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Tuesday, 5 September, 2000, 16:56 GMT 17:56 UK
DR Congo's diamond deal
Diamond dealers thrive in Mbuji-Mayi, close to rebel areas
A special BBC News Online report on a deal restricting diamond exports from the DR Congo

Sipping their sweet tea in restaurants in Kinshasa, the mostly Lebanese diamond dealers are rather bitter.

At the end of July, the Democratic Republic of Congo's Government passed a decree banning them from exporting diamonds.

A special anti-smuggling unit is being formed by the Israeli army

Presidential adviser Nkere Ntanda Nkingi
On the same day, the Congolese Government signed a contract with a newly created Israeli company, IDI Diamond, to create a joint venture which has an export monopoly on all Congolese diamonds.

Under the terms of the 18-month contract, the partnership has the right to buy all diamonds produced in territory under the control of the Congolese Government.

Nkere Ntanda Nkingi, special investments advisor to President Laurent Kabila, told the BBC that this included the state diamond producer, Bakwanga Mines, plus all diamonds sold by private businesses.

The profits will be shared 70:30 between the Congolese Government and IDI.

One Lebanese dealer, Jamal Adel Fayed, complained that he paid $100,000 to Congo's Government for an annual licence and a $25,000 deposit.

"My license is valid until the 31 December, but the Congolese State does not respect the contract," he said.

Training denials

Mr Nkere says the deal also has a military component.

Dealer in Mbuji-Mayi
New UN controls are seeking to stamp out conflict diamonds
"A special anti-smuggling unit is being formed by the Israeli army," he said.

IDI "is the only company which could offer us such a deal [involving training of anti-smuggling agents] and that is one of the reasons why we chose them," Mr Nkere said.

The Congolese Office for Public and Private Investments has denied that training is part of the deal, and the Israeli Defence Ministry has denied any knowledge of the agreement.

According to AP news agency, IDI said it had only agreed to recommend names of security experts who could help Congo cut down on smuggling.

"IDI was more than happy to recommend people but we're not directly involved in any (training) operation," a spokesman told AP.

IDI Diamond has links with the well-known Tel Aviv based company, Schnitzer Diamond.

Kabila's interests

The deal appears to tie in with a number of DR Congo's interests, Mr Nkere explained.

Ugandan and Rwandan forces were accused of smuggling diamonds from Kisangani
It allows Congo to regulate and certify the origins of its diamonds under new UN requirements intended to weed out blood diamonds, he said.

Mr Nkere added that Rwanda and Uganda will not be able to provide such certification.

"The diamonds they smuggle from the DR Congo will subsequently be difficult to sell," he said.

Moreover, dramatic increases in diamond profits for the Congolese state are likely, provided that the anti-smuggling unit is efficient.

The monthly production of Bakwanga Mines alone can exceed $10m.

Because of widespread smuggling, it is unclear how many diamonds are exported by private dealers.

Mr Nkere declined to say whether Congo's diamond profits would be used to boost his own government's war efforts.

"All the money that is earned by a country is to be used for its needs. And its needs are presently numerous," he said.

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See also:

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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