Belgium and UK clinch deal on Zimbabwe diamonds

Other EU countries are expected to follow suit at a meeting on foreign policy in Brussels on Monday.

The Marange region in eastern Zimbabwe attracted notoriety in 2009 when the New-York-based NGO, Human Rights Watch, published evidence that President Robert Mugabe's soldiers were using murder and torture to force local people, including children, to dig for stones.

The NGO also said diamond money was being siphoned off to Mugabe's Zanu-PF party to help keep the autocratic leader in power.

Under the Anglo-Belgian compromise, the Zimbabwe Mining Development Corporation (ZMDC), which runs the Marange mining operation, is to be taken off the EU blacklist later this month. But EU ministers will in a statement on Monday warn Mugabe that it will go back on if he rigs elections, expected in July.

The "vast majority" of the 112 people on the blacklist are also to be taken off, the diplomatic sources noted.

Mugabe himself and most of the 10 other companies on the register are to stay in place for now.

For his part, a Belgian foreign ministry spokesman, Joren Vandeweyer, told EUobserver that Zimbabwe has changed for the better in the past three years.

"The human rights situation has improved. There's a government of national unity and agreement on a draft constitution. There will be a referendum on the constitution in the coming weeks and elections shortly after that … Belgium thinks it's important to encourage these democratic changes," he said.

He noted that EU sanctions have prompted ZMDC to sell diamonds on the black market, making it easier to siphon off money than if it operated under normal conditions.

He added that the cheap black market stones are also undermining the competitiveness of European diamond firms.

"These black market diamonds have no control. No certification. No Kimberly Process. Nothing. So the companies which invest money to comply with all the regulations on transparency and so on are being punished," he said, referring to an international process to keep so-called conflict diamonds out of shops.

The Belgian city of Antwerp is home to one of the world's largest diamond exchanges, which provides work for 34,000 people and generates sales of €35 billion a year.

But up and coming traders in India and in the United Arab Emirates, which do not have to comply with EU sanctions, are gobbling up business.

Meanwhile, according to reports in Zimbabwe state newspapers, ZMDC aims to more than double its output of diamonds from 8 million carats last year to 16.9 million in 2013.

Some rights groups have accused Belgium of cynicism.

"Belgium is trying to convince EU countries to lift this ban in order to trade and make profits with these companies," the New-York-based Avaaz group said in a statement this week.

Others agree that Zimbabwe is changing, but say that Britain, the former colonial power in the country, and the rest of the EU are moving too fast.

The London-based NGO Global Witness says ZMDC is still channeling money to pro-Mugabe security forces amid fears he plans to use violence and intimidation to get votes in July.

The group's diamonds specialist, Emily Armistead, told this website that even if delisting the firm helps to clean up its accountancy procedures, the benefit will be felt in the long term, while the Mugabe militias stand to get rich quick on new EU sales in the next few months.

"Let's wait and see if there are free and fair elections, and then see what the EU can do to help the transition process," she said.