Ali Moussa and his partner, Shahab Hamdan, are peripatetic veterans of the blood-diamond trade. For 15 years, they based themselves in Bo and Kenema, in Sierra Leone, near the rich diamond deposits that stoked a decade-long civil war between the ragtag government army and a brutal rebel force. As the enemies battled for control of the diamond fields, Moussa and Hamdan (the names are pseudonyms, at their request) bought gems from rebels and soldiers alike, then exported them to international dealers at a hefty profit. Then, in January 1999, the world was forced to watch as drug-fueled teenage rebels invaded Freetown, the capital, where they executed hundreds of civilians and hacked the limbs off hundreds more. Pro-government British troops defeated the rebels and oversaw the transition to a democratic government. Eventually, Moussa and Hamdan were obliged to look elsewhere to make their money.

That's when they found out about Manica. "We came here [to Mozambique] a year ago when we heard about the boom" just across the nearby border, in Zimbabwe, Moussa tells me, grinning from behind a desk adorned with a digital scale and a pair of loupes -- the standard tools of the diamond buyer's trade. He's a bald, skinny Lebanese with an unplaceable accent, a mélange of French, Arabic, and the pidgin-English inflections of West Africa. "The quality's not as good as the diamonds in Sierra Leone," Moussa adds, "but the quantity is huge."

Just how huge becomes apparent during a swing through this once-sleepy frontier town at the base of the bush-covered Penha Longa Mountains. Long known primarily as a stop for a Laurentina beer or a tank of gas on the way to Beira, Mozambique's second-largest city, Manica has become a southern African boomtown: Deadwood in the bush. A Zimbabwean human-rights worker and a local teenager named João take me on a tour. We drive past furtive Lebanese traders sipping espressos in outdoor cafés or riding around town in new Toyota Land Cruisers; rows of pastel-painted ranch houses that could be in Orange County; a new mosque and halal supermarkets catering to the influx from the Levant. Bodyguards with rifles and German shepherds patrol outside walled-off compounds. Safari-jacketed Afrikaners from Johannesburg, who are vying with the Lebanese for a piece of the diamond trade, chain-smoke on the terrace of the thatched Manica Lodge. Shabbily dressed Zimbabwean diamond panners who've trekked across the mountainous border, their pockets bulging with rough gems (some are soldiers out of uniform, others civilian diggers employed by the troops), wander from house to house in search of a deal. Everywhere I turn, there is evidence of a vast unregulated enterprise, a libertarian's dream come to life.

Back on the front porch of Moussa's peach-colored bungalow, I ask him how much money he has made during the year he's been buying diamonds here. He smiles. "We are meeting all of our basic needs," he tells me. "We are getting by."

Moussa's coyness is understandable. He and Hamdan -- a sad-faced, gray-haired Lebanese in his late forties -- may be only bit players, but they and others like them are crucial actors in the illicit sale of untold millions of dollars' worth of gem-quality and industrial diamonds being smuggled out of Zimbabwe, ruled by the despotic president Robert Mugabe. And the transformation of Manica itself is only the latest manifestation of a corrupt and violent industry (smuggled stones may account for 10% of the $12-billion-a-year diamond trade) that, by fate or a stroke of divine injustice, happens to be centered on the world's most destitute and anarchic continent. Sierra Leone wasn't the only country in Africa where diamonds were used to underwrite rebellion at horrific human cost. In Angola, Jonas Savimbi and his UNITA guerrillas financed their gruesome 1990s war against the government by selling to De Beers -- if only indirectly -- an estimated $500 million to $800 million worth of illegal gems from UNITA-controlled mines. (In a statement, De Beers told Fast Company it "has never purchased diamonds from UNITA," but in a 1997 press conference, De Beers executive director Gary Ralfe conceded that "there is no doubt that we buy many of those diamonds that emanate from the UNITA-held areas in Angola secondhand on the markets of Antwerp and Tel Aviv.") And in the Democratic Republic of the Congo (DRC), an assortment of militias have vied for the country's rich alluvial diamond deposits, perpetuating a conflict that has claimed as many as 5 million lives since 1996.

