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CAR Appeals for Wider Diamond Clearance

Nov 12, 2018 3:11 AM   By Avi Krawitz
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RAPAPORT... The Central African Republic (CAR) is hoping this week’s Kimberley Process (KP) meeting will help raise its rough-diamond exports.

Mining Minister Leopold Mboli Fatran is appealing to the KP to approve nine additional zones from which the CAR can export production, in addition to the five areas that were approved in 2015. This would enable the country to attract investors to reform its artisanal-mining sector and combat illicit activities and smuggling, the ministry said in a statement ahead of the KP plenary meeting that starts in Brussels on Monday.

The additional zones would mean the whole of the western part of the country would comply with KP standards, making it easier for the government to attract investors, explained Peter Meeus, special adviser for diamonds to the government.

While exports are barred from those areas, artisanal-mining activity continues, so one can assume that a large portion of that production is being smuggled out of the country, Meeus noted.

Meanwhile, CAR claims it has met the requirements set out by the KP at the nine additional areas. Those include having the appropriate monitoring mechanisms in place, maintaining government control over the zones and ensuring there is no rebel-based armed group activity that might impact the internal controls in the diamond production or trade, the ministry explained.

Sanctions are still in place for diamonds mined in eastern CAR, where rebel groups remain active and have not adhered to a UN order to disarm, as the government has. Russia and France have recently provided the state with weapons to combat the rebel groups, after violence flared up last month.

The KP’s role in the country is therefore twofold, according to Meeus. Its first function is to prevent diamond production from the eastern region from infiltrating the west, and the second is to enable exports from the western zones that should provide the government with much-needed tax revenue.

That revenue has been limited as exports plummeted from 113,000 carats in 2017 — including production of 47,636 carats during the year and a stockpile from previous years — to approximately 10,000 carats so far in 2018, according to Meeus.

“Over-administration is partly to blame,” he said.

Exports occur only once a month and a tedious process to clear the diamonds has discouraged miners from going through those proper channels. In June, the KP eased its controls on exports by reducing the time it takes to clear the shipments to seven days, but the country has not yet benefited from the decision as third-quarter production was limited by wet weather during the peak rainy season, the ministry noted.

The system hasn’t been tested with significant production yet and miners want an assurance that the seven-day process will be upheld, Meeus reported. They’re also asking for exports to be cleared every 15 days, he added.

Implementing those decisions will create a platform from which the government can bring in partners to formalize the mining sector, Meeus stressed.

“By the end of 2018, it is the intention of the CAR government to announce a new policy to ensure the return of responsible diamond mining to the country,” Fatran said. The government will consider providing tax incentives to partners who assist in bringing about structural reforms in the artisanal-mining sector and who would also engage in capacity-building projects to uplift the country’s youth, the minister added.

Image: Artisanal miner digs for diamonds. (Rapaport News)
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Tags: Avi Krawitz, Central African Republic, diamonds, Jewelry, Kimberley Process, Leopold Mboli Fatran, Peter Meeus
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