues related to the Chiadzwa diamonds.

The words used were quite strong and damaging. 'Corrupt fat cats, diamond syndicates, diamond smugglers, blood diamond peddlers' and all were used.

The news about the Chiadzwa diamonds were full of reports about corruption, human rights abuses and killings. This article does not in any way seek to justify the alleged corrupt activities and abuse taking place now.

In addition, this report does not seek to simply alter data for personal gain or to attack De Beers but to provide some insight that challenges the one-sided arguments that paint De Beers as an 'Angel of Diamond' mining in Africa. In this report, I attempt to provide some snippets that challenge Zimbabwe government critics and pro-De Beers mining supporters to screen-out this diamond mining company's history or predisposition for dishonesty.

From a report presented earlier this month by Mutuso Dhliwayo of the Zimbabwe Environmental Law Association at a launch of the Publish What You Pay campaign, De Beers' legacy is simple, but disastrous for Zimbabwe - deliberate dishonesty, cost blowouts and massive understatement of the country's diamond deposits in the Marange area.

"Marange Diamonds have a long history of lack of transparency. De Beers Private company prospected in Marange from 1963-1965 but submitted a misleading report to the Smith Regime following the Universal Declaration of Independence by Smith in 1965 that resulted on the government being slapped with international sanctions," he says. "It's clear that lack of transparency in the mining sector did not start now, it dates back to the colonial times."

From the misleading De Beers 1960s report, it is clear that the Marange Diamonds were a strategic diamond enclave with a huge potential for future exploitation.

The report concludes that the Marange diamonds had a:

- Red conglomerate rock in Marange that sometimes harbours diamonds

- Rock similar to Brazil where you mine hundreds of tonnes of red conglomerates to get few diamonds

- Marange Diamonds are severely weathered and therefore of low quality

- Diamond mining was not a viable investment

It is clear from the events that took place in Marange after 2000 that De Beers never wanted to give much detail nor the reason why for understating the potential of this diamond spot.

The concealment of the details is quite critical to understanding the history of lack of transparency in the extractive industries. Corruption did not start now. It can be traced to the colonial period.

De Beers' commercial dynamics and secrets are only emerging now and are opening debate about the history of dishonesty in the mining sector.

De Beers suspended active prospecting of diamonds from 1965 to 1980 when the liberation movements waged a protracted struggle for independence.

From 1980 to 1994, the diamond company kept a tight lid on the Marange discovery. In 1994, De Beers won an Exclusive Prospecting Order for Marange Diamond Fields.

Prospecting went on for 12 years from 1994-2006 without much information being availed to the Government and the mining communities. Secrecy during this period was commonplace and Zimbabwe lost diamonds running into millions of dollars that were clandestinely leaked out as 'samples.'

There was no transparency about the benefits received by the state nor information about the quantities, quality, price and other technical and commercial details of the diamonds that were mined.

Zimbabweans had no information about the management and destination of the diamonds that were smuggled illegally out of the country. When Zimbabwe adopted Affirmative Action Laws in the 1990s, De Beers was for the first time forced to employ locals. The company employed Zimbabwean geologists for the first time after facing mounting pressure from government.

Still the company at that time never allowed Zimbabwean geologists to enter the Marange Diamond Fields fearing they would leak details about the commercial viability of the area in diamond production. Zimbabwean geologists employed by De Beers were not given access to the Marange Diamond Fields.

De Beers held more and better information on the quantity, quality, price and other technical and commercial details on the Marange diamond deposits than the government and local mining experts.

Because of this, De Beers was able to inflate operational costs as a strategic way of maximising profits, maintaining a tight lid on the Marange diamonds and ensuring the Government, locals and other rival companies never took an active interest of the area.

The kind of flow of benefits that are normally made through the payment of royalties or part of the production to government were never made. The introduction of Affirmative Action laws created nervousness and stress to De Beers as the company failed to adjust to new realities and the push by Government to safeguard national interests.

As events continued to unfold rapidly, Marange villagers and local Zimbabwean geologists pressured the Government to act on the secret De Beers Diamond processing plant at Bezel Bridge.

In 2006, De Beers notified Government that it would not seek to have its EPO extended for reasons that were not disclosed. The diamond firm knew that the political game had been upped and chances were high that its exclusive prospecting of the area would be challenged by government and other new players.

The Herald/22/09/2011