For decades, it was relatively easy to ignore the links between the atrocities carried out around Africa's mines and the jewels around the necks of Tiffany customers. Then, about 10 years ago, the international human-rights movement embarked on an unprecedented effort to prick the world's conscience and persuade diamond-producing-and-importing nations, along with industry leaders, to clean up their act. In 2002, they created the Kimberley Process Certification Scheme, a global watchdog group charged with getting blood diamonds -- narrowly defined as "rough diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments" -- off the market. The Kimberley Process was endorsed by the United Nations Security Council and hailed as an important step toward bringing transparency to a murky and violent trade.

Today, not everyone is convinced that the process has been a success. The Kimberley Process mission, even former members say, has been so narrowly defined that the monitoring group has been unable to clean up the diamond business in any meaningful way. What's more, an institution that came into being to regulate the ultimate Darwinian industry has turned out to be just as morally compromised as the business it was supposed to purify, offering little more than what one critic calls a "feel-good PR exercise." Indeed, as the terrifying events in Zimbabwe over the past year attest, greed, criminality, and violence remain pervasive.

The Marange diamond fields lie about 50 miles west of Manica, in the foothills of Zimbabwe's Eastern Highlands, a lush, temperate zone dominated by three mountain ranges: the Nyanga, the Bvumba, and the Chimanimani. Marange is a dry, isolated patch of rolling hills covered in the vegetation typical of the southern African bush -- thorn trees and a savanna grass known as shrub veld. Less typical, of Zimbabwe at least, is what lies beneath: The igneous bedrock here is some of the world's oldest, the kind that often harbors diamonds, those clusters of carbon molecules, converted into crystals under high pressure and heat, that are found both in funnel-shaped volcanic formations called kimberlite pipes and in alluvial deposits scattered in shallow gravel beds or soil.

The highlands' trout-rich streams, golf courses, and forests of pine and eucalyptus have invited comparison to England's Lake District. But the terrain is better known as the stronghold of the rebel movement that fought against the white-minority regime of Ian Smith in what was then Rhodesia (named after Cecil Rhodes, the South African mining magnate who swindled local tribal chiefs out of mineral concessions in the 1880s and founded De Beers in 1888). In the 1970s, guerrilla forces led by a former teacher named Robert Mugabe launched attacks from the Eastern Highlands on isolated white homesteads and army patrols, one of the crucibles of a savage civil war that ended in 1979. A year later, Rhodesia became Zimbabwe and Mugabe its president.

In the early years, Mugabe was revered as an independence hero. He promoted literacy and universal free education. He urged the country's 200,000 whites to stay on and help rebuild the country, and many did so. Zimbabwe built a thriving safari-tourism industry and its 4,000 white-owned commercial farms exported hundreds of millions of dollars' worth of tobacco and other cash crops a year; its minerals, including nickel, copper, and gold, brought in hundreds of millions more. By the end of the 1990s, though, Mugabe had followed the path of so many African leaders, morphing into a cruel and corrupt tyrant. (He has managed to retain a small following among his African contemporaries, who continue to view him as a liberator.) When a new opposition party, the Movement for Democratic Change (MDC), arose in 1999 and many of the country's white farmers supported it, Mugabe turned against them with a vengeance. He sent goons to seize thousands of white-owned commercial farms -- they stabbed, shot, and beat to death two dozen farmers -- and turned the land over to squatters, party loyalists, and military commanders. Nearly all of Zimbabwe's commercial farms stopped producing, and the country slid into economic collapse. Schools and hospitals closed, gas pumps ran dry, factories shut down. Unemployment hit 70%; life expectancy for women sank to 34, one of the lowest rates in the world; and hyperinflation turned the Zimbabwean dollar into near-worthless currency. Mugabe grew increasingly isolated and paranoid, unleashing his security forces to intimidate, torture, and murder opposition activists.

Despite the growing political violence and international ostracism, some companies continued to do business in Zimbabwe. Andrew Cranswick, a burly fourth-generation Zimbabwean, was one of the few who set up shop in those tempestuous days. Over lunch at a French bistro in Harare -- a green, once-prosperous capital that now features broken traffic lights and crumbling office towers looming over potholed roads -- Cranswick tells me that he and his partners founded African Consolidated Resources (ACR), a small mining company, in 2003, at the height of Zimbabwe's political and economic crisis. "We saw opportunity when everybody else said it was too risky politically," says Cranswick, cutting into a beefsteak in the late winter sun. Much bigger players were involved as well: In 2002, Kimberlitic Searches, a subsidiary of De Beers, had begun exploring a 1,000-square-kilometer area in and around Marange. But after running soil samples, De Beers deemed the site unpromising and allowed its licenses to lapse in March 2006. At that point, Cranswick pounced. "We purchased mining claims [to Marange]. We had one ex-De Beers geologist, and we followed up on a lot of the ground that De Beers had explored," Cranswick tells me. Several months later, the ACR team struck pay dirt: gem-quality diamonds in sandy soil a few feet below the surface.

