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Zimbabwe Finance Minister Challenges U.S. Over Marange Diamond Ban

Biti said the ban on two diamond mining companies in Zimbabwe by the U.S. will seriously affect his 2012 budget since many projects are totally dependent on expected revenues from the gems

Zimbabwe's Finance Minister Tendai Biti has written a strongly-worded letter to the United States government, castigating its decision to sanction Mbada Diamonds and Marange Resources, companies in joint ventures with Harare to extract diamonds from the controversial Marange fields.

Biti said the ban will seriously affect his 2012 budget which had earmarked revenues from the diamonds for a number of projects. He said as much as $600 million in potential revenue could be lost if the ban remains in place.

The U.S. Treasury added the two diamond companies to its sanctions register for apparently partnering with the state-owned Zimbabwe Mining Development Corporation, which was already on the list.

"I want to place it on record that we as Ministry of Finance, writing on behalf of the government of Zimbabwe, find your measures contrary to the spirit of engagement and harmful to the generality of Zimbabweans," said Biti in the letter.

"Zimbabwe is a poor fragile economy and therefore, it must be allowed to sell and benefit from its resources. In my budget, there are capital projects of US$600 million which are totally dependent on diamond revenues."

Biti described the U.S. move as "self-defeating", especially coming after Washington backed the lifting of a Kimberly Process Certification Scheme ban on diamonds from Marange in an apparent deal to stop Harare from blocking America's bid to take over the chairmanship of the diamond watchdog group.

In the letter, Biti admitted that Zimbabwe diamonds have been sold illegally, but said he was confident that the challenges of accountability and lack of transparency will be resolved as Zimbabwe will now be selling its stones under Kimberley supervision.

ZANU-PF activist Goodson Nguni, also president of the Federation of Non-Governmental Organizations said the development confirmed his party's view that the Movement for Democratic Change formation of Prime Minister Morgan Tsvangirai has been the conduit through which the U.S. imposed sanctions on Zimbabwe.

“Biti would like to use revenue from the diamonds to achieve something, so that they can say to the electorate the MDC was responsible for lifting those sanctions and that is why you have this school, and that is why you have that clinic,” Nguni said.

Political analyst Pedzisai Ruhanya said the U.S. should lift what he termed economic sanctions hindering the growth of the economy but maintain those targeting individuals, including President Robert Mugabe.

“We believe that if there are individuals involved in human rights violations then they should be targeted at a political level,” Ruhanya said, arguing that companies that assist the national fiscus should be left alone.

He said the MDC formations should come up with a clear sanctions narrative that should not leave “loopholes for them to be attacked by ZANU-PF.”