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eURoPe

Kimberley members Kinross

turn attention on exits

Russian diamonds Russia

ussia, supported by Belarus, Central Russia’s KP delegate said in a May 20 anada’s Kinross Gold Corp has sold
RAfrican Republic, Kyrgyzstan and letter that the situation in Ukraine has “no Call its Russian assets to the Highland
Mali, has torpedoed a Western-backed implications” for the Kimberley Process Gold Mining Group for $US340 million in
proposal to discuss whether its diamonds and is “absolutely beyond the scope” of its cash, half of the previously announced
are funding war ahead of an international certification scheme. price.
conflict diamond meeting in Botswana, Belarus, CAR, Kyrgyzstan and Mali all The Toronto-based miner said in April it
letters seen by Reuters show. similarly argued that the proposal was “po- would sell its Kupol mine and Udinsk pro-
The rift in the Kimberley Process (KP), litical” or outside the scope of the KP, and ject to Highland Gold, one of the largest
which certifies rough diamond exports, that its inclusion on the agenda was inap- gold miners in Russia, for $US680 million.
risks paralysing the body which makes de- propriate. All four countries have backed “The transaction consideration was
cisions by consensus. Russia in recent UN General Assembly adjusted by the parties following review
The letters, which have not been previ- votes. by the recently formed Russian Sub-
ously reported, show a dispute over a pro- War-torn CAR is the only country in the commission on the Control of Foreign In-
posal by Ukraine, the EU, Australia, Britain, world currently under a partial KP em- vestments,” Kinross said, adding the sale
Canada, and the US to discuss Russia’s bargo for rough diamond exports. Russia, was approved for a price not exceeding
invasion of Ukraine and whether to broad- with which it has close trade and security $US340 million.
en the KP’s definition of conflict diamonds ties, has worked to lift those restrictions. Russian authorities in March had stipu-
to include state actors at its scheduled Mali also has close ties with Russia. lated that any transaction between Rus-
meeting in Botswana last month. Hundreds of Russian military contractors sians and foreign counterparties requires
The US and Britain have already placed have deployed there since the beginning permission from the commission, saying
sanctions on Russia’s Alrosa, the world’s of this year to help the Government fight it wanted to ensure decisions to exit were
largest producer of rough diamonds, which insurgents. considered and not driven by political pres-
accounted for around 30% of global output “If the Kimberley Process is to be a cred- sure.
last year, and is partly state-owned. ible guarantor that diamonds exported with Highland Gold operates several mines
A draft agenda dated May 20 included a KP certificate are actually conflict-free, it in the country, including in Chukotka and
an hour-long slot to discuss the issue, but cannot refuse to consider the valid ques- Khabarovsk regions where the Kupol mine
the item was removed after objections tions that have been raised about whether and Udinsk project are located.
from Russia, Belarus, Central African Re- rough diamonds exported by Russia are fi-
public (CAR), Kyrgyzstan, and Mali. nancing its invasion of Ukraine,” Canada’s
“We find ourselves at an impasse,” Bot- Ioanna Sahas Martin wrote to the KP chair
swana’s KP chair Jacob Thamage told in June.
participants – who include 85 nations, in- In a letter to the chair, Ukraine KP rep-
dustry representatives, and civil society resentative Andrii Tkalenko proposed two
organisations – in a June 9 letter urging amendments to the certification scheme:
them to find common ground. To widen the definition to include govern-
The KP defines conflict diamonds as ment actors, and to allow KP countries,
gems used to fund rebel movements seek- by a majority vote, to expel a country that
ing to undermine legitimate governments. infringes on another KP member’s sover-
Officially labelling Russian diamonds eignty.
“conflict diamonds” would require widen- Britain, the EU and the US also said
ing the definition. The KP Civil Society Co- Russia should step down from the KP
alition has been calling for such a change committees it currently chairs.
for years, along with some KP member “Inaction would undermine the credibil-
countries. ity and integrity of the Kimberley Process
The certification scheme, designed to not only as a conflict prevention mecha-
eliminate the trade in so-called “blood dia- nism but also as a trade regulation mecha-
monds”, was set up in 2003 in the wake nism,” the European Commission’s Marika
of devastating civil wars in Angola, Sierra Lautso-Mousnier said in a letter.
Leone, and Liberia, which were largely fi- – Helen Reid, Reuters
nanced by the illicit diamond trade.

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