Mere days later, Zimbabwe's mining commissioner claimed Cranswick's license was invalid, and the Zimbabwean police moved in. "They ordered all 70 of us off the property at gunpoint," Cranswick says bitterly. "They had no legal basis for it. It was just greed, individuals in the government who wanted to enrich themselves." As Cranswick and his partners watched from the sidelines and pursued a lawsuit in the unpromising forum of Zimbabwe's High Court, word of the find quickly spread across the country and the rest of Africa. Mugabe, faced with an implosion of political support, declared the area a free and open zone, and tens of thousands of migrants, from as far away as Nigeria and Equatorial Guinea, descended on the Marange fields. One international-aid worker drove through in mid-2006 and encountered clusters of men under trees, holding up their fingers in the shape of a diamond. "I was asking, 'What the heck is that? What's this signal?' " he says. "And then I realized, Oh, diamonds for sale."

The capital of Zimbabwe's Manicaland province, Mutare, is set in a bowl formed by steep and rugged mountains northeast of Marange; as the gem trade took off, it promptly became a frenetic commercial hub. Along with the panners came buyers from Lebanon, India, Pakistan, Belgium, and beyond, swindlers and hustlers and strivers who spread hard currency and drove up the price of food and rent threefold. "We moved our offices in Mutare, and the old office immediately became a brothel," one Westerner who worked in the town tells me. "And it was all because the area was flush with cash."

It was clear at the outset that the Zimbabwean government, and Mugabe's inner circle, would serve as the exclusive buyers of diamonds from the freelance panners. But the parastatal Minerals Marketing Corporation of Zimbabwe soon found itself overwhelmed by the scale of the unregulated panning and by competition from outside buyers with plenty of hard currency. Regime insiders such as Gideon Gono, the chief of Zimbabwe's national Reserve Bank, who sent emissaries to the fields with suitcases full of hyperinflated Zimbabwean dollars, were also becoming marginalized. Mugabe and his cronies watched as Zimbabwe's new diamond wealth slipped through their fingers and out of the country.

Blamed for plunging Zimbabwe into ruin, Mugabe's party was trounced in presidential and parliamentary elections in March 2008. Mugabe refused to concede and government militias and his security forces once again began a campaign of intimidation, torture, and murder of pro-MDC Zimbabweans. Amid the growing lawlessness and violence, Manicaland's governor, a Mugabe loyalist who had lost a run for Parliament, called for military action in the diamond fields. "He blamed the local population for not having supported him in the election," a Western diplomat in Harare tells me, "and he decided to teach them a lesson." Soon afterward, Gono announced that the government was losing $1.2 billion a year to illegal panners and that the army would be called in "to try to drive the illegal diggers out."

"Gono wanted greater market share of the diamonds for himself," says the diplomat. One military officer familiar with the planning of the offensive told Human Rights Watch that the top brass saw an army takeover of the fields as a way of appeasing an increasingly discontent rank and file: "Hundreds of soldiers were resigning, [or] deserting with their weapons [because they were being paid in Zimbabwean dollars] ... the final strategy was to give the military direct access and control over [natural] resources." In October, Constantine Chiwenga, the commander of Mugabe's armed forces, moved to a nearby Holiday Inn and set in motion Operation Hakudzokwi, which translates to "no return." He dispatched three battalions into Marange for what one military officer called a "swift, ruthless, and secret operation" to remove unlicensed miners from the diamond fields. "It was something made for Hollywood," says the diplomat. "It was a sequel to [the film] Blood Diamond."

Monday, October 27, 2008, dawned cold and clear at Marange. Around 7 o'clock, a panner looked up from his digging to see three helicopters sweeping in a few hundred feet above the ground. "I was not worried," he told Human Rights Watch early this year. "I just assumed it was a team of buyers who had come for business in helicopters, as they sometimes did." As the choppers approached, however, the panner saw military markings. Then the soldiers opened fire with automatic weapons. "We all stopped digging and began to run toward the hills to hide. I noticed that there were many uniformed soldiers on foot pursuing us. From my [group], 14 miners were shot and killed that morning."

