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Saturday, 21 April, 2001, 22:56 GMT 23:56 UK
DR Congo boosts diamond trade
DR Congo President Joseph Kabila
Kabila's decision has been welcomed in Kinshasa
By Mark Dummett in Kinshasa

The Democratic Republic of Congo has opened up the country's vital diamond trade by suspending an exclusive trading licence issued to an Israeli company last year.


The decision comes a week after Joseph Kabila announced his new government by relatively unknown technocrats

The deal was estimated to have been worth $600m but has, in the words of a recent UN report, been a nightmare for the Kinshasa government.

When the late Congolese President, Laurent Kabila, signed the monopoly deal with International Diamond Industries (IDI) in July last year, he hoped he would provide his cash-strapped country with an assured and regular income.

The Israeli firm, headed by 29-year-old Dan Goetler, promised to maximise profits from the trade and provide expertise to stamp out smuggling.

Smuggled trade

But the monopoly has been a disaster for the local diamonds trade, according to the recent UN report into the exploitation of Congo's natural resources.

Dealer in Mbuji-Mayi
UN controls are seeking to stamp out conflict diamonds
When the monopoly was granted to IDI, the report said Kinshasa's diamond dealers simply crossed the river to Brazzaville - capital of the neighbouring Republic of Congo - to sell their gems.

In the first three months of the monopoly alone, this smuggled trade - of which the Kinshasa government did not receive a cent - is reported to have been worth $60m.

If this was not reason enough for the Kabila government to cancel the deal, then the report says that IDI failed to live up to its side of the bargain in other ways.

Of the $20m it was supposed to pay up front for the contract, it gave only $3m.

'Special ties'

Government sources also told the authors of the report that the IDI director had "special ties with some generals in the Israeli army".

Given this, the Congolese army was "to have access to Israeli military equipment and intelligence". But these two were apparently unforthcoming.

The decision by President Joseph Kabila - who succeeded his assassinated father in January - to liberalise the lucrative diamond trade has been welcomed in Kinshasa.

The decision comes a week after Joseph Kabila announced his new government of relatively unknown technocrats.

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See also:

05 Sep 00 | Africa
DR Congo's diamond deal
30 Jun 00 | Africa
DR Congo marks 40 years
12 Jun 00 | Business
Diamond row scuppers float
25 Jul 00 | Africa
Mugabe's costly Congo venture
30 Jun 00 | Africa
Congo's unhappy birthday
30 Jun 00 | Africa
Timeline: DR Congo conflict
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