Zimbabwe runs million-carat diamond auction

Zimbabwe on Wednesday held the first auction of diamonds from its Marange mines since international regulators lifted a ban on the fields' stones. About 900,000 carats of rough diamonds - valued at about 56 million euros - went on sale, according to trade watchdog the Kimberley Process.

Sylvain Savolainen

Buyers from the US, Israel, Russia, Lebanon and India attended the auction, which took place behind closed doors at Harare airport.

The Kimberley Process (KP) blocked the sale of Marange diamonds in November 2009, following allegations of human rights abuses by soldiers sent in to seize control of the area's mines.

The regulator partially lifted its ban last month. Its monitor in Zimbabwe, Abbey Chikane, has made several visits to the Marange fields in the past week and continues to oversee the audit of the country's diamond stocks.

Zimbabwe is now allowed to sell diamonds mined since May under KP supervision. A second auction is expected to follow in September.

The country's government has highlighted the potential profits to be made from diamonds sales, in a country where foreign investment is limited and poverty and hunger are widespread.

Zimbabwe's total stock of 4.5 million carats could bring the government some 1.3 billion euros, more than half the country's annual budget, according to Mining Minister Obert Mpofu.

But while Prime Minister Morgan Tsvangirai said Wednesday's sale should "boost liquidity levels" in Zimbabwe, he urged people to be "realistic" about the likely economic benefits.