More than 800 soldiers from three army units -- Mechanized Brigade and No. 1 Commando Regiment based in Harare, and the Fifth Brigade from the central Zimbabwean town of Kwekwe, along with five air-force attack helicopters and agents from the Central Intelligence Organisation -- descended on Marange that day and every day for the next three weeks. Ground troops followed the initial helicopter assault, advancing on pockets of miners scattered across the fields, firing their AK-47s indiscriminately. Miners stampeded in a panic through cramped tunnels, where dozens were crushed or suffocated. Witnesses observed soldiers searching the bodies of dead miners in the fields, pulling diamonds and other valuables from their pockets. "The soldiers pursued us into the hills," one observer told Human Rights Watch. "Unfortunately, we ran into a group of soldiers who stopped us. The soldiers marched us at gunpoint back to the fields and ordered us to collect the bodies of dead miners whom they had shot... . We gathered 37 bodies and piled them in an army truck." A local headman told the organization that in the three weeks of the military operation, the fields resembled "a war zone in which soldiers killed people like flies." While some local human-rights groups heard about the operation as it unfolded, it would take half a year for the slaughter to draw even a flicker of attention from the outside world.

On a morning last August, at the end of the Zimbabwe winter, the wind howled as I swerved my rented Nissan over a pitted tarmac road through Mutare, once the center of the illegal diamond trade here. The now-decrepit city of 180,000 people had fallen quiet again; Zimbabwean police had driven out the traders, and most had fled across the border for the relative charms of Manica. Farai Maguwu, a husky man in his late thirties who heads the Centre for Research and Development, a human-rights advocacy group, sat next to me, scouting for potholes, some large enough to finish off my vehicle. "In Zimbabwe," he tells me, "we say that if a man drives a straight line down a road, he must be drunk."

The conversation turned to Andrew Cranswick, the entrepreneur who had had his rights to Marange revoked by the Zimbabwean government. Maguwu theorizes that ACR had run afoul of Mugabe because the company had sold shares to the despot's political enemies. "You play with people who are on the wrong side of power, and you mess up," he says.

We follow a dirt track in the direction of Mozambique. At the Dangamvura Cemetery, Maguwu leads me to a mound of earth on the graveyard's outskirts, where, he claims, the corpses of 79 panners were dumped by the army on December 19, 2008. "Some were in an advanced state of decomposition, because they'd been killed and left to rot in diamond fields for several days," Maguwu says. "Soldiers and police brought them here in a secret operation, and even now they are denying that anything took place." I see no human remains and the place gives off no smell, but Maguwu tells me that he and his colleagues had entered the mortuary just before the bodies were removed and had seen evidence of bullet wounds. His team had examined hospital records showing that hundreds of people had been shot by police, severely beaten, and had dogs set upon them. "We were counting bodies," says Maguwu. "More than 500 people were murdered by the state in the diamond fields. It could be more."

Later that afternoon, a couple of miles from the cemetery in a dimly lit home with concrete walls covered with Christian homilies and pictures of Jesus, I am introduced to Elizabeth (not her real name), who had earned a living selling blankets, clothes, and shoes to the diamond panners at Marange. That same December, she says, she and dozens of other market women were arrested in a sweep through the fields by the military police. "We were caught, our money was stolen, and everything we had was collected and burned," says Elizabeth, a plump woman in her thirties. "Then they said, 'Line up, all you women, lie on your stomachs,' and they started beating us with branches and sticks. After that, they said, 'Sit down,' and began singling out the prettier women. They said, 'If you don't want to be beaten again, come with us.' " Elizabeth says she and five others were taken into an alley behind their makeshift market, where they were forced to lie down and remove their clothes. "Two soldiers made me sleep with them," she says. "Then, after forcing me to sleep with them, they sent me back to the others and they beat us some more."

Elizabeth introduces me to her nephew, a 16-year-old diamond panner who sits slumped on the couch, woolen ski cap pulled over his forehead. Before the army moved in, the nephew tells me, he dug for diamonds on his own or with friends. Now, soldiers ring Marange and almost all panners have joined "syndicates" -- groups of 20 to 30 men who work under tight military supervision. They turn most of their diamonds over to the troops while being allowed to carry a fraction of their booty to Manica. Maguwu says that diggers who fail to produce a sufficient quantity of diamonds are beaten, held in makeshift army prisons, tortured, and otherwise mistreated. "It's slave labor," he asserts. Elizabeth's nephew and his three friends had just made a clandestine trip to the fields, where they scavenged $1,200 worth of industrial gems, splitting the proceeds. But he had narrowly eluded army patrols and having been caught and beaten once before, he says, "I'm not going back. I'm afraid the next time they will kill me."

For most of the past century, De Beers controlled 90% of the world's rough diamonds and was known for its rapacious approach to business and a don't-ask-don't-tell attitude about the origins of its gems. With wholly owned mines in South Africa, and joint partnerships with the governments of Botswana, Namibia, and other big diamond producers, De Beers also worked with a tight network of some 150 cutters and polishers to control a vertically integrated diamond cartel. Yet over the past two decades, the business has become more diffuse, with major mine owners such as Australia's Rio Tinto and BHP Billiton, Aber (which purchased all of U.S. diamond retailer Harry Winston in 2006), and Alrosa (which accounts for about 98% of Russian production) cutting into De Beers's market share. By its own estimate, De Beers now controls about 40% of the world's rough diamonds, with annual revenue of about $7 billion. The attitudes toward the business have changed as well.

No one did more to bring about that shift than Ian Smillie. A genial, gray-bearded Canadian who first lived in Africa in 1967 as a teacher in Koidu, near Sierra Leone's diamond operations, Smillie, now 64, went on to become the research director of Partnership Africa Canada, which focuses on sustainable development and protection of human rights. In January 2000, Smillie coauthored a report on the atrocities being committed in Sierra Leone, implicating De Beers and the Antwerp diamond-cutting industry, which together bought up nearly 100% of the country's stones. "The industry's standard line was, 'Guns kill people, not diamonds. We just buy diamonds, we don't have any involvement in this,' " says Smillie, speaking to me by phone from his home in Ottawa. Almost simultaneous with Smillie's report came a devastating exposé of De Beers's role in Angola by the watchdog group Global Witness. "By then, the state of denial was over," says Smillie, who became a key member of the Kimberley Process and helped organize the first international conference in May 2000 to discuss setting up a monitoring mechanism for diamonds. "Anybody who knew Africa knew things were in free fall. There was no regulation, rampant criminality. Diamonds were 'coming from' Gambia, Uganda, places with no diamonds -- it was one giant laundry."

De Beers, with the most to lose from a global PR fiasco, was one of the first to fall in line, shutting down its buying offices in Angola and Guinea. Thanks in part to prodding by Smillie and others, the global diamond industry, including major mining companies and such retailing organizations as Jewelers of America, climbed aboard in July 2000, creating the World Diamond Council to represent it at the Kimberley Process. Kimberley, which was formally endorsed in Switzerland in November 2002 by 40 nations, plus the diamond industry and NGOs, obliged all of its members to establish a system of transparency and tight controls. The new rules required shipments of rough diamonds to be exported in tamper-proof containers accompanied by a certificate guaranteeing the origin and contents. Importing nations were to certify that the diamonds had not been tampered with and to reject shipments that didn't meet the requirements.

But as Smillie watched the Kimberley Process play out, he became convinced that it was falling far short. Its narrow definition of what it calls "conflict diamonds" failed to target those gems mined in countries overwhelmed by simple lawlessness or run by governments with appalling human-rights records. (Today, Kimberley considers only gems from Côte d'Ivoire, where a rebel army is in control of the northern part of the country, to be conflict diamonds.) Moreover, Kimberley proved almost totally unable to take the only punitive action in its arsenal -- suspension -- against countries trafficking in dirty stones. In 2004, under the chairmanship of Canada, the body suspended Congo Brazzaville, which was unable to account for hundreds of millions of dollars' worth of diamonds that it was exporting. (The country was serving as a conduit for gems from neighboring DRC.) But since then, Smillie says, "the Kimberley Process has been dragged kicking and screaming toward the idea that [any country] should be suspended." Kimberley's awkward consensus voting system means that "if a single country says no, including the intended expellee, you've got a real problem," he explains. There are also no independent monitoring systems to guarantee that nations comply and too many incentives to cheat or look the other way. "There is no effective way to track the stones from point of origin to point of sale," Amy O'Meara of Amnesty International said in 2006, after the release of Blood Diamond drew new attention to the issue. "There is so much money at stake and so many hands in the pot. It's easy for the system to be corrupted."

Last spring, after local NGOs and Human Rights Watch issued damning reports about the human-rights abuses and smuggling at Marange, Smillie grew still more frustrated by Kimberley's inaction. To his eye, Zimbabwe was in flagrant violation of the procedures that, as a member of Kimberley, it had agreed to follow. By the Zimbabwean finance minister's own account, the government receives "nothing" from the diamond fields, meaning that 100% of stones mined there are smuggled out of the country. But while money isn't flowing into government coffers, plenty is ending up in the pockets of both rank-and-file soldiers and Mugabe's inner circle. The latter allegedly have access to a fenced-off, 2-square-kilometer area in the center of the diamond fields, said to contain the richest lode of gem-quality diamonds. This section has become known as Mai Mujuru's Breast, a reference to the country's corpulent, feared vice president, Joyce Mujuru, the wife of the former commander of the armed forces -- and one of those who has reportedly profited most handsomely from the gems. "If you're a special person, you will go there and you will be allowed just 20 minutes. That's where you can get clear diamonds," one opposition lawmaker told the Los Angeles Times last year.

Smillie was initially encouraged when a 10-man investigative team from the Kimberley Process -- civil-society representatives, diplomats, and diamond-industry officials from half a dozen nations -- visited Marange in June at the invitation of the Zimbabwe government. Mining and foreign ministry officials gave them a stage-managed tour, then introduced them to various government functionaries who painted an innocuous picture of the events at Marange. "It was a dog-and-pony show," one member of the team told me. But four members broke away and traveled independently through the diamond fields, guided in part by a village leader who had witnessed Operation Hakudzokwi. "We talked to the community, the miners, and went out to the mining areas, and what we saw was in contradiction to what the [Zimbabwean] government was telling us," says one member of the breakaway group. In addition to evidence of rampant smuggling, "we saw victims of dog bites. We saw slave laborers digging diamonds. We saw soldiers guarding panners washing gravel in the water." The observer was horrified: "I was so emotional, so disturbed. I broke down." One member of the team who'd been on the official tour says he was "relieved" when the independents reunited with the others later that day and related the real story -- "and not the same garbage that the government was serving us."

The Kimberley team's preliminary report, which was leaked to the press, condemned the Zimbabwean army for carrying out "horrific violence" and said there was "direct involvement of the military in illegal mining." It recommended that Zimbabwe receive a six-month suspension from Kimberley, a move that would ban not only diamonds from Marange but also from Zimbabwe's two other production areas, River Ranch and Murowa, near the South African border. Members of the team called as well for a special rapporteur to investigate charges of mass killings and slave labor, and urged the Kimberley Process to address human-rights abuses at its next plenary meeting.

Weeks after the team returned from Zimbabwe, however, Bernhard Esau, the deputy minister of mines and energy from Namibia and this year's Kimberley chairman, met privately with Mugabe in Harare, then held a press conference: "Yes, there are members ... trying to convince other members to suspend Zimbabwe," he told the assembled reporters, "but we will not entertain such [calls]." Esau dismissed the human-rights abuses as outside of Kimberley's purview. And he downplayed the smuggling at Marange. Investigative team members looked on aghast. "Esau came to this place with very little knowledge or experience," says one African member of the team who believes Esau was influenced by Namibia's long-standing friendship with the Mugabe regime. "I think he is incompetent." By that point, Smillie had had enough. Shortly after Esau's visit, he resigned as a Kimberley representative, calling the organization "complacent and almost completely ineffectual." Smillie tells me, "Zimbabwe's diamonds have blood all over them."

Seven years after Kimberley went into effect, the organization hasn't made much of a dent in the underground trafficking of diamonds. Although, according to Kimberley's guidelines, eliminating smuggling is one of its primary mandates, the practice still comprises about a tenth of the global diamond business, according to Smillie and other experts. And according to the Kimberley Process's own review, Smillie says, half a dozen governments in Africa -- including the DRC, Angola, Sierra Leone, and Guinea -- "don't know where at least half their diamonds come from. Their internal controls are terrible." The big diamond buyers, including De Beers, have cleaned up their businesses, but smaller players have moved into the vacuum: Sylvain Goldberg and Ehud Laniado, of Omega Diamonds in Belgium, have allegedly made huge profits over the years trading in smuggled diamonds from Angola and Congo, passing the gems through Dubai, Tel Aviv, and Geneva, and then laundering the money through dozens of shell companies. (In October 2008, Belgian tax authorities barged into Omega's Antwerp office, seizing more than $125 million worth of illicit diamonds.)

Marange's gems, too, have found an easy path to the underground market. "They will go everywhere in the world," I'm told by one Harare diamond trader. "The low-quality stuff goes to India via Dubai, the medium quality to Lebanon and South Africa, and the highest quality to Israel and Belgium." Because the gems have been smuggled out of Zimbabwe, the trader says, export documents are often forged, listing their origin as South Africa or the DRC, but to experts the look of most of the rough diamonds is a dead giveaway. "They have a brownish coating, caused by soil working its way deeply into the facets, that is unique," he says. "Everybody knows they're from the fields of Zimbabwe."

Riven by internal bickering and political agendas, run by people with a vested interest in protecting their profits, Kimberley has demonstrated repeatedly that a multilateral body with small teeth is no match for simple greed. "The Kimberley Process is about assuring consumers that diamonds are clean," Smillie says, but "it has done fuck-all." Still, he adds, instead of writing off Kimberley, member nations should band together to reform the consensus voting system and to create an independent monitoring mechanism capable of imposing harsh penalties. "There is no alternative. To go back to the chaotic criminalized days pre-2000 would be a disaster for the industry and for African countries that depend on it."

In the months since the Kimberley Process team visited Zimbabwe, nothing much has changed in the fields of Marange. The soldiers continue to send their syndicates of laborers to dig for diamonds, the illegal flow spills across the border into Mozambique and around the world, and Zimbabwe's politicians remain divided about whether or not their country should face the stigma -- and possible further economic hardship -- of suspension. Even key opposition figures have rallied behind Mugabe, insisting that banning Zimbabwe's diamonds from the above-ground market will hamper the country's efforts to bounce back from ruin. In the competition between moral principles and potential diamond profits, the money always wins. Last spring, the deputy minister of mines, an opposition official, denied that any killings had taken place at Marange, earning the censure of his party. "He's been corrupted," I am told by one MDC insider. Likewise, Tendai Biti, once one of Mugabe's fiercest critics and now minister of finance in the unity government that Mugabe reluctantly formed last February, hedged on whether atrocities occurred at Marange. "There were acts of brutality," he concedes when I visit him in his office in Harare. "But I have not seen evidence of mass graves." (In October, the MDC announced it was "disengaging" from the unity government until details of the power-sharing arrangement were clarified.)

Biti too takes a strong stand against suspension, arguing that his government desperately needs $100 million to $150 million a year to function, and that Marange could generate much of those funds.

He says the government should be given time to sign contracts with "responsible" private partners, so that it can begin withdrawing the military and bring transparency to the process. "You need proper mining to start taking place, with the private sector responsible for security," he tells me. But Cranswick of African Consolidated Resources, who won his lawsuit in Zimbabwe's High Court (to no apparent effect, he says), claims that the Ministry of Mines has begun making ill-conceived deals with inexperienced private companies with "shady backgrounds." And members of the Kimberley team that met with Biti say that the finance minister is being naive if he expects the military to give up its cash cow. "What he says is bullshit," says one. "He's a good guy, and I respect him, but with Mugabe controlling everything, there is nothing he can do." Only the stigma of suspension, the investigator adds, will force Mugabe to pull out the military. "You have to tell the government, 'You cannot export your diamonds until you clean this up.' "

Back at Manica, one of the town's biggest diamond traders insists that slapping Zimbabwe with sanctions will only punish the little guy. "The diamond is not a drug. It is not a weapon. It is not dangerous," he says. "It is benefiting the soldiers, and it is also benefiting the people. The people there are already suffering. They are desperate. To sell their diamonds, some are ready to die." Hundreds, it seems, already have.

Joshua Hammer, an international correspondent specializing in conflict zones, is the author of three books as well as countless magazine